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COTAS-TELEDATA DELIVERS TELECOM TO BOLIVIA USING ITXC.NET.

The early winner in the newly-deregulated telephony market of Bolivia is Cotas, Ltda. using voice over the Internet provided by ITXC Corp. (Nasdaq:ITXC), Princeton, N.J. for both domestic and international long distance.

Since deregulation on November 28, 2001, Cotas believes it has already wrestled 36% market share in its base of Santa Cruz from the former monopoly carrier, Entel, while a third competitor, AES, which resells Entel's network, has 8% market share in Santa Cruz. Additionally, Cotas has 10-15% market share nationwide.

"The real winners are the people and businesses who make calls," according to Rodolfo Weise of Teledata. "We are able to offer them both faster call completion and better rates than were available in monopoly days. Using ITXC.net through our subsidiary Cotas-Teledata means that we have both a national and international network at our disposal with almost no capital outlay on our part. Our resources have been concentrated on local buildout, the local aspects of service, and marketing."

Cotas Ltda. is the local telephone operator for Santa Cruz, Bolivia and the second-largest local exchange carrier in Bolivia. Cotas-Teledata, a subsidiary of Cotas, was established to provide new long distance and enhanced services nationwide.

ITXC is the largest US-based global carrier dedicated exclusively to carrying voice and fax calls on behalf of other carriers. ITXC has permanently changed the economics of international long distance by establishing and operating ITXC.net(SM), which provides high call quality over the Internet.

"The experience of the CLECs in the United States and the rest of Latin America has shown the difficulty of competing against an incumbent operator by reselling its services," said Catalina Robledo, Bolivia telecom analyst at Pyramid Research. "Clearly you can't beat them on quality when you are using their network; and competing with them on price when you are buying from them means no margins to support the marketing necessary to unseat them. The alliance between Cotas and ITXC allows Cotas to compete on both quality and price while avoiding the huge capital cost that would be involved if Cotas had to build a traditional PSTN network." Robledo adds, "Economizing on these costs has allowed the Bolivian operator to channel some of its energies and resources toward new projects such as the provisioning of mobile telephony, making Cotas one of the few one-stop-shop communications providers in Bolivia."

Until deregulation day on November 28, 2001, it was not legal to place any long distance calls from the public phone network except through the incumbent, Entel, even for the purpose of network testing. Therefore, ITXC and Sittel, the Bolivian regulator, expected initial network testing and troubleshooting to occur in the first month of commercial service.

During this period, Bolivians began using a new multicarrier dialing system to choose their preferred carrier on a call-by-call basis while Cotas-Teledata interconnected with the other local telephone operators in Bolivia.

After a hectic start during which the entire network had to be debugged and tested end-to-end and in volume for the first time, ITXC is now providing higher quality phone service for Cotas-Teledata's customers than that provided by the PSTN carriers.

ITXC can provide SS7 or C7 connectivity directly to ITXC.net at local switches anywhere in the world for both call origination and termination. Calls are routed directly over ITXC.net from originator to terminator with no intervening switches, unlike international traffic flow in a legacy phone network which must be routed through a hierarchy of switches.

Each intermediate switch adds delay to call setup and increases the chance that congestion, routing errors, or other problems will cause calls to be dropped. The result is better quality: the call completion rate on ITXC.net is often higher than other wholesale carriers can provide and there is less delay between when the last digit is dialed and a phone rings at the far end - better known as PDD (Post Dial Delay).

In a recent test, calls were placed from Bolivia to the country's top ten international call destinations through different carriers to measure PDD. ITXC's PDD was 21% shorter than Entel's, Bolivian's incumbent carrier, and 30% shorter than AES's, a local telephone operator that is competing in Bolivia's long distance market reselling Entel's network.

ITXC's PDD to the US, the number one international destination from Bolivia, was 64% shorter than Entel's and 69% shorter than AES's. ITXC's PDD to non-US destinations was on average 20% shorter than Entel or AES's.

In general, low PDD means higher customer satisfaction and higher call completion rates. Since consumers in Bolivia make a carrier selection every time they make a long distance call, customer satisfaction is key to traffic volumes.

In June 2001, Cotas-Teledata, ITXC, and regional partner Heilsberg S.A. announced their strategic alliance making ITXC the exclusive network provider for Cotas-Teledata's new competitive long distance service. It took the companies just five months to roll out the service.

According to Cotas-Teledata, they plan to increase their share of the Bolivian domestic and international long distance market share to 18% by the end of 2002.

Working with Heilsberg, a British and German-financed company and parent company Carrier 116 in Chile, ITXC has provided Internet access, its network design and engineering expertise, network management, VoIP infrastructure, a competitive pricing team, and technology to Cotas-Teledata.

ITXC has also provided Cotas-Teledata with SS7-enabled SNARCs(SM) which are ITXC-owned and operated IP telephony equipment co-located at a qualified, licensed carrier's premise.

"In order to compete effectively, Cotas had to be in the market on opening day despite the fact that no prior full-system testing was allowed," said ITXC chairman and CEO Tom Evslin. "It took tremendous cooperation between Cotas, Cotas-Teledata, Heilsberg, ITXC, and gateway-vendor VocalTec to be ready for that day and to make adjustments on the fly in the 30 day `test period' which began live service. Speed-to-market is one of the many advantages of voice over the Internet. A legacy PSTN network could simply not have been deployed anywhere near on time even if the capital to pay for it were available. The Internet is already everywhere so speed-to-market is extremely fast. Now the effort is paying off in better calling options for Bolivians and growing market share for Cotas."

About ITXC Corp.

In just four years of operation, ITXC Corp. (NASDAQ:ITXC) Princeton, N.J., has become the largest global carrier based in the US dedicated exclusively to carrying voice calls on behalf of other carriers.

ITXC has permanently changed the economics of international long distance by establishing and operating ITXC.net(SM), the company's Internet-based voice network of 790 PoPs in over 390 cities and 148 countries, which delivers carrier-grade voice quality.

ITXC's patented and patent pending BestValue Routing(TM) technology provides such high voice quality that tier one carriers use ITXC for worldwide phone-to-phone traffic without needing to tell their customers that the calls are actually traveling over the Internet.

Customers include almost all major carriers and most RBOCs in the US, many major traditional carriers worldwide, new competitive carriers in deregulating countries including local exchange operators (LECs) who outsource their new domestic and international long distance services to ITXC and Internet-based Web-to-phone providers.

For more information, visit http://www.itxc.com or call 609/750-3276.
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Comment:COTAS-TELEDATA DELIVERS TELECOM TO BOLIVIA USING ITXC.NET.
Publication:Worldwide Telecom
Geographic Code:3BOLI
Date:Mar 1, 2002
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