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August 28, 1997updated 03 Sep 2016 7:36pm

TELEKOM ENTERS INTERNET TELEPHONY MARKET WITH VOCALTEC STAKE

By CBR Staff Writer

Deutsche Telekom AG is making a strong commitment to the nascent internet telephony market with the signing of a deal with VocalTec Ltd for its internet telephony products and services, and the acquisition of a 21% stake in the Israeli company. Telekom and VocalTec have inked a memorandum of understanding for the German to purchase more than $30m of VocalTec products over the next two and a half years building on the two company’s work in Telekom’s recently-announced T-NetCall internet telephony pilot that provides service to 1,000 customers in Germany. The purchase of 2.3 million of Herzliya, Israel-based VocalTec’s Nasdaq-traded shares will cost Telekom around $48m, which represents a premium of more than $5 per share based on the closing price directly before the announcement. The move makes Telekom the largest single shareholder in VocalTec but it does not get a seat on the board. It is not clear if technology from other companies was involved in the original trial or whether it is still on-going. Telekom also could not say the extent of its roll-out over the next two and a half years. The first telco to announce an internet telephony service was Telecom Finland late last year, followed by NTT Corp in Japan, which announced a six month internet telephony trial in June. Deutsche Telekom, in its first postings as a listed company, reported profits of the equivalent of $1.77bn up from $1.27bn last year, on sales up 5.4% to $16.28bn – an expected seasonable boost.

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