France Télécom and Microsoft to develop joint products

Telecommunications operator France Télécom and Microsoft are making a series of feature-rich wireless VoIP (voice over Internet Protocol) phones for home and office use, they announced Wednesday.

The companies are also working on integrating services in France Télécom’s data centers using Web services technologies, the companies’ respective chief executive officers, Didier Lombard and Steve Ballmer, said at a joint news conference in Paris.

The two projects are the first in a series the companies will work on together as part of a technology partnership they announced last week.

Two phones are already in development as a result of the collaboration.

The first, LivePhone, will allow customers to place VoIP calls over a Wi-Fi wireless LAN connection, through one of France Télécom’s LiveBox wireless home broadband gateway devices and out to the telephone network, without the need to turn on a computer. LivePhone will use SIP (Session Initiation Protocol) to handle calls.

The other phone, Homezone, will be based on a GSM (Global System for Mobile Communications) mobile phone with built-in Wi-Fi capability, and will allow calls to be placed over the GSM network while on the move, or through a gateway device such as the LiveBox when at home. Like LivePhone, Homezone will be based on SIP — but it will also use another protocol, UMA (Unlicensed Mobile Access) to authenticate the phone’s identity before placing the call. UMA allows a phone to contact a central authentication server over a non-GSM access network, such as a Wi-Fi home base station with Internet access, and to authenticate the phone using the GSM SIM (Subscriber Identity Module).

Ballmer estimated the products could be ready within 12 to 18 months. At a news conference last week, however, Lombard said LivePhone will go on sale in October of this year.

As for the other project, “Web services are the most important thing going on in IT,” Ballmer said, adding that their importance can be judged by the fact that some of the biggest companies in IT have come together to develop common standards for opening up and linking their applications together as Web services.

So far, applications running in telecommunications operators’ data centers, such as call-center software and billing functions, have not been linked together in ways accessible to third parties. Yet making it easier to interconnect these functions in various ways is important for the development of new services, according to Lombard and Ballmer.

“We are going to want to glue the whole lot of services together,” and to do that, “There are a lot of protocols that we need to integrate in the data center of a telco,” Ballmer said.

More important than the two projects, though, is the framework agreement between the two companies, Lombard said.

“In all the services we want to give our customers, there’s a substantial part of software,” he said.

The companies could have gone ahead and developed such products together on a case-by-case basis, but that would have led to repetitive negotiations over how to share the cost, revenue and intellectual property rights, Lombard said.

“We needed the framework so that each time we add a new product to the basket, we know how to share the intellectual property.”

The cost of developing each product will be shared in varying proportions by the two companies, with each adding resources as necessary to complete its part of the work, but on average, costs will probably be shared equally, Ballmer said.

There are other areas in which the companies are working together, or could do so.

One such is smart phones. France Télécom has already sold several generations of mobile phones running Microsoft software through its Orange mobile phone subsidiary. The SPV series of phones has not been an enormous commercial success, though, and even the latest generation “doesn’t completely fulfill our vision of what a customer needs,” Lombard said. However, “With the next generation, we will give the customers exactly what they need,” he said.

The two companies are not currently working on making their Internet instant messaging software compatible, but this could become the subject of a future collaboration. “The framework agreement permits all kinds of interoperability. Each company needs to look at how to achieve interoperability and how to achieve mutual business goals,” Ballmer said.

Before the development of the Internet took off in France, France Télécom was often lampooned for continuing to support its aging Minitel service while other countries were rushing ahead to deploy multimedia services over the Internet. Minitel delivers information to business or home users over an X.25 packet data network to dumb terminals that display chunky color graphics and text on a compact 40-character by 25-line display. While outclassed technologically, Minitel still offers one great advantage over the Internet, in that it offers phone subscribers a simple way to access commercial services, paying for them through their fixed-line telephone bill.

Minitel could get a new lease of life from France Télécom’s collaboration with Microsoft: “There will probably be new terminals of this type: it’s the logical thing to do,” Lombard said, “But it won’t be called Minitel.”