iBasis announced that they are expanding their architecture, adding to their facility in London to meet growing demand for VoIP services among consumers, small-and-medium sized enterprises, and corporates in Europe. This expansion of iBasis' DirectVoIP Broadband capacity offers VoIP service providers fast and secure IP interconnections to the iBasis global VoIP network through the London facility to enable high quality international voice services for consumer and corporate customers.

iBasis enhanced its global VoIP architecture to fulfill accelerated demand from emerging VoBB providers, such as Skype.

"The expansion of our DirectVoIP Broadband architecture into our London facility enables us to offer a very convenient and complete solution that allows providers of retail VoIP services to connect their subscribers to virtually any phone in the world, whether it's a fixed or mobile phone," said Ofer Gneezy, president and CEO of iBasis.

"This expansion gives us plenty of capacity to keep up with the rapidly growing demand for retail VoIP services, such as the SkypeOut service, and deliver the same high quality of service to other emerging VoIP providers and their subscribers throughout Europe."

"As a pioneer in VoIP services, iBasis is a strong partner for Skype as we expand our premium services that increase interconnectivity to ordinary fixed and mobile phones for our millions of customers worldwide," said Niklas Zennstrom, Skype's CEO and co-founder. "The extensive global footprint, regionalized architecture, and high call quality of the iBasis network has supported SkypeOut's dynamic growth by handling a large and rapidly increasing volume of Skype customers' Internet telephony calls to the traditional PSTN and mobile networks."

Bogged down with slow apps and sluggish throughput? Got half a billion to spend? No problem. Accelerate your problems away!

Juniper Networks, Inc., has announced definitive agreements to acquire Peribit Networks, Inc., and Redline Networks, Inc., for approximately $469 million. The Peribit Networks acquisition is valued at approximately $337 million in cash, stock and assumed stock options. The Redline Networks acquisition is valued at approximately $132 million in cash and assumed stock options.

Both companies are up and coming players in the field of application acceleration.

“Juniper's traffic processing strategy took a giant leap forward today,” said Juniper CEO Scott Kriens, in a conference call Tuesday afternoon. According to Kriens, the need for application acceleration technologies has grown significantly over the past few years, as large corporate applications are distributed widely across uncertain networking links.

Peribit Networks products improve enterprise business efficiencies by resolving the technical limitations of WANs. The company’s PeriSphere architecture is a WAN optimization architecture that enables application rollout and webification, facilitates data center consolidation, and improves disaster recovery/backup and regulatory compliance. Peribit platforms and software are designed to provide customers with increased WAN capacity, faster application performance, prioritized application delivery, and total WAN visibility. Peribit brings over 900 customers to the deal.

Redline Networks designs network solutions that maximize the performance, flexibility and scalability of web-enabled enterprise data centers and public web sites. The company's family of Application Front Ends, deployed within the boundaries of corporate data centers, enables users to control and customize any Web-based environment while reducing infrastructure cost and complexity. Redline Networks has over 350 enterprise customers.

The acquisitions in our space continue.

Who’s next?

Sangoma's Support Opens the Windows Market for the Yate PBX and IVR Project

TORONTO - April 26, 2005 - Sangoma Technologies Corporation, a leading provider of connectivity hardware and software products supporting voice transport, WANs and Internet infrastructure, and the Null Team Company, primary developer of Yate, announced today an agreement to develop a Windows-based version of the GPL-licensed Yate telephony project.

Yate is a next-generation telephony engine. While the project currently supports VoIP/ telephony gateways and Interactive Voice Response (IVR), its power lies in its scalability. Voice, video, data and instant messaging can all run independently under Yate's flexible routing engine while interacting through a unified messaging system.

"Most commercial IVR applications such as call centers are Windows-based. This open source initiative will free developers from reliance on hard-to- use, proprietary solutions based on expensive hardware," says Sangoma Technologies President and CEO David Mandelstam. "Recognizing the inherent strengths of the Yate model we have offered our technical and financial assistance to offer this project to the large market that is dominated by Windows. We expect to take a leadership role as we support the project for the developer community."

"Yate for Windows provides the first open solution for Windows-based clients requiring integrated, customized telephony systems," says Diana Cionoiu the leader of the YATE project. "Because of the modular nature, stability and scalability of Yate, it is a natural integration platform for the developers of high quality open source telephony-related software."

