Asian telecom carriers will be tempted to cannibalise their own international direct dial (IDD) revenues by offering Internet telephony as a second-tier service, according to a consultant with a leading British telecom advisory firm.
With at least three Hong Kong companies working on Internet Protocol (IP) telephony business plans, Jahangir Raina, of Philips Tarifica, said a large portion of the subscriber market would go for the cheapest option.
Australian outfit OzEmail claims its implementation of IP telephony - franchised to operators in Europe, America and Asia - has compelling cost advantages.
Michael Atkinson, international business manager for OzEmail, said from Zurich last week the direct cost for OzEmail to place a phone or fax call was three times less than an international carrier using conventional switched circuits. 'Even with callback rates we can compete,' he said.
His company is rolling out its service in Europe with German Internet services giant Metro, which has acquired an equity stake in the OzEmail Phone operation and holds an exclusive franchise to run OzEmail Phone in Europe.
Mr Raina said the calling market could be separated into customers seeking a higher quality call for a higher price (circuit switched), or a lower quality call for a lower price (IP).
