German telecommunications giant Deutsche Telekom AG unveiled plans Tuesday for a broad launch of Internet-based telephony services and high-speed asynchronous digital subscriber lines for residential and business customers.
Telekom is one of the first major telecommunications companies to get behind Internet protocol telephony in a big way. The company took its first step in that direction last year by taking a stake in market leader VocalTec, an Israeli technology company. Since then it has conducted several pilot projects to test products.
Now company officials said the time has come to take Internet telephony out of the laboratory and into the market.
"We are going into the mass market in the autumn," Detlev Buchal, Telekom board member for sales and distribution, told a news conference ahead of the CeBIT technology fair in Hannover.
He didn't offer any details about pricing. But software like VocalTec's "Internet Phone" generally gives long distance callers much cheaper rates than direct dailing because they only have to connect to their local telephone company or Internet service provider.
The service is often called Internet telephony because calls are sent over private networks and the Internet from local gateways using standard Internet protocols. That structure puts the price of an international call more in line with the cost of a local phone call.
"I don't know of any telecommunications company that is moving as aggressively here as we are," said Telekom chairman Ron Sommer. "We are methodically creating the ... conditions to expand Internet telephony into innovative applications," he added.
Sommer said the company did not expect Internet telephony to pose a danger to its core business, but that it would complement its business by adding a low-cost alternative. "It is like an airline that offers business class, first class and economy class," he said. "We also want to expand into economy class."
For determined Net surfers and big businesses hungry for network speed, Telekom also announced plans to accelerate development of ADSL technology, which allows high-speed digital transmission of data over normal copper wires at a much faster rate than existing integrated services digital network lines, making possible services like video-on-demand.
Telekom is the world leader in deployment of ISDN, which can transport up to 64,000 bytes per second in one channel and can combine channels to increase bandwidth. The basic monthly charge for an ISDN line is below the price of two conventional telephone lines, but calling charges are the same.
In Germany, over 7.6 million ISDN channels are installed and widely used in business and at home.
"ADSL is the next step we plan to take," said Buchal. "In the long-term we see this as a mass market application because even residential customers are demaning broadband capacity."
Asked how Telekom planned to price ADSL services, Buchal said the current high price level for ADSL services would likely fall in accordance with rising demand, just as had been the case with ISDN. He urged the telecommunications regulator, however, not to enforce a price that was too low too early in the development of ADSL.
Coupled with the announcement of Telekom's new Internet telephony and ADSL services, came another announcement Tuesday of a strategic partnership with STAR Telecommunications, a multinational long-distance provider of switching facilities in the United States and Europe. The two said they will interconnect their telecommunications networks.