EUROPE WARMS TO INTERNET TELEPHONY.

The surging popularity of Internet telephony among private clients in Europe, widely promoted by alternative operators, is likely to draw a counter-attack from traditional operators determined to preserve their revenue, according to experts. Offered by Free and Neuf Telecom in France and by FastWeb in Italy, voice IP (VoIP) is big used by alternative operators to attract clients. Operators offer very low prices or even free fixed calls in the context of triple play" offers combining Internet access, telephony and television. "Grouping services together permits operators to limit price comparisons and build client loyalty. Fundamentally, however, VoIP is a disruptive technology like low cost operators in the air transport sector", according to Cesar Zeitouni of IT Asset Management. Traditional operators must adapt in order to avoid losing clients and resist the erosion of their fixed telephony activities. France Telecom has for example launched a telephony offer reserved for Wanadoo subscribers permitting clients to make calls from a PC to a traditional telephone. The operator is also pledging that subscribers to this service will soon be able to receive calls too. The French group is also expected in the longer term to convert to grouped service offers. France Telecom writes in a reference document that "broadband has transformed operators as they aim to offer new services such as games, voice IP, videophones and television via a domestic bridge connected to the Internet".

Experts suggest that whilst the...