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Top Phone Firm Invests in VoIP Venture

AT&T Strategic Ventures Tuesday invested $10 million in Nuera Communications in order to accelerate its ability to deliver packetized voice services worldwide.

Nuera Communications is a leading provider of voice over Internet protocol solutions. The company's Open, Reliable Communications Architecture enables seamless voice traffic transport between public switched telephone networks and packet or IP-based networks.

AT&T's investment accounted for more than 35 percent of Nuera's recently completed $28.5 million financing round.

Additionally, AT&T Broadband and AT&T Wireless entered into strategic alliances with the VoIP solutions provider to guarantee ongoing technical exchanges between the AT&T business divisions and Nuera.

Glenn Edens, AT&T Strategic Ventures president, said the investment in Nuera reflects AT&T's commitment to dominate the market in high-speed access for both voice and data.

"AT&T Strategic Ventures has looked carefully at investment opportunities and believes Nuera is a leader in the VoIP market," Edens said. "We look forward to fostering a long-term relationship between AT&T and Nuera."

Bill Ingram, Nuera chief executive officer, said VoIP is the next big revenue stream that broadband carriers need to develop in order to compete.

"Our mission is to deliver voice over IP via cable and fixed wireless infrastructures to help carriers implement revenue-generating services," Ingram said. "Strategic relationships with carriers like AT&T are what set companies apart in today's competitive landscape."

Nuera's carrier-class ORCA solutions is designed to open new markets within the broadband industry for AT&T. Nuera is also working on the technology that would enable AT&T to deliver telephone-quality voice services over cable networks for residential and business customers.

Frost & Sullivan forecasts that rampant investment in IP-based telephony technology is set to transform the IP services marketplace.

According to the independent research firm, VoIP technology will open new dimensions in international calling and lower calling costs, especially in remote geographical regions with relatively low teledensity.

Donald Tait, Frost & Sullivan research analyst, said that VoIP service packages could be priced at a level where they are attractive to customers and still generate robust margins.

"This will also enable businesses to conduct international transactions more effectively and cheaply, consequently introducing competition and increased commerce to their markets," Tait said.

Frost & Sullivan forecasts that the overall growth in IP services is set to soar to new heights in the wake of the exploding number of Internet service providers and the slew of telcos utilizing IP telephony as a means to avoid arbitrage charges.

Additionally, the research firm contends that the flexibility and scalability of IP networks are key factors, which will influence demand for such services to dramatically increase. Running voice over cable, DSL and wireless that connect to the PSTN at either end of the call enables service providers to undercut PSTN rates significantly, creating a market driven initially by price competition.

IP technology is at the heart of converging voice and data layers of services to produce personalized communications over Web servers and mobile phones by working together with more traditional PSTN systems.