The UK is being shunned by an Internet telephony operator starting services in Europe, because the country's telephone charges are already too competitive.
Swiss marketing company Teledirect announced plans on Tuesday to offer a phone-to-phone IP telephony service for corporate networks, and for consumers via pr-paid calling cards, using technology developed by US company IDT.
But while Teledirect plans to launch an IP telephony service based on IDT's Net2Phone Direct technology in Spain next month and in Hungary, Switzerland and Italy early next year, the service will probably not be rolled out in the UK.
The UK's phone market is already heavily deregulated and phone prices have dropped dramatically, said IDT spokeswoman Sarah Hofstetter. "It would be very hard to compete on price level in a country like the UK," she said.
For Teledirect, "it strategically makes sense to operate in countries that allow for competition, but are very new to it", said Hofstetter.
Another IP telephony operator in Europe, RSLCom, has similar views about operating in the UK, but has developed a different strategy to be able to compete effectively. "I would accept that the pricing here is very competitive and we wouldn't be using a phone-to-phone service to compete head on [with other operators]," said Ray O'Brien, RSLCom's European vice president.
RSLCom's IP telephony strategy is to offer calls on its own network from the UK to "far flung" destinations, said O'Brien, and so undercut other operators. RSLCom also sells IP telephony via new channels, such as to Internet service providers, Web sites and portals to enable them to offer their own telephony services.
However, UK businesses and consumers will not lose out if IP telephony operators concentrate their activity in other parts of Europe, according to analysts. "There is a significant number of companies providing low cost telephone rates. For British companies and consumers this means the choice is out there," said Ade Ajibulu, an analyst at Analysys in Cambridge, UK.
Cheap IP telephony calls are less important for UK corporates than those in other countries, because the country's telephony resale market is very well developed, said Ajibulu. "Most [UK] corporates, if they were looking for discount telephony, would go to a reseller [rather than use IP telephony] because of the quality issue," he said.
Teledirect will be the first to offer IDT's phone-to-phone IP telephony services in Europe. At present, IDT provides similar services in the US and Korea.
Teledirect said it will be able to offer significantly reduced phone rates, offering savings of up to 80 per cent on international voice and fax calls. IP telephony services have been hampered by complaints of poor line quality, but IDT says the call quality using its system is superior to digital cellular quality.
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