Bay Networks has dipped a toe in the water of voice-on-the-Net technology by taking a stake in Netspeak, an IP telephony developer.
The world's third networking company has agreed to buy nine per cent of Netspeak for more than $37 million, in a move that will put voice-over-IP technology into its line of routers and remote access equipment. Bay has also guaranteed its right to buy additional shares in the future.
Netspeak specialises in technology that uses IP, the basic language of the Internet, to carry telephone conversations and faxes over the Net.
?Initially our customers will see tremendous cost savings and opportunity as they transition to IP for long distance voice calls, but in the future they will be able to create business solutions with the consolidation of voice, video and data,? said David House, chairman, CEO and president of Bay Networks.
Bay is not alone in wanting a piece of the Netspeak pie. Other investors include Siemens, MCI, Fujitsu and Motorola, which last summer boosted its share in the company to 11.6 per cent.
Despite the suppliers' excitement about voice-over-IP, research by IDC estimates that Internet telephony currently accounts for an estimated 0.08 per cent of total international long distance traffic. Even with an annual growth rate of 137.9 per cent that share would still be under one per cent by 2001.
Chris Lewis, an analyst for Yankee Group, believes that large corporations will initially reap the benefits of voice-over-IP for inhouse international communications, and it will be a while yet before traditional telephone networks are threatened. ?It is not going to happen quickly, there are too many vested interests, but we should see fully integrated networks connected to every home by around 2010 or 2020,? he said.
Despite these cautious forecasts, a spokesman for BT admitted that, although the threat to its public business will be negligible in the short term, it regards the subject as a "hot potato".
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