VoIP-enabled CPE market fills with new product entries

The already-crowded and fractured market for voice-over-IP customer premises equipment got a lot more so on both counts last week with two separate announcements pointing toward new evolutions in analog telephone adapters, or ATA.

First, Telco Systems announced its entry into the market with a product that looks like a traditional ATA but includes for some telco-like features. A few days later, Vonage announced an alliance with Viseon to launch a videophone that comes with a built-in ATA.

The Telco Systems' launch of its Access211 broadband Internet Gateway came with the news that Vienna, Va.-based start-up SunRocket is among the first customers for the product and will buy 5000 units this year and an additional 150,000 boxes in 2005. The unit, which will be branded “the Gizmo” by SunRocket, operates similar to most ATAs on the market, allowing users to make and receive calls and faxes over a broadband connection using standard devices. However, the product also includes features like a public network fail-over, an integrated router and a traffic-shaping mechanism, all with the goal of being used by carriers providing primary line service.

“If, for example, power is lost to the box or if you lose visibility to the softswitch or gateway, you automatically fail over to the POTS line,” said David Lee, vice president of marketing for Telco Systems. “We're looking at various additions for the road map and working closely with our customers.”

Telco Systems' entry comes at a time when the market for broadband CPE is becoming more complex with multiple configurations and devices, including residential gateways with VoIP capabilities, integrated router/ATA units and VoIP phones with the adapters built in. According to a recent study by In-Stat/MDR, the overall CPE device market, which includes broadband modems, residential gateways and home office routers, will peak next year at 65 million units before falling to around 42.3 million for 2008. The overall trend, in fact, is toward multi-service devices, fewer boxes and units that can be managed by carriers as network elements.

It's the first two movements that partially pushed Vonage to team with Viseon to offer a videophone that will use the Vonage service. The device, which won't hit the market until 2005, raises the number of devices that have the carrier's blessing to five, according to Brooke Shultz, vice president of communications for Vonage. The company also allows users to pick among Linksys (integrate wire line and wireless routers with ATAs), Cisco Systems and Motorola devices.

“This is just adding to the number of devices that customers can choose from,” she said. “We're still in the prototype phase, but it looks like we're going to do a stand-alone unit so you won't have to buy an additional adapter.”

Vonage also plans to use both its retail channels and its Web site as distribution points. So far, most other carriers have preferred to keep control of the sales channel for VoIP CPE, but that may change soon, Lee said.

“Five years from now, you'll probably be buying these things in Best Buy,” he said. “But right now, there are a lot of [low-cost vendors] out there, and most of them haven't been chosen by carriers.”

Likewise, carriers are looking at the new CPE as an extension of their network. To that end, several vendors have plans to include support for the TR-069 protocol in their customer devices.

Trying to get a jump on the trend, last week Motive expanded its certification and interoperability program aimed at CPE that supports the protocol.

“It's our belief that telcos are moving in the direction of managing intelligent CPE,” said. Kenny Van Zant, executive vice president of marketing for Motive.

SAMPLING OF VENDORS IN ATA DEVICE MARKET AND CUSTOMER WINS

Cisco Systems: Vonage, deltathree

Telco Systems: SunRocket

Motorola: Vonage

Linksys: AT&T, Vonage

D-Link: AT&T, Primus

Netgear: AT&T

Grandstream: StarNet, deltathree

Source: company info