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AT&T Introduces IP Telephony Into Hong Kong Melee

Joining Hong Kong's Internet telephony race, AT&T's Hong Kong ISP operation, AT&T Easylink Services Ltd, has introduced its own IP telephony service to the Chinese territory, branded as AT&T@Phone.

"Offering IP telephony is the first step in what we are trying to do here," said Yvette Ong, managing director of Online Services for AT&T Easylink. "We are striving to provide value added service on top of the transport."

AT&T's goal in Hong Kong is to provide customers with a platform of services that is consistent with the global trend toward convergence of data, fax and voice technologies.

AT&T@Phone is currently offered in Japan and is consumer oriented, but, in Hong Kong, the service will focus more on the business market segment, Ong told Asia.InternetNews.

Analysts say that government deregulation and the issuing of International Simple Resale (ISR) licenses (now at 40 companies) will allow IP telephony to overcome entry barriers in Hong Kong.

"IP telephony further reduces the entry barriers by lowering the necessary economies of scale to be cost competitive," said Niq Lai, regional telecoms analyst at Credit Suisse First Boston. "It can be offered as an incremental revenue earner to existing business such as ISP and mobile."

Already, local startup Magic Tel Ltd and AT&T are the first ones to openly market and brand Internet telephony, and PSINet's local ISP, LinkAGE Online, is also likely to offer the service with its recent acquisition of an ISR license.

Lai pointed out that the use of Internet telephony allows for better service, innovations such as unified messaging and broadcast voicemail and the bundling of services.

Nevertheless, according to Ong, AT&T does not intend to get into Hong Kong's long distance price war but will concentrate on corporate customers.

In the area off Internet services, AT&T is also catering to the Hong Kong market, where businesses are not confident in network security, by offering its Managed Internet Service (MIS) which includes its Secure Solution service option.