IP TELEPHONY GAINING ACCEPTANCE
Sage Research Releases New Study of US Businesses

Natick, MA - September 18, 2001 - IP telephony appears to be on the verge of a breakthrough, according to a new study published by Sage Research, Inc., although significant risk factors to its deployment still exist. The vast majority (86%) of US organizations surveyed report they are in various stages of evaluating or deploying IP telephony, revealing a strong interest in the technology. The study also highlights, however, a number of factors which could deter these organizations from deploying IP telephony, including perceptions that the technology lacks maturity and skepticism about the level of cost savings that can be realized.

"We've all heard the rosy forecasts for IP telephony," notes Kathryn Korostoff, Sage's President. "Sage designed this study to measure actual deployment plans to get a realistic, conservative measure of organizations' plans to use IP telephony. While these results indicate a significant near-term opportunity, the research also identifies some risk factors. These will need to be addressed by suppliers if customer plans are to be fully realized."

The report identifies a significant challenge for IP telephony equipment vendors: organizations tend to keep their PBXs well after they have been depreciated. In fact, more than half of the organizations surveyed have equipment that is at least five years old, and thus is likely depreciated. This challenges the widely held assumption that demand for IP PBXs will occur when legacy equipment is depreciated-clearly, additional benefits must be realized to compel customers to migrate to IP PBXs.

Another risk factor is that existing PBXs are underutilized. Nearly half of the organizations report that they have significantly fewer telephones connected to their PBXs than the equipment accommodates. Surprisingly, this overcapacity is independent of the age of the equipment.

The research also addresses the "lease vs. buy" decision organizations face in deciding on IP Centrex vs. IP PBX. "IP telephony will allow carriers to overcome the traditional limitations of Centrex," notes Korostoff. "While the availability of IP Centrex services is limited, our research indicates that customer awareness of and favorability towards these services are growing." The study also analyzes key selection criteria used by organizations purchasing IP PBXs.

For the study, telecommunications professionals from 157 US organizations were surveyed regarding their current and future use of IP telephony. These professionals primarily represent organizations spending more than $5,000 per month on telecommunications services.

Executone Mountain West grew 48% last year; Payzant expects to exceed that level of growth in 2001.

"We've had wonderful success over the years, thanks to our great team and longstanding customer relationships," continued Payzant. "These improvements to our product and service lines will serve to strengthen those relationships because they demonstrate our renewed commitment to customer service."

Mountain West Telecom has broadened its offerings of best-in-class products for data and voice communications to provide integrated applications. A pioneer in telecommunications, the company has been delivering mission critical products and services to hospitals, municipalities, the federal government and businesses in Utah for more than 50 years. In addition to providing basic telephone and voice mail systems, Mountain West has added advanced applications like speech recognition, unified messaging, wireless and Internet protocal (IP) telephony to meet the changing requirements of its customers.

Two senior positions have been created and Dale Zuelch and Iain Beveridge, industry veterans with over 20 years of telecommunications experience, have joined the company to help spearhead its new direction. Zuelch, vice president of sales, is strengthening the sales team, growing sales and developing strategic partnerships to insure that Mountain West Telecom provides effective, best-in-class products and service. Beveridge, vice president of operations, is building an operations team to support the sales effort and meet the evolving service requirements of today's businesses. "We're strengthening communications," explained Beveridge. "From Web-based service requests to simply making sure all technicians are available by cell phone, we're focused on making our customers' experiences with us even better." The company plans to add between 10 to 15 employees over the next year, as well as emphasize certification training.

For more information about Mountain West Telecom's new product line and enhanced services, visit the company's new Web site at www.mtnwesttelecom.com.

Locally-owned and operated, Mountain West Telecom provides a full range of telecommunication, data and voice network products and services to businesses in several western states, including Utah, Wyoming, Idaho and Nevada. The company also has installed and manages a number of national accounts.