And the once acquired shall begin to acquire on their own, and thus all shall be assimilated...

In March of 2003, Computer Reseller called Cisco's $500 million (stock) acquisition of Linksys "...the most ambitious in its history..." With that move, Cisco took serious aim at the small office/home office (SOHO) market -- a move that seems to be paying off in droves.

Two years on, in March of 2005, Cisco announced that Linksys had shipped over a million VoIP ports in the preceding six months. As they say in this business, that's not too shabby.

Today, Linksys, acquired by Cisco, announced an acquisition of their own: Sipura. According to Cisco PR, Sipura will provide Linksys with valuable technology, IP, customers, and an experienced team with extensive VoIP expertise, as well as provide the foundation for building Linksys internal R&D capabilities in voice, video and other markets.

It seems that Cisco is on a binge again. Airespace, Topspin, and now Sipura.  The release announcing the deal is below:

Cisco Systems to Acquire Sipura Technology

First Acquisition for Linksys Division; Adds Experienced Team and VoIP Technology

SAN JOSE, Calif., April 26, 2005 Cisco Systems® today announced a definitive agreement to acquire privately-held Sipura Technology, Inc. This represents Cisco's first acquisition for its Linksys division, the leading provider of wireless and networking hardware for home, Small Office/Home Office (SOHO) and small business environments. Sipura is a leader in consumer voice over internet protocol (VoIP) technology and is a key technology provider for Linksys' current line of VoIP networking devices. In addition to Sipura's valuable technology and customer relationships, their experienced team with extensive VoIP expertise will help build a foundation for Linksys' internal research and development capabilities in voice, video and other markets.

Under the terms of the agreement, Cisco will pay approximately $68 million in cash and options for Sipura. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the fourth quarter of Cisco's fiscal year 2005 ending July 30, 2005.

Consumer VoIP is rapidly expanding as independent providers and incumbent telecom and cable operators bring VoIP offerings to consumers. Synergy Research Group, a leading market research firm, reports that today there are close to 8 million home users worldwide using VoIP to make phone calls over their broadband connections. By 2009, Synergy anticipates this number to grow to 58.9 million home users using VoIP to talk to friends and family around the world using broadband and VoIP technology.

"VoIP is a strategic segment for innovation and growth for Cisco and Linksys. The acquisition of Sipura will augment Linksys' leading position in the rapidly growing VoIP market and is an example of Linksys' strategy to increase internal R&D capabilities in specific product categories," said Charles Giancarlo, Cisco CTO and Cisco-Linksys president. "Adding Sipura's technology reinforces our commitment to developing products in the consumer voice space."

This acquisition follows Cisco's core strategy of using acquisitions to build new technologies and speed time-to-market for its products. The Sipura acquisition accelerates Linksys' leadership in the emerging high growth VoIP consumer and SOHO markets, provides continued competitive differentiation for its VoIP product offerings, and allows Linksys to better serve it customers.

Sipura has developed the technology incorporated in leading VoIP adapters (including those integrated into home routers and gateways) and a multi-line IP phone for the consumer and SOHO market. Sipura's technology is currently used by Linksys in some VoIP products, including certain analog telephone adapters and wired and wireless routers with phone ports. Sipura currently has relationships with regional and top-tier VoIP providers. Linksys will continue to work with those service providers, as well as use its traditional retail channels to target consumers and SOHO environments with Sipura's line of VoIP products.

Upon close of the transaction, Sipura will be integrated into Cisco's Linksys division, led by Senior Vice Presidents Janie and Victor Tsao. Sipura was founded in March 2003 and is headquartered in San Jose, Calif.

About Linksys
Founded in 1988, Linksys, a Division of Cisco Systems, Inc., is the global leader in Wireless and Ethernet networking for consumer, SOHO and small business users. Linksys is dedicated to making networking easy and affordable for its customers, offering innovative, award-winning products that seamlessly integrate with a variety of devices and applications. Linksys provides award-winning product support to its customers. For more information, visit www.linksys.com.

About Cisco Systems
Cisco Systems, Inc. (NASDAQ: CSCO), the worldwide leader in networking for the Internet, celebrates 20 years of commitment to technology innovation, industry leadership, and corporate social responsibility. Information about Cisco can be found at http://www.cisco.com. For ongoing news, go to http://newsroom.cisco.com.

