Alliance to build global e-business around voice - @IPbell services - Company Business and Marketing

CommunicationsWeek International, Nov 15, 1999 by David Molony

A new IP networking operator aims to be the world's first to develop "voice-enabled e-commerce" services for business users.

The company, @IPbell, is being launched this week by a consortium of vendors including Cisco Systems Inc., Hewlett-Packard Co., Oracle Corp. and Simplified Telesis, and led by Alan Bashforth, chief executive of Science Dynamics Corp., a voice applications technology supplier based in Cherry Hill, New Jersey (CWI, 4 October, p.1).

Bashforth said @IPbell is installing an IP network with nodes in 50 countries next year, growing to 300 countries after that. The network will have three international voice hubs, in London, Los Angeles and New York, with multinational customers first offered voice VPN services.

Some analysts say the project will require a great deal more funding and is anyway an investment risk because of the lack of detail about the applications that will be available. But others think the business model could help kick-start e-commerce supply chains between global companies, which are currently hampered by lack of e-commerce interoperability outside industry extranets.

"They are potentially getting a jump on the market," said Peter Crowcombe, Newbury, England-based director for corporates and service providers in Europe, at data networking consultancy Infonetics Research Inc., of San Jose, California. "If they use voice revenues to cover base costs of the network, then use the proceeds to develop more profitable e-commerce applications... businesses should naturally gravitate to this network."

As things stand, said Crowcombe, there would not be enough e-commerce traffic to support rolling out a dedicated global network for e-commerce. Instead, @IPbell is building a network suitable for e-commerce, in the short term generating revenues on cheap voice calls.

Robert Pratten, managing consultant at Schema Ltd., of London, argued that while the end-goal is converged or unified telecoms, most operators have concentrated on data networking first and now are adding voice applications on top. Instead, according to Schema, global e-commerce will be based around strategic IP telephony application services such as networked call centers, unified messaging and teleconferencing.

Phase one of the @IPbell network, in the United States and the United Kingdom, will be managed by GTE Internetworking Services, Burlington, Massachusetts, which last month launched wholesale voice-over-IP services. Bashforth said service would go live in January 2000 in about 10 countries, and he claimed @IPbell has customers lined up for commercial voice services.

Cisco, Hewlett-Packard and Oracle will provide financing as well as equipment, and staff for a laboratory to be built in Cherry Hill, where Science Dynamics will develop IP applications to run on top of the voice platform.

"It's [going to be] a fully voice-enabled IP network," said Bashforth. "Services will be pure e-commerce, pure IP."

Corporate customers will connect directly from their PABX or local area network to the in-country @IPbell node for voice services. Calling card applications will be supported from the start.

But while some analysts argue voice service will tide the company over, others say narrow margins on voice resale will hurt the fledgling business if it does not get the value added applications out fast.

"[They] must have some hosted applications to offer," said Chris Lewis, principal analyst at Yankee Group Europe, Watford, England. "The key question is how integrated the voice service will be as part of the e-commerce cycle."

The project is capitalized at about $50 million in phase one. It is not decided whether Cisco and partners will take equity, according to Bashforth, who said he is looking for other investors.

And some in the financial community are wary of the investment risk. "The way they have structured it is too bleeding edge," said one London-based venture fund manager. "This is too much [about] technology, when most of the technology is already here or could easily be leveraged."