Netscape is to bundle the first Internet telephony software that promises call quality close to that of the telephone network. The company will incorporate software from Elemedia, a start-up subsidiary of Lucent Technologies, in future versions of its browsers and Internet servers, but this is unlikely to be widely available until at least mid-1997.
This is the first major supplier deal for Elemedia, which recently demonstrated the software to analysts at its laboratories and will add videoconferencing capabilities by the end of the year. Analysts agreed the company had achieved call quality close to that of conventional telephones. Users make calls, for the cost of an Internet connection, using speakerphones. The software also supports CD-quality audio across the Internet.
Internet telephony has the potential to make a huge cut into traditional telecomms carriers' business - partly why Elemedia has flourished now that its parent Lucent is independent of super-carrier AT&T. Market research from IDC and others indicates that Internet telephony could take five per cent of long distance traffic in the US and Europe by 2000.
Competition will be fierce - in the UK last week, Digiphone launched an Internet phone technology from US-based Camelot - but a tie-up with Netscape, which controls 80 per cent of the browser market, could put Elemedia in a headstart position. To date, most of its competitors' products require speakers to pause between each response, leading to a start-and-stop conversation, but Elemedia has got round this problem with new developments carried out at Bell Laboratories.
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