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Polycom’s recent announcement was a long time coming, at least it seemed that way to me since I got a pre-brief over a month ago. I actually wanted to write it up then, but the Corporate PR folks said “Nyet.”

At the time, Polycom referred to its solution as a new category: Voice + Content. Two years in development, the new small format system is designed to enable people to share desktop and remote locations. The release follows below. Polycom maintains  its industry leadership with this release.

POLYCOM MAKES INSTANT CONTENT SHARING AVAILABLE TO 1.7 MILLION CONFERENCE PHONES WITH BREAKTHROUGH APPLIANCE

Polycom QSX device enables simple, secure, ad-hoc content sharing by simply dialing a Polycom SoundStation conference phone.

PLEASANTON, Calif. – April 25, 2005 – Polycom, Inc. (NASDAQ: PLCM), the world’s leading provider of unified collaborative communications solutions, today announced the availability of Polycom QSX, a breakthrough new Voice+Content solution that enables anyone using a Polycom conference phone to easily and securely share computer content with remote meeting participants. Polycom QSX is an upgrade solution that enables customers to leverage more than 1.7 million wired SoundStation conference phones already installed worldwide.  It enables fast, ad-hoc content sharing for anyone in the conference call without requiring special software applications, on-going usage fees, or document uploading.

Polycom QSX improves productivity by addressing the content sharing needs of everyday meetings with up to 15 participant locations. Participants see content in one of two ways: QSX-enabled rooms see the content automatically though the room’s projector or display; locations without QSX can see the content through a standard, Java-enabled web browser. Polycom QSX is a new way of meeting and sharing content and is a natural extension of how people meet today in conference rooms – dialing the conference phone and presenting through a projector or VGA display.

 “QSX is a small appliance that serves as a ‘hub’ for the conference room, connecting the conference phone, projector and Internet connection to enable high quality, secure and fast content sharing capabilities without adding more clutter to the table,” said Sunil Bhalla, senior vice president and general manager of voice communications at Polycom. “This solution allows workers the freedom to walk into a meeting and immediately share their computer screen with remote locations without wasting valuable time on meeting set up. QSX addresses a market need in the conference room that is not served by today’s web collaboration applications – the everyday meeting.”

QSX is designed to be a versatile plug-and-play tool that anyone can use. Since the presenter connects simply with a VGA cable, anyone who walks into the room can present content instantly to everyone on the call, even if they are a visitor using a Macintosh without any individual access to the LAN. Using Polycom leading compression algorithms, QSX enables people to share virtually any type of computer content instantly and to show changes, or switch applications as the meeting progresses. The system also provides an integrated web viewer capability so participants in locations without QSX can see the presentation through a standard browser.

Unlike even the simplest web conferencing services, Polycom QSX is a premise-based small appliance that does not require an enterprise to sign a service agreement or deploy a software license program. QSX is manageable through an individual admin web admin page or through Polycom Global Management System.

“The power of the Polycom QSX solution is in its simplicity, speed and the fact that anyone in the room can use it without downloading an application, calling IT for set-up support, or signing up for a service,” said (attribution in approval). “QSX is unique in the market, taking the core functionality of group web conferencing and applying it to a widely deployed phone platform which now becomes a portal for initiating content sharing. Now all of a company’s employees can share content easily and instantaneously as part of an everyday conference call without any additional cost per call.”

How QSX Works

Polycom QSX is installed under the table, in a closet or on a wall in a conference room or office. It connects a SoundStation conference phone (regular, analog phone line), an IP connection, and a projector or VGA display. Users simply connect their computer to QSX through a provided VGA cable, dial the phone and press the “content share” button on the content controller device to begin sharing.

For QSX locations, the systems identify each other over the analog phone line and automatically setup an IP-based H.323 content sharing channel. QSX uses in-band, low-frequency signaling to send information over the phone line, which works in both point-to-point calls and through any audio conference bridge.  Any one of the QSX locations can then present content at any point of the meeting by connecting a computer to the VGA cable and pressing the content button on the table.  In viewing locations, the content is displayed automatically through the connected projector or display – no computer required.

For locations without a QSX device, participants are able to view content through a web browser without having to download any applications or sign on to a service. Web viewer participants join by going to a URL provided by the QSX and entering the meeting password.  All QSX sites on the call see the meeting web address (a QSX appliance IP address) and system-generated password on their local display.  As compared to existing applications, the QSX web viewer facilitates ad hoc use by enabling people to see any type of content from a presenting location, without requiring users to pre-schedule or download any new software before use.

