June 13, 2005

By Jason Deign,News@Cisco

Linksys®, a division of Cisco Systems, Inc., kicks off the boldest consumer promotion of its history this week in the United States, offering a unique trade-in program for wireless customers.

Customers can trade in any wireless router for a Linksys Wireless-G Router with 2 Phone Ports (WRTP54G) and get two of the latest networking technologies at the same time, while supplies last.

Customers can experience networking speeds up to five times faster than wireless-B and significantly cut their telephone costs by using a high-quality, feature rich phone service from Vonage through a cable or DSL Internet connection. And the hardware is free, through rebates.

The US-only promotion runs through to Saturday July 23, 2005 and is the latest in a number of enticements that are turning consumers on to home voice over IP (VoIP), which enables people to make low-cost phone calls using their broadband Internet connection, with the same quality as traditional phone service.

Linksys, which is estimated to have owned 96 percent of the US retail home VoIP market in March 2005, according to NPD Techworld, has seen an explosion in demand for its products.

The company started shipping home VoIP equipment in August 2004 and by September had delivered more than 131,000 ports. By December the figure had reached nearly 604,000.

Linksys then hit the million-shipment mark in February, six months from first releasing its products, and by March this year had delivered almost 1.5 million ports.

According to In-Stat/MDR, a leading market research firm, by the end of 2008, 10.3 percent of the 59.1 million broadband users in the US will use IP telephony, and from 2004 through 2008 over 33 million VoIP-enabled broadband access devices will ship worldwide.

Mindful of the fact that having the right hardware is only part of the equation for consumer VoIP delivery, Linksys has been tying up alliances with service providers worldwide to be able to give customers an all-in-one package.

Linksys' strategy of forging links with service providers pre-dates VoIP.

In May 2004, for example, the company announced that in Britain its WAG54G-UK wireless-G asynchronous DSL gateway would be bundled with the DSL Pro service offered by Tiscali Business Services UK, a subsidiary of Europe's largest independent Internet service provider.

The first service provider to enter into a similar agreement over VoIP was the leading broadband phone company Vonage Holdings Corp., offering subscribers a choice of the Linksys (PAP2) Phone Adapter with 2 Phone Ports or the (RT31P2) Broadband Router with 2 Phone Ports.

The August 2004 announcement was followed in November by the news that Vonage would bundle the Linksys Wireless-G Broadband Router with 2 phone ports (WRT54GP2) with its service.

"Recognizing the need for residents and small businesses to have myriad of options when setting up their networks, Vonage is excited to work with Linksys to continue to lead the way in transforming how people communicate," says Jeffrey A. Citron, Vonage's chairman and chief executive.

"More importantly, the Wireless-G Router bundled with Vonage's service is the next step in modernizing an archaic telecommunications network. No longer will people be stuck in the past and tied down to communications systems that fail to offer true mobility."

Meanwhile, AT&T and Linksys announced the offering of new VoIP devices that combined the capabilities of a wired or wireless router with an analog telephone adapter (ATA), giving AT&T CallVantage service customers simplified options for their VoIP home networking needs.

The AT&T CallVantage service-certified Linksys equipment consisted of a Wired Router with 2 Phone Ports and a Wireless-G Router with 2 phone ports, eliminating the need for multiple devices for broadband telephony and computer networking when a user wanted both.

Cathy Martine, AT&T senior vice president for Internet Telephony, says: "Linksys is one of the most recognizable and respected brands in home networking.

"Working together, we will provide households with the ability to quickly and efficiently optimize their communications and home networking needs."

Linksys, a charter member of the AT&T VoIP Innovation and Interoperability Program, worked closely with AT&T to design wired and wireless routers with voice capabilities that are compatible and certified to work with AT&T CallVantage.

The service is available to any US consumer and provides a local footprint to 62 percent of the households in America due to its broad penetration in more than 170 markets coast-to-coast.

Later, in September 2004, Linksys announced that Verizon, one of the world's largest telecommunications companies, would offer the Linksys Phone Adapter with 2 Phone Ports (PAP2) to customers that signed up for Verizon's new VoiceWing VoIP service.

The service allows Verizon customers to make low-cost, high-quality calls over broadband Internet connections. Verizon customers simply have to plug their phone into the adapter and the adapter into their DSL or cable modem to make VoIP calls.

In addition to Verizon, AT&T and Vonage, Linksys has tied down deals with AOL in the US, Vonage in the UK, Phone Systems in France, NGI in Italy and PeopleCall in Spain.

"By providing customers with both the hardware and service they need to make high-quality phone calls over their broadband connection, customers get a better overall value and user experience," said Mike Wagner, Linksys director of worldwide marketing.

"Marketing the product and service together enables us to educate more customers about the benefits and cost savings VoIP can provide."

Jason Deign is a freelance journalist located in Barcelona, Spain.