Thursday, February 05, 2004

Telia launches broadband telephony


Today (Feb. 5) Telia is launching its Telia Broadband Telephony service. In addition to telephony, the service will feature a chat function, videocalls and the possibility to send messages. Subscribers to the service can make phone calls free to each other, while calls outside the service will cost like an ordinary phone call. "

Comment from James Enck:
Daiwa EuroTelcoblog No. 20 Thursday, 5th February - TeliaSonera launches broadband telephony in Sweden

Anyone with the stamina to make it to page 104 of our recent sector piece
will recall that, on our multi-factor company rating sheet for TeliaSonera,
we gave the company a 1 rating for adaptability. Today brings another
development in support of this view. The company has just announced this
morning that it is to launch a SIP-based broadband telephony service in
Sweden, branded Telia Broadband Telephony.

Like the BT Broadband Voice service announced last year, it is an
operator-independent service, and it appears to us that the company may be
trying to use it to reclaim some revenue share among users of the municipal
fiber networks and CPS customers. Also as with BT, the charging structure is
set so as to avoid cannibalization - calls to fixed and mobile numbers are
charged at the standard rate. And unsurprisingly, TeliaSonera, like BT, does
not mention that once the service sits on a device, it is mobile, allowing
for some interesting price and location arbitrage opportunities (such as
making calls at Swedish national rates from a hotel in Sydney). However,
there are also some interesting differences between this and the BT
Broadband Voice product:

* TeliaSonera is employing a softphone client, rather than an analogue
telephone adaptor, which makes it a PC-to-PC service.
* TeliaSonera has leveraged more of the capabilities of SIP, including
video telephony, instant messaging and presence functions in the service
offering. (Note from Richard: because it is using HotSIP)
* On-net calls are free, which is common practice among the
independent SIP service providers in the US, but a feature which BT has so
far opted not to offer.
* There is an upfront activation fee of SEK250 (EUR27) and a monthly
fee of SEK80 (EUR8.70). Given some of the prices and services already
available in Sweden (see our sector note) we are somewhat skeptical about
the attractiveness of the activation fee, though the monthly fee is 19%
below that offered by B2 for its telephony service.

Beyond the revenue opportunities that TeliaSonera may see in such a product
offering (we think marginal), we think the early attack on the SIP front
will provide a valuable learning experience for the company, and also may
have an element of pre-emptiveness about it. We understand from Jeff
Pulver's excellent Pulver Report that a Norwegian start-up is planning to
launch a Nordic regional SIP service this year.
(Note from Richard. Telio (=Alan Duric)

We are trying to find out
more on this development, and will follow up on it and the TeliaSonera
development in our upcoming global monthly.

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