A QSX meeting can support a total of 15 sites, more than enough to handle the average number of locations on most conference calls today. It supports a combination of up to five QSX systems and up to 10 web viewer participants.

“In our company, Web conferences are normally scheduled events that are reserved for more formal meetings such as training or meetings with upper management,” said (attribution in approval). “QSX offers a secure solution without service charges that we can use in our everyday meetings.   It provides more capabilities and is even easier to use than the simplest of screen sharing services.  Our initial QSX set-up took about 25 minutes and we were able to easily configure it for users to access data outside our firewall. With QSX, our employees can focus on the content of their meeting, not the logistics of setting up the meeting.”

Unique features of Polycom QSX include:

• Adding value to 1.7 million conference phones - QSX adds a whole new dimension of visual communication to 1.7 million wired analog SoundStation conference phones in the market today by offering an integrated, upgrade solution for simple and secure content sharing. Every time someone uses the conference phone, they (or anyone in the room) can show content instantly, even if none of the remote participants have a QSX. Voice+Content enhances overall productivity in conference rooms, offices or from the road increasing customers’ return on investment in Polycom systems.

• Simple to use – Any existing SoundStation customer can now seamlessly add live content sharing to their meetings by deploying QSX appliances. With QSX installed, users simply connect their computer and dial the phone to display content on the projectors in up to five QSX-enabled conference rooms, and/or with up to 10 other remote meeting participants viewing through a web browser. Participants don’t need to download any applications or sign up for anything. 

• Secure way to share content – QSX can be deployed behind a corporate firewall, documents can be encrypted on QSX to QSX calls, and the presenter maintains complete control of the content flow without any risk of unintended document distribution.

• Cost effective – QSX ease-of-use saves users time and minimizes training expenses and ongoing IT support. In addition, since there are no service fees, QSX provides low total cost of ownership.

• Flexible – QSX supports up to 15 participants (5 QSX sites and 10 web participants) and can be used in conjunction with voice conference bridges, outside lines, or PBX lines.  Using Polycom’s standards-based H.263 technology (QSX to QSX), QSX enables customers to share any type of computer content instantly – even files or applications that could not otherwise be e-mailed or shared effectively using other applications.  QSX can also be configured to allow web viewer access from outside the corporate firewall.

• Easy to set-up and manage – QSX is a plug-and-play appliance that requires a one-time set-up that can be done in less than 30 minutes. QSX can be remotely managed through a simple web admin page or through the Polycom Global Management System.

Pricing and Availability

Polycom QSX systems are now available worldwide through certified Polycom channel partners. Manufacturer’s suggested retail pricing starts at U.S. $1,299.

The Session Border Control market continues its metamorphosis. The recent acquisition of Kagoor by Juniper was just the first step in what I believe will be an ongoing process changing the landscape.

Data Connection announced a software solution for OEMs that would enable them to add Session Border Control functionality to routers and softswitches.

I knew this day would come. I’d been speaking to vendors about the possibility of this happening for some time now, and while reaction to this concept was mixed, the general trend was acceptance. And so, it’s finally here. The release is below.

Data Connection Announces Complete Session Border Controller Software Solution for OEMs

Portable source code solution provides an upgrade path to complete Session Border Controller functionality for routers and softswitches

London, UK:  April 25, 2005.  Data Connection Limited (DCL), the world's leading independent provider of communications protocol software, announced today the availability of its Session Border Controller (DC‑SBC) software solution for OEMs.

DC-SBC is available as a complete source code solution for vendors of softswitches, routers, gateways, firewalls, and IP PBXs as well as standalone session border controllers.  By incorporating DC-SBC into their existing products, OEMs will be able to offer service providers complete Session Border Controller (SBC) functionality as a software upgrade to platforms already installed in their networks.  System vendors benefit by providing platforms with increased service and security capabilities but at greatly reduced development costs and time-to-market.  Service providers benefit from a much greater choice of SBC solutions, which will be available on a wider range of hardware platforms.

“SBC features and services are absolutely essential in VoIP networking but are not addressed by the incumbent platforms that provide the foundation of these networks. This fact, combined with the explosion of VoIP services, has created huge demand for SBC functionality which is best served by legacy softswitches and routers,” said Phil McConnell, CEO of Data Connection.

