Teleglobe Offers Wholesale, Retail Global IPTelephony Services

Written by Khali
October 31, 1999

Posted: 11/1999

Teleglobe Offers Wholesale, Retail Global IP
Telephony Services
By Khali Henderson

Tapping into the nearly $3 billion market for Internet protocol (IP) telephony
services, Reston, Va.-based Teleglobe Communications Corp. announced it will offer voice
over IP (VoIP) services to its expanding global base of carrier, Internet service provider
(ISP), Internet content provider (ICP) and business customers. Customers are using the
service in Russia and South America.

The new offering will use the company’s global fiber backbone instead of the public
Internet. The service will be accessible from any of 150 countries in which Teleglobe has
bilateral agreements in place. In Russia, for example, a dedicated line was installed from
Russia to Montreal with gateways on either end. Data calls are sent to a router and voice
calls are sent to the switch for termination.

In addition, customers located near any of Teleglobe’s GlobeCity nodes only will need
to obtain a local private-line connection to the GlobeCity access point to use Telelgobe’s
worldwide Internet telephony services. Currently, Teleglobe has 32 GlobalCity access
points in various cities throughout the world. As part of the company’s GlobeSystem
strategy to build a globally integrated Internet, voice, data and video network announced
in May, the company plans to install 160 GlobeCity access points; about 30 will be
deployed each year for five years.

The company’s VoIP offer is a result of demand from customers in less developed
countries seeking efficiencies of a voice/data network and/or the ability to circumvent
the traditional accounting rate structure using more economical and unregulated IP
transport, says Andrew Burroughs, vice president, global marketing and product management,
Teleglobe.

Burroughs cautions the offer is not merely a rate-arbitrage proposition, but that the
company wanted to ensure with its VoIP service a call that is equal to or better in
quality than a circuit-switched call.

"Our VoIP service gives customers the same level of quality that they have come to
expect from traditional telephony," he says. "As the service uses our global
fiber backbone instead of the public Internet, VoIP calls are not subject to degradation
resulting from regional and peak-bandwidth fluctuations. In addition, we have implemented
specific technologies to ensure that quality of service (QoS) remains at the high level
Teleglobe customers have come to expect from our telephony services."

For example, compression, packetization and transmission delays are engineered to
deliver calls with an end-to-end delay within the tolerance necessary to maintain toll
quality. The service-percent availability is designed to match that of traditional voice
networks. Teleglobe’s VoIP service also includes fax support.

According to a recent Framingham, Mass.-based International Data Corp. (IDC) report,
the worldwide IP telephony market will explode from 310 million minutes of use in 1998 to
2.7 billion by year-end 1999. By 2004, IP telephony minutes will reach 135 billion.
Revenues for this service will skyrocket from $480 million in 1999 to $19 billion by 2004.