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News In Review

December 22, 1997

Nationwide IP Telephony Service Readied

Qwest aims at small businesses to start; 25 cities targeted by midyear

By Mary E. Thyfault

Q west Communications International next month will become the first nationwide provider of Internet Protocol telephony and fax services over its own network, promising to bring the low-priced voice services to large businesses later next year. The service, initially aimed at small businesses and consumers, will be priced at 7.5 cents a minute and reach nine cities by the end of January and 25 cities by mid-1998.

Sending delay-sensitive voice over IP networks can be tricky, especially if it must compete with a lot of other traffic. Qwest is engineering around that problem with its own high-capacity fiber-optic IP network, due in 125 cities by the second quarter.

The startup carrier says it will roll out native IP voice, fax, and virtual private networking data services. Custo mers pay less for voice over IP than for conventional circuit-switched service because the calls bypass the expensive local access regime. With the phone-to-phone service, customers place a local call to a Qwest IP network node, enter a passcode, and then dial a phone number.

Running voice over IP also lets companies develop applications that integrate voice and data. "Our approach is not just to be a service provider but to play the role of integrator and help businesses fully leverage their investments in IP networks," says Lew Wilks, president of business markets for Qwest, in Denver. Qwest, which initially focused on selling to carriers, predicts that more than half of its revenue will come from consumers and businesses by 1999.

Other companies focusing on IP voice, such as Inter-Tel Inc. in Phoenix and International Discount Telecommunications in Hackensack, N.J., are leasing networks from the big long-distance carriers to offer their services. The big carriers themselves -- AT&T, MCI, Sprint - - are also testing IP-based voice services.

But not everyone thinks sending voice over IP networks makes sense. Art Schoeller, an analyst with Gartner Group Inc., says the industry should focus on sending voice over ATM networks, which have quality-of-service capabilities built in.


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