SBCs are a set of functions that control session-based traffic at the signaling and packet layers, allowing increased security and enhanced features to be deployed in a VoIP network.  Analysts predict that activity in the SBC market will continue to heat up as the revenue opportunity continues to grow.  Kevin Mitchell, an analyst with Infonetics Research, estimates that the SBC market will reach $434 million in 2007 with a five-year CAGR of 96%.

The Service Providers’ need for SBC functionality is creating a rapidly growing market, which makes Session Border Controllers an attractive opportunity for existing VoIP and legacy Telco vendors.  Jon Arnold, Principal of J Arnold & Associates, agrees  “Session border controllers have recently emerged as a critical nextgen element as carriers increasingly find themselves handing off traffic from one IP network to another.”

Data Connection estimates that system vendors planning to develop and test a complete SBC solution internally, including all the necessary signaling protocols and media call control services, would require up to 100 man-years of development time, at a total cost of $25 million.  Gaining the technology by acquisition could cost vendors 3 to 5 times as much.  The DC-SBC solution allows vendors to jump into the SBC market with their existing hardware at a fraction of the time and cost.

“Time to market is a key success factor for any carrier offering IP services, and at this stage of market growth, it is too late for incumbent vendors to develop SBC in-house.  Data Connection’s announcement provides such vendors with an opportunity to offer SBC functionality significantly faster and less expensively on their existing product lines” added Arnold.

DC-SBC is designed, developed, and supported by the same Data Connection engineering professionals who offer industry-leading source code protocols for VoIP (DC‑SIP, DC-MGCP, and DC-Megaco/H.248) and IP routing (DC-BGP, DC-ISIS, DC-OSPF, DC-RIP, DC-PIM, and DC-MPLS), as well as Class 5 softswitch solutions (MetaSwitch’s award-winning Class 5 Softswitch).  Data Connection’s experience with these protocols and products provides users with the added comfort that the majority of software for DC‑SBC is well proven in live customer networks and products across the world.

Matthew Finlayson, VP of Development and Requirements for Data Connection’s Protocol Software, explains, “Our previous experience and existing product range gave us a tremendous head start with developing DC-SBC.  The session components largely consist of our widely deployed VoIP signaling protocols and the media control pieces are derived from MetaSwitch’s softswitch, which has over 100 deployments.”

The result is that system vendors can now obtain a field-proven SBC software toolkit without heavily investing in internal development and test cycles.  In fact, Data Connection calculates that over 80% of the DC-SBC software comprises code that has been shipping in existing DCL products for several years.  DC-SBC comes pre-integrated with all the leading operating systems and is backed by Data Connection’s unrivaled customer support.

DC-SBC will be available in August 2005 under a variety of flexible pricing options.  For more information please use dcsbc@dataconnection.com or call Pat Moore at +44 20 8366 1177.

It's a good day for bandwidth it seems...

This time the focus is on Service Providers as Teleglobe International annouces an agreement with NORDUnet whereby Teleglobe will double capacity to provide high-speed Internet connectivity between NORDUnet and the Icelandic research and education community. The upgrade provides NORDUnet with the capacity required to support the growth in IP traffic.

The release follows:

Teleglobe and NORDUnet Double Capacity to Accommodate IP Traffic Growth

HAMILTON, Bermuda--April 19, 2005--Teleglobe International Holdings Ltd (NASDAQ:TLGB), a leading provider of international telecommunications services to Internet service providers and fixed and mobile network operators, today announced that the company has extended its agreement with NORDUnet and doubled capacity to provide high-speed Internet connectivity between NORDUnet and the Icelandic research and education community. The upgrade provides NORDUnet with the capacity required to support the growth in IP traffic.

The extended agreement calls for the provision of 310 Mbps direct connection using the eastern part of the CANTAT-3 sea cable between Vestmannaeyjar in Iceland and Blaabjerg in Denmark. In addition, a 155 Mbps IP connection on the western part of CANTAT-3 provides resilience for general IP traffic. These high bandwidth links provide academics, students and researchers in Iceland a state of the art capability to exchange information and collaborate with their colleagues in the Nordic region as well as thousands of universities, government and private research centers worldwide.

