Cicero Lauches VoIP Phone It Calls Threat To Mobile Revenue

LONDON -(Dow Jones)- Cicero Networks, an Irish mobile telecommunications system developer, Tuesday launched a converged telephone service that it believes will pose a threat to traditional mobile operators' revenue.

The company's chief executive made the claim after unveiling the CiceroPhone - a system that enables customers in the fixed-line telecoms and alternative service provider sectors to offer consumers more cost-effective wireless Voice over Internet Protocol, or VoIP, services.

Cicero's service will appeal to cable companies, fixed-line companies and virtual service operators looking to offer users low-cost mobile access without signing large capacity deals with existing mobile network operators.

VoIP allows consumers to route calls over the Internet, saving them money on traditional fixed-line phone services. When in range of Wi-Fi hotspots, consumers would be able to use wireless VoIP services instead of traditional mobile phone services.

BT Group PLC (BT), the U.K.'s incumbent fixed-line telecoms provider, has launched BT Fusion, a converged mobile device that charges users at fixed-line rates within the user's home and at standard mobile rates when outside. Meanwhile, VoIP provider Skype has signed a deal with German mobile network E-Plus, owned by Dutch KPN NV (KPN), to offer wireless VoIP in Germany.

"CiceroPhone combines the best cellular service with the best fixed-line service from a user, not a network, perspective," Cicero Networks Chief Executive Ross Brennan told Dow Jones Newswires.

He said that unlike BT Fusion, Cicero offers users control over what network they want to use, and at what time. CiceroPhone comes with a dynamic router that tells users whether they're connected to a mobile or a Wi-Fi hotspot.

Brennan said many users are likely to stay within range of Wi-Fi hotspots to avoid paying extra for mobile calls.

"This will tend to benefit the fixed-line companies as a result. Users will only want to pay for cellular access when they have to," he said.

Brennan said the company has been working with all major handset manufacturers in Europe, the U.S. and Asia, as well as some network equipment manufacturers. CiceroPhone will be immediately available on Microsoft Corp.'s (MSFT) Windows Mobile-based phones, and will be available on Symbian PLC (SYN.YY) phones by the end of the year.

He said the biggest obstacle to take-up of wireless VoIP has been a shortage of handsets, with personal digital assistants, or PDAs, the only devices on the market capable of carrying both mobile and Wi-Fi calls. BT Fusion will offer a Wi-Fi-capable handset in 2006, its initial service using short-range Bluetooth technology.

However, Brennan expects a steady stream of converged devices to emerge in the latter part of 2005. He said 2006 will prove a very important year for fixed-mobile convergence, with usage set to increase significantly in 2007.

He added that during 2006, the company will look at developing converged short-message service due to strong demand, as well as converged video services, which will be reliant on capable handsets emerging.

Brennan said that the company is focusing on Europe as the cost differential between fixed and mobile tariffs is still wide.

Cicero was founded in 2002 and has received backing from the Irish government and investment company Mianach.

Brennan said Cicero will focus on revenue growth, not profitability, in the short term and isn't yet considering a flotation of the business.

Company Web site: http://www.ciceronetworks.com

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 6th September 2005