AT&T creates group to develop VOIP technology standards

September 24, 2004

2 Min Read
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AT&T Corp. AT&T Corp. (NYSE: T) is betting its future -- what's left of it -- on providing VOIP services to companies. To this end, the carrier made several announcements this week aimed at dominating and promoting enterprise interest in VOIP service (see AT&T Lines Up VOIP Partners).

According to a report released yesterday by the carrier and the Economist Intelligence Unit (EIU), 43 percent of 254 executives surveyed worldwide say they are either using or testing VOIP services, or plan to use the technology in the next two years.

This is good news for AT&T, a carrier struggling to find longer lasting sources of revenue after shedding its consumer business in July (see Can AT&T Stand Alone?).

Earlier this week AT&T said it is collaborating with Cisco Systems Inc. (Nasdaq: CSCO), Intel Corp. (Nasdaq: INTC), and other companies to develop standards for building VOIP hardware and software. Creating standards for VOIP equipment to be compatible with AT&T services could allow the company to carve out a lasting place in the VOIP service provider market.

AT&T announced this week 23 companies -- including Air Products & Chemicals Inc., Bausch and Lomb, and VTech Holdings Ltd. -- have signed on to a pilot program that will provide VOIP services to remote workers of international companies.Analysts say companies are most interested in building a VOIP network because they see it as a way to save money.

According to the AT&T and EIU survey, 87 percent of those surveyed say lowering telephone charges is a critical reason for using VOIP service.

It gives enterprises the ability to merge voice and data into one network. It also lowers costs -- it reduces manpower, training, and support systems needed,” says Jon Arnold, analyst at Frost & Sullivan.

— Joanna Sabatini, Reporter, Light Reading

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