NORDUnet is the Nordic backbone network for national research and education networks in Denmark, Finland, Iceland, Norway and Sweden, and provides advanced networking connectivity for its users. Teleglobe owns and operates one of the most extensive global telecommunications networks, and is a leading provider of IP Transit to carriers and ISPs around the world.

"We are pleased to be extending our relationship with Teleglobe once again," said General Manager Peter Villemoes of NORDUnet A/S. "For over 7 years, Teleglobe has been providing NORDUnet with advanced networking services that our academic and research communities require for collaboration and exchange of information."

"With over one million users in the Nordic countries, NORDUnet is one of the most advanced research and education networks in the world," said Christian Michaud, Vice President of Marketing at Teleglobe. "This agreement is further testament to the quality of our services and builds on our expertise as a reliable backbone for global research and education. We are proud to support NORDUnet to enable advanced communications between Nordic academic communities."

Teleglobe has long been an active participant in the deployment of international education and research networks. In 1994, Teleglobe provided the first intercontinental link for what was to become the next generation Internet. Since then Teleglobe has provided international capability to most of the world's advanced research and networks.

Teleglobe's global network supports a wide variety of advanced data and IP services including global IP transit, international private leased circuits (IPLs), bandwidth and broadcast services. Teleglobe has ownership in over 100 subsea and terrestrial cable systems and has 40 antennas serving the Atlantic, Pacific, and Indian Oceans. Teleglobe is a global Tier 1 Internet service provider (ISP) and operates the IP backbone AS 6453 which circles the globe. Our MPLS-enabled IP network connects more than 90 countries to the Internet and is also supporting IPv6, the new generation IP protocol.

About NORDUnet:

NORDUnet A/S operates and develops the Nordic internet backbone (NORDUnet) for research and education and has been the forerunner in adopting advanced networking standards for the benefit of its users. NORDUnet A/S is a Danish limited company owned by the Nordic ministries of education and research or institutions under their control. The company administration is located in Horsholm, Denmark, In addition to providing advanced internet connectivity NORDUnet is also involved in coordinating and supporting the networking research initiatives.

About Teleglobe:

Teleglobe International Holdings Ltd is a leading provider of international voice, data, Internet and mobile roaming services with over 50 years of industry expertise in international telecommunications. Teleglobe became a public company trading on the Nasdaq under the symbol TLGB with the acquisition of Voice over IP (VoIP) network leader ITXC Corp. on June 1, 2004.

Teleglobe owns and operates one of the world's most extensive telecommunications networks, reaching over 240 countries and territories with advanced voice, mobile, and data services. Teleglobe is the carrier of choice to more than 1,200 wholesale customers representing the world's leading telecommunications, mobile operators and Internet service providers.

With an annual run-rate of over 13 billion minutes, and a significant portion of the world's Internet traffic, Teleglobe's network is consistently ranked among the most robust and reliable, performing at the high end of industry standards. Detailed information about Teleglobe is available on the company's web site at www.teleglobe.com.

A recent report from ABI Research entitled “Fiber to the Premises” takes a look at the current state of Fiber to the “X” where X = curb, home, premises, what have you…

The report focuses in on technology issues involved with the FTTX platforms as well as the market conditions in terms of subscribers, cost, services, and the like.

In a world where the United States lags far behind a number of other developed nations in terms of broadband penetration, any deployment of high-speed fiber is welcome news. And the applications we write about at Internet Telephony can certainly thrive in a bandwidth-abundant environment. 

Here’s the release from ABI Research:

Qwest Goes Deeper with Deep Fiber

Oyster Bay, NY - April 19, 2005 - Qwest Communications announced last week that it had started the deployment of a fiber-based residential network in a community outside Denver, Colorado. Coupled with two prior deep-fiber-community deployments, this initiative appears to put Qwest on track to join Verizon and SBC (and to a lesser degree, BellSouth) in the FTTX club. These initial deep-fiber deployments may be an effort by Qwest to catch up to its competitors in building out a network to support high-bandwidth services, including video.

Verizon and SBC have continued aggressive deployment of their fiber build-outs, and BellSouth has sustained its slower-paced rollout of fiber to selected neighborhoods. According to Michael Arden, ABI Research's principal analyst of broadband and residential entertainment technologies, whether Qwest will continue to roll out fiber to the end user or will take a "wait-and-see" approach remains to be seen. "Nevertheless," he says, "Qwest's announcement reinforces the argument that fiber to the end-user is likely to be the best long-term solution for providing high-bandwidth services."

