Netspace flags telephony ambitions

Internet service provider Netspace has delayed the launch of its Internet telephony product due to expanding ambitions to provide a full-service telephone solution. Netspace had originally planned to start offering Internet telephony (also known as Voice over Internet Protocol or VoIP) in the first half of 2006, in addition to pre-selection for long-distance, mobile and international calls.

Internet service provider Netspace has delayed the launch of its Internet telephony product due to expanding ambitions to provide a full-service telephone solution.

Netspace had originally planned to start offering Internet telephony (also known as Voice over Internet Protocol or VoIP) in the first half of 2006, in addition to pre-selection for long-distance, mobile and international calls.

But those plans have now changed.

"We actually intend to go to market with a full-service offering, from line rental through to long-distance and VoIP," a spokesperson for the company told ZDNet Australia this morning.

"We've got a target date at the moment for the third quarter, we pushed it back probably by about 10 weeks or so."

The spokesperson said Netspace believed offering a full telephony product would be "well worth the slight delay".

Such an offering would be attractive to customers who might otherwise just use a large carrier such as Telstra or Optus for all their communications needs, he said.

Netspace will sell VoIP hardware from a preferred partner, but will support a wide range of Internet telephony devices, the spokesperson said. "We're not going to lock people to one particular solution."

Broadbanding Melbourne
On another front, Netspace has quietly migrated a number of its Melbourne customers onto the ISP's own ADSL2+ hardware in Telstra's telephone exchanges.

ADSL2+ allows speeds of up to 24Mbps. Most Australian ISPs (including Netspace) only offer speeds of up to 1.5Mbps, using the ADSL1 standard currently offered by Telstra's wholesale division.

The Netspace spokesperson said the limited Melbourne trial had led his company to conclude that it could handle a wider rollout "of fairly large proportions" if it chose that option.

However he said Netspace wouldn't yet commit to such a path, keeping its options open to instead buy ADSL2+ services from wholesale providers.

"We've also obviously been looking at the noises coming from Telstra in terms of what their plans and intentions are, and we've been in discussions with a number of other wholesale providers," he said.

The wholesale market for ADSL2+ services is expected to open up in the near future, with Optus, iiNet and NEC's NEXTEP division recently indicating their willingness to wholesale such services.

But the spokesperson claimed there was a lot of hype over the higher ADSL2+ speeds, perpetuated by a disproportionately small part of the market.

"Eighty percent of the market isn't even on 1.5Mbps at the moment," he said.

"We think the thing that's going to drive ADSL2+ or really any higher-speed service is content."

"It's a little bit of chicken and egg situation at the moment, what's going to come first, the speeds or the content."

The only services likely to fully utilise the higher speeds in the residential space are those based on video, for example video on demand or TV over the Internet. Some networked computer games may also utilise the speeds.

The business market is more likely to value the higher upload speeds allowed by ADSL2+, rather than just the pure download speed increases.

"We think higher speeds are very important, but a balanced view needs to be taken with them, based on real customer needs and other market conditions," said the spokesperson.

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