The VoIP Week in Review

Welcome to another edition of TMCnet’s VoIP Week in Review. This week, the VoIP industry continued to focus on the “fallout” from last week’s Verizon vs. Vonage (News - Alert) VoIP Patent infringement case. As I’m sure you already know, an eight-member jury decided in federal court last week that Vonage must pay Verizon $58 million in past damages for infringing on several of its patents related to VoIP technology. The jury also declared that Vonage must pay a 5.5 percent royalty rate on any sales going forward. While still a far cry from the $197 million in damages sought by Verizon, Vonage shareholders saw the company’s stock price slip during the past week - so there is very real damage here beyond just the monetary settlement. Last Friday, Vonage issued a statement architected to quell investor jitter (pun intended), stating that it is “not going out of business” and furthermore that customers will not see any changes in their phone service.

“This issue has ramifications perhaps for the entire VoIP industry and is by no means the only set of patents requiring communications companies to pay royalties,” wrote TMC President Rich Tehrani in his article, “Verizon and Vonage Patent Dispute: What it Means to VoIP.” Indeed, many industry experts see this as a very serious threat to VoIP’s future (if not at least Vonage’s future). To hear what they’re saying, check the comments in Rich’s article, or check out the similar article written by TMC Editorial Director Greg Galitzine. Both offer the opportunity for readers to give their feedback on this precedent-setting, potentially landmark decision.

Despite the outcome of the court case, there was some positive news from Vonage this week: On Wednesday the company announced that it has teamed up with Motorola (News - Alert) to develop a new wireless router designed to make it easy for customers to use fax, telephone and Internet services all at the same time. The Motorola-built VT2542 wireless VoIP router includes a 4-port wired and 802.11 b/g wireless access point for home networking connectivity. The device, which is available at www.vonage.com, can connect up to two Vonage lines, including telephone and fax, through a high-speed Cable or DSL Internet connection. It also sports four Ethernet Local Area Network ports and an 802.11b/g Wireless port to support additional computers or other network devices.

“With the Motorola T2542, customers are able to use their Internet connection for the computer and the phone at the same time,” wrote TMCnet’s Susan Campbell in her article. “The router is positioned as being perfect for consumers seeking to get the added advantage of easily configuring a secure wireless network.”

In other news, VoIP solutions provider Cantata Technology on Monday announced the introduction of an enhanced version of its Excel Multi-Services Platform (MSP) 1010, which enables global service providers to rapidly and cost-effectively deploy revenue-generating applications as they transition to next generation networks.

“The enhanced version of the MSP 1010 includes the Sigtran M3UA protocol, allowing carriers to seamlessly deploy services and solutions in converged networks, where the connectivity is IP; yet internetworking is established through legacy SS7 protocols,” wrote TMCnet’s Spencer Chin in his article. “In addition, M3UA provides for increased bandwidth and reduced cost.”

Cantata also made news on Monday when it announced that it has added over 20 features to its IMG 1010 media and signaling VoIP gateway product, including support for ENUM and load balancing.

Also making a splash on Monday were the results of an Oracle-sponsored global communications industry survey, published by Economist Intelligence Unit, showing that about 68 percent of telecommunications executives worldwide believe VoIP services like Skype (News - Alert) are the main threat to fixed line revenues.

“Based on insights from 155 telecom executives in 36 countries, the survey warns fixed-line and wireless service providers to build up new revenue streams and continuously search for lucrative opportunities to preempt business decline,” wrote TMCnet’s Leo Blanco in his article. “In the survey, over 80 percent of industry executives believe voice calls will drastically decline and will no longer be the major source of revenues for communication carriers within six years. In addition, 60 percent senior executives predict this event will happen faster, within four years.”

“For communication carriers, the most effective strategy to negate declining voice calls is to introduce new services aside from price changes or marketing initiatives, according to 75 percent of executives in the survey,” Blanco added.

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