A recent ABI Research study, "Fiber to the Premises", focuses on the FTTX market, first looking at the technology issues involved with FTTX platforms and then assessing the market in terms of subscribers, network builds, equipment market, per-subscriber costs, and the services that drive adoption.

Arden continues, "Qwest's FTTX rollout illustrates its awareness that it must start developing some sort of solution to compete with Verizon and SBC. My guess is that they'll see what happens with this initiative and will then decide in another year or so if they want a more aggressive rollout. At this point, they're so late to the game that they may as well wait."

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. For more information please visit www.abiresearch.com, or call 516.624.2500.

In a new report, Insight Research claims that the global market for operations support systems (OSS) — the computing and software IT infrastructure that performs engineering, provisioning, and management functions in telecommunications networks — will exceed $30 billion this year.

According to Operations Support Systems 2005-2010, telecommunications network operators worldwide are expected to increase their investment in OSS at a compounded rate of nearly four percent over the next five years, while North American investment in the computing and software systems used to acquire, serve, and bill customers will not top 2.7 percent over the same period. Telecommunications service providers will be investing selectively in areas showing the greatest potential for a fast rate of return, including wireless 3G data services and high-speed residential broadband access.

However, capital spending on new systems will grow at a slower rate than IT investment in the general economy. The market research study concludes that this year European cable TV operators, wireless providers and telephone companies will spend more than their North American counterparts on the new computing systems needed to supply telecommunications services, and that by 2010 OSS investment in both Europe and Asia will exceed North American spending.

For more information, or to order the report, visit Insight Research online.

Economic commentator Nina Kulikova of The Russian Information Agency (Novosti) reported today on the legalization of IP Telephony in Russia.

According to the news item, the Information Technologies Ministry is currently formulating a legal basis for IP telephony. According to the new regulations, operators may receive a license for voice transmission and develop appropriate networks, including intercity ones, and to provide services on the same terms as traditional operators.

The IP operators have responded by saying they fear the licenses will be too expensive. But the authorities believe that, although small companies will really find it hard to comply with all the requirements, the new regulations for IP telephony will allow operators to capitalize their business and improve their positions.

I’m including the complete release below.

2005-04-08 16:52 

IP TELEPHONY MARKET LEGALIZED IN RUSSIA

The Russian government has approved Regulations on Connecting Electric Communication Networks and Their Interaction. This document is one of many designed to reform the legal basis for the communications market in Russia, which, so far, remains monopolized. Most importantly, though, it gives a legal status to phone communications over the Internet, or IP telephony.

IP (or to give it its full name Voice over Internet Protocol) allows people to use the net to transmit voice messages in real time. It began spreading fast in Russia a few years ago and by 2004 the IP market had increased by 45% and had earned more than $160 million.

Many people in Russia have already realized the advantages of this form of communication, as it is cheap and user-friendly. All you have to do is buy a card and with a tone-dialing phone you can speak with anyone in America, for example, and pay 80-86% less than you would by using a traditional operator. One minute on the phone with the U.S. or Europe costs a Moscow-based IP subscriber 9 or 12 cents as opposed to the 50-70 cents usually charged.

Although rates for intercity and international calls using traditional phones are falling in the world, they keep growing in Russia. According to the Ministry of Information Technologies, rates increased by 28% in 2004. Given that most Russians are not high earners, this has left the new service in demand.

People often named the low quality of communication as a drawback of IP, but that was at its dawn in Russia. Now IP quality is approaching its traditional rivals. In fact, corporate clients are increasingly using IP services, because they can combine telephony and computer technologies, which is not something you can do on your old dial up.

The Regulations affect various spheres of the telecommunications sector, and not only IP operators. This document attracted attention on the market primarily because some companies working with IP feared that after the regulations were accepted some operators would have to leave the market. However, the authorities gave assurances that the Regulations would create normal conditions for competition on the market, where traditional communication services and IP telephony may coexist.

No clear rules existed for IP operators until recently. After realizing that a new service had appeared on the market, the authorities classed it as a telematic service (like text messages). The licenses used by IP operators were not directly associated with voice transmission and, in fact, they existed outside legal bounds.

