Foreign soil as fertile field, IP telephony finds a niche in the international market

Internet telephony may be slow to take off within the United States, but overseas it's a completely different story, a phenomenon demonstrated over the last few weeks by the creation of two international Internet protocol telephony consortia.

In countries where the deregulation of the telephone system has not yet taken hold, the incumbent carrier gets away with charging an exorbitant amount for bandwidth, creating a prime market for IP telephony competitors to undercut them, said Kerry Hawkins, vice president of sales and marketing for Vienna Systems.

"International markets are a total arbitrage opportunity - both between countries and within countries - because the long-distance rates are so high," Hawkins said.

Vienna Systems has joined IP telephony carrier Global Exchange Carrier and 11 Internet service providers from around the world in a consortium called the G-Cubed Network. Using Vienna's IP/public network gateway server, the network initially will be deployed in 10 countries.

A customer will call into the Vienna.way server using a local or toll-free number, then enter an access number, said Henri-James Tieleman, vice president of European operations at GXC. The server would digitize and packetize the call for IP transport, then automatically route the call over the Internet to the gateway closest to the call's destination point; that gateway will then place a local call to that destination.

If there is no nearby gateway at the destination point, the server will automatically route the call through the public network as cheaply as possible, Tieleman said.

The consortium expects its members to target both the residential and large corporate markets, in which a gateway server would be hooked up to the company's PBX to automatically route all calls over the Internet, Hawkins said.

In addition, Tieleman anticipates the consortium's membership to expand to other carriers, particularly wireless companies that want to save money over the Internet to complete calls outside their area.

Concentric Network Corp. is also banking on international calling becoming a cash cow for IP telephony. The Cupertino, Calif.-based ISP has been named the preferred U.S. provider for an international IP telephony consortium that will be operated by OzEmail Interline Pty Ltd., which provides Internet services in Australia and New Zealand.

Concentric will deploy OzEmail's gateway product on its private, asynchronous transfer mode-based Internet backbone network. Calls will then be routed from the Concentric backbone to the Internet, where they will be sent to the OzEmail gateway closest to the call's destination. Concentric plans to market the service to its existing customer base via prepaid calling cards.

The company will also sell the service to business customers, installing gateways on their premises as the G-cubed consortium plans to do, and on a wholesale basis to long-distance carriers and resellers.

The Concentric consortium plans to begin offering service by the end of the year, and the G-Cubed initiative has already begun delivering service in some regions, including Israel and Japan.

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