• Vonage Slowing Down?
• No Silver Lining for Vonage

Malik points to a slower pace of new customer acquisitions, strong competition from the cable companies and price wars in the VoIP service market.

T-Mobile plans to launch a Wi-Fi-cellular converged phone service in Seattle and potentially one other market next month on September 12th, sources say. More markets will follow soon after. The city of Chicago and the San Francisco Bay Area are the likely candidates for a possible rollout.

T-Mobile’s converged service is based on a standard called Unlicensed Mobile Access, popularly known by its acronym, UMA. The news that T-Mobile has been doing trials of services using the wireless convergence standard UMA have been slowly coming to light. Business Week points out a service targeted at in-home cell phone users called T-Mobile-At-Home, which seems like UMA, but the article doesn’t name the standard. Engadget had also posted information about the UMA trial.

We’ll see if T-Mobile can meet its planned launch date, but the company is eager to start deploying UMA given it can not only take a piece of in-home calls, but can also use UMA to handoff in its thousands of T-Mobile WiFi hotspots. UMA is a standard that enables the handoff of calls between cellular (GSM only) and unlicensed wireless like WiFi.

More than any other carrier in the U.S. T-Mobile has the incentive to use UMA — it ranks behind the top 3 U.S. carriers, only reported 613,000 net new customers for the second quarter of this year, and owns valuable WiFi real estate that it can use to grow those subscribers. The company would only confirm that UMA is one of the technologies that the company believes will help replace landline calls.

Few American households use voice-over-Internet Protocol (VoIP) services as their home phone but adoption is growing — up 20% since June 2005 — and most users are satisfied with their service.

About 3.9 million U.S. households used VoIP as home-phone service in January 2006, according to a study released Tuesday by Telephia, a market research firm. That accounts for about 3.5% of U.S. households, up from 2.9% using VoIP in June 2005. However, the survey didn’t include digital-phone offerings from cable companies like Comcast (nasdaq: CMCSA) and Time Warner (nyse: TWX), which hawk "triple-play" packages of television, high-speed data and phone service.

Of the non-cable VoIP services, Vonage leads the pack with a 47.5% market share, up from a 40% share last June. Vonage had almost four times the U.S. share of its closest competitor Skype, a unit of eBay (nasdaq: EBAY), which placed second with an 11.8% share.

Market share doesn’t necessarily lead to profitability, though. Vonage, which announced IPO plans last month, lost almost $190 million in the first nine months of 2005.

What a whopper of a year for cable telephony!

Cablevision, the last MSO to report its fourth quarter earnings added 130,000 new VoIP customers, up just 7,000 from the previous quarter. The company also added, 94,000 new broadband customers, up from 81,000 adds in the previous quarter. For 2005, Cablevision added 341,793 broadband subscribers and 458,653 VoIP subscribers. Time Warner had also experienced similar growth for its broadband and VoIP services. Some of the smaller players are experiencing triple digit growth in their voice subscribers. According to UBS research estimates, there were 5.1 million cable voice users at year end, up 63% annually and 14% sequentially.

Seems like the cable broadband VoIP service providers have really taken advantage of their unique position to bundle VoIP.  Their savvy has got to be making things tough for the VoIP pure-plays.

Concerned about VoIP E911? Here’s a list of all PSAPs in the U.S.

The recent imperative by VoIP service providers to make their E911 service compatible with the U.S.’ nearly 8,000 Public Safety Answering Points has generated a new focus on what these PSAPs are and what they do.One might think that PSAP territories totally overlap jurisdictional city and county boundaries. No, they don’t.So what PSAP are you [...]

Some analysts have responded to this news by hyperventilating, with claims of a coming "bloodbath" and the floor falling out of mobile phone operator stocks:

"Internet voice does not even have to take market share to force traditional operators to cut their prices. The mere thought of free voice is enough to make customers push for price cuts," said Mewawalla, predicting a bloodbath for mobile operator stocks.

and

Mewawalla continued: "The premium for wireless voice, without mobility, will disappear as wi-fi networks spread. By our estimates, that puts 75% of the market for mobile voice revenues at risk of a substantial price downgrade (in the order of 50%-80%). For some international calls, prices could fall by 90% or more."

But wasn’t this entirely predictable?  Why would there be surprise causing major declines in mobile operator stocks?  It’s certainly no secret that Microsoft is always looking to expand it’s reach and offerings.  Adding voice service to its Communicator line was an obvious next step.

It’s true that as WiFi becomes more ubiquitous, VoIP will continue to displace landline and GSM mobile calls.  This indeed will put downward pressure on mobile operator’s voice calling prices.

But mobile telephony firms don’t have to take it lying down.  Free VoIP calls over WiFi only work if you have access to a WiFi network in the first place.  Wireless broadband isn’t really at the point yet where it’s rivaling the reach of GSM service: hotspots don’t overlap and even if they did, one cannot maintain a VoIP call while moving from one hotspot to next, and many hotspots typically involve their own fees (T-Mobile is already making money by offering hotspot Internet access.)

This is a major advantage that GSM networks are going to have for quite some time in all but the most "wired" of wireless cities.  But that’s not the only thing that GSM operators can compete on.  Rather than running away from VoIP service, they can offer their own, giving customers a discount for making international calls using IP telephony.  Or they can compete on services: better quality or more innovative offerings.  In other words, at this point I think it’s too early to put the nails in the coffin of GSM operators.  They certainly have an opportunity to stay profitable; whether they take it or not, we will see.