Deputy Information Technologies Minister Dmitry Milovantsev says state-run communications company Rostelecom saw that packets associated with voice transmission passed through it and, hypothetically, it could jam such transmissions. But because of a lack of relevant legislation, a decision was made to refrain from prohibitive technical actions.

The Information Technologies Ministry is currently formulating a legal basis for IP telephony. According to the new regulations, operators may receive a license for voice transmission and develop appropriate networks, including intercity ones, and to provide services on the same terms as traditional operators.

The IP operators have responded by saying they fear the licenses will be too expensive. But the authorities believe that, although small companies will really find it hard to comply with all the requirements, the new regulations for IP telephony will allow operators to capitalize their business and improve their positions. Milovantsev says the expenditures on licensing for business operators are not what matters most here. At a certain stage they will have to make these outlays, but when these companies become more attractive for investment, including foreign money, the situation will change in favor of the operators. The entire world is changing to IP technologies as a basis for telecommunication networks.

At the same time, in keeping with the Connection Rules, the ministry intends to issue licenses for remote voice transmission irrespective of the technology used. However, operators see a problem. Other requirements mean they first have to provide services throughout Russia. But today only a few big traditional operators can do this. The rest will have to sign agency contracts with Rostelecom. This company only emerged on the IP market in 2004 and is way behind independent operators. The authorities have evidently decided to bolster its positions before the upcoming liberalization of the communications market.

Market operators say the specifics of business and technologies that they use should be taken into account in the terms of licensing. But the official position of the ministry is that it has no intention of regulating technologies and is issuing licenses for services.

On the whole, the IP market is developing following global trends in the communications sector. IP traffic already exceeds traffic along traditional lines in many industrialized countries. A complete transition of telecommunication structures to IP telephony is hardly possible in Russia soon, as the infrastructure for traditional networks is just too large, but legislative support for new technologies will help liberalize the communications market. Though the new regulations may complicate the work of small IP operators, in principle the new legislation should help to improve the quality of communication services in Russia.

I came across a news item on Mosnews.com, a Moscow-based online daily newspaper offering news from Russia in English. The article dealt with the threat of regulation being faced by Russia’s fast-growing VoIP industry. I’ve excerpted the opening of the article as well as the letter written to Russian President Putin.

If nothing else, this article underscores the fact that in global terms, VoIP can still be subject to the kind of stifling regulation that threatens to drive the technology “underground.” And “underground” is not a word any of us should want to hear around any discussions regarding Russia these days.

Here’s the excerpt:
Internet telephony (VoIP, or voice over IP) has been a hot topic in Russia since the end of the last century. Thousands of new and relatively small companies are competing on this market, filling the gap left by obsolete telecom monopolies, whose standing, thinking and much of their infrastructure, is largely inherited from the Soviet era. It’s hardly surprising that Russians, businesses and individuals alike, spend billions of rubles annually on VoIP services, instead of using overpriced and obsolete national and international connections, offered by old-fashioned telecom mammoths.

So far those mammoths have been quietly ignoring the trend, but lately their attention had been drawn to the phenomenon, and their first reaction was to outlaw the local VoIP market outright, pulling the usual strings of state bureaucracy. The industry made a faint attempt at striking back, sending an open letter to President Putin.

 Respected Vladimir Vladimirovich,

The participants of the Russian Internet Forum and representatives of Russia’s small and medium businesses are applying to you to express their deepest concern with the future of the communications market. One of the main telecommunication market trends is the convergence of voice, video and data within a single multi-service IP-based network. Nowadays about 30% of international voice traffic is transmitted by means of IP networks worldwide.

The main problem that the VoIP industry of Russia has to face is regulation. The state regulators of Western Europe and the USA see stimulating new technologies as a priority and support the development of VoIP as the main revolutionary technology on the market. At the same time, the instructions designed by the Ministry of Information of Russia and approved by a governmental resolution on 28.03.2005, actually prohibit the provision of VoIP services, forcing operators to turn the traffic towards national and international telecom companies.

The business of more than 2,000 Russian VoIP operators with a total turnover of about $300 million PA has been proclaimed illegal and forced to shift to unauthorized — that is, tax-free — schemes of work. Legislation to turn market traffic towards national and international telecom companies is a serious violation of the principle of free competition and is, in fact, a monopolization of the telecom market in favor of one or two major companies. The instructions were designed by the Ministry neglecting the opinions of the market participants and without an independent analysis.