Finally, while Live Communicator does have about 10 million customers, according to Ballmer, it’s not exactly as if every enterprise with Live is going to use this, and there are plenty that don’t use Live.  To say nothing of non-enterprise users who won’t have access to it.

Microsoft Live Communicator’s sales site: http://www.microsoft.com/rtc

VoIP is often written off as an application that will not work well over an SSL VPN link. To test that argument, we examined 10 SSL VPN products in four network scenarios to see how well VoIP calls were handled by the products’ network extension clients.

The news is generally good. In high-bandwidth, low-latency environments, there is virtually no difference in quality between an unencrypted VoIP call and the same call made over an SSL VPN (see chart). Even better news is our discovery that a VoIP call made over SSL VPN on a typical broadband Internet connection is of higher quality than an unencrypted call. The only bad news comes with truly awful network connections: ones with high loss and limited bandwidth. In this environment, neither unencrypted VoIP calls nor SSL VPN-protected calls will be considered acceptable (for example, below a mean opinion score [MOS] of 3).

Except for Fortinet’s Fortigate appliance, the vendors included in this test are the same as those that were tested for our blow-out SSL VPN test conducted last December. AEP Networks’ Netilla Security Platform, Array Networks, SPX-5000, Aventail’s Smart SSL VPN, Caymas Systems’ Caymas 525, Check Point’s Connectra, F5’s FirePass 4100, Juniper Networks’ Secure Access 6000, Nokia’s Secure Access System 500, Nortel’s VPN Gateway 3070 and SonicWall’s SSL-VPN 2000.

While our results do show some differences between products, small variations in the MOS should not be considered significant. What is more important, our testing demonstrates that SSL VPN and VoIP work together well over broadband networks, even in the face of some network loss and congestion. We also found that datagram-based SSL VPN techniques, such as those used by Nortel and Juniper (both optionally), do not appear to offer any real advantage for VoIP traffic and may give poorer results than TCP-based SSL VPN from the same vendors.

Here’s a Top 5 list of enterprise WiFi VOIP security issues, and some ways to guard against them:

Widespread deployment equals a security headache:
Because of the "ubiquity of deployment" in many enterprises, attacks can spread quickly and be targeted to take down multiple devices at once. IT managers should stay up to the minute with phone upgrades, and consider running phones over a separate physical or virtual LAN as a defense against these attacks.

Many points of attack:
As the phones get more sophisicated, so could the points of entry for malicious attacks increase. Bluetooth, email, client Web browsers, SMS, WiFi, media players, and image viewers could open back doors for hackers. Though users can use open-source and commercial tools to continually test their phones and networks, they’ll ultimately have to rely on vendors to do proactive testing on these devices.

"Some vendors may engage in this testing while the majority will not," warns Merdinger.

Targeting phones in public environments:
For example, a Bluetooth scanner could be hidden at the entrance to a major airport or train station and be used to grab user data. It may be best to keep Bluetooth and other wireless features swicthed off when not needed.

Rogue again:
Meanwhile, at the office and on the road, users and IT departments will have to keep their guard up and scan for rogue access points. Hackers will set up access points to specifically target WiFi phones in the corporate space as well as at hotels, conferences, and other places business people like to congregate. Good device authentication and encryption can help provide protection here.

Targeted attacks:
Targeted attacks on specific voice-over-wireless networks could also be an issue, albeit one that the victims may try to downplay. "There will be targeted attacks on VoIP networks [from hackers or competitors] that will be kept quiet if there is no legal requirement for disclosure or obvious public knowledge," Merdinger says.

Users, however, shouldn’t get in a snit about VOIP calls that are often unencrypted and therefore easier to listen in on. Unless attackers are targeting a specific user, it is much simpler to find useful information sent by the user or held on the phone than to listen in on calls, even if you’re the NSA.

"Most attackers are going to go after text information — much easier to parse for the juicy information," says Merdinger.

In a coming-of-age for the fledgling Internet-based phone industry, No. 1 provider Vonage plans an initial public offering to raise up to $250 million, the company said Wednesday in a regulatory filing.

The Vonage offering would mark the first IPO by an Internet-based phone company that markets almost exclusively to consumers, says Stanford Group analyst Clayton Moran. Net2Phone and several other publicly traded companies largely provide wholesale services.

"It definitely signals that it’s having a significant impact on the (telecom) market," Moran says, noting Vonage also faces tough challenges.

The terms of the offering have not been set.

Vonage has far outpaced its rivals, drawing 1.4 million subscribers since its start in October 2002. The total number of Voice over Internet Protocol users is projected to grow from 3.3 million to 18 million by 2009, research firm In-Stat says.

The kit includes a wireless handset and Bluetooth adapter to ensure compatibility and seamless voice clarity. The handset follows the traditional button behavior of a traditional handset, but also supports all of the popular Skype™ standard functions such as Contacts, Call List, SkypeOut, Conference Call, etc. Furthermore, the TVP-SP1BK comes with a long-life rechargeable Lithium-ion battery able to sustain up to 6 hours talk time and over 60 hours on standby.

“Skype™ has become a preferred VoIP service for a large segment of our customer base worldwide,” stated Heath Gregory, Marketing Director for TRENDnet. “Up till now most users have used wired headsets or USB attached handsets. By using Bluetooth we deliver a wireless connection that can seamlessly coexist with 802.11b/g devices and ultimately improve their Skype™ user experience.”

Check it out at: http://www.trendnet.com/skype/