Internet Fax Glossary: History of voicemail services for small businesses, residences, and cellular services

Until 1988, telephone companies and the newly formed cellular phone companies were barred by law from offering voicemail to their subscribers. This was done by the FCC to protect the telephone answering businesses around the country. This prohibition continued with the decree which broke up AT&T in 1984. A subsequent ruling by Judge Harold H. Greene on March 7, 1988, reversed this barrier since voicemail offered by carriers was ultimately much more effective for consumers than answering service companies. Phone companies were allowed to offer voicemail as a service, but they were barred from designing or manufacturing the machines that could provide the service.
VMX’s large system was used by a few carriers (telephone companies), but severe reliability and cost issues prevented VMX from expansion to the carrier market. Octel already had very high capacity systems for corporate use and by 1988 all seven Regional Bell Operating companies were using Octel for internal use. Octel first adapted its largest system for the carriers, which enabled them to offer reliable voicemail to their subscribers. Within a year, Octel launched a new generation of its large system specifically designed for carriers which was compliant with “NEBS standards,” the tight standard required by phone companies for any equipment located in their central offices. A few other manufacturers entered the voicemail market for carriers including Unisys, Boston Technology (founded by Greg Carr and Scott Jones), and Comverse Technology (an Israeli based company founded by Kobi Alexander). These vendors did not offer voicemail to corporations but they focused on the potentially large and lucrative carrier market. Unisys secured PacBell’s residential voicemail services, and Boston Technology was the mainstay of Bell Atlantic’s residential voicemail offering. None of the other corporate voicemail manufacturers had notable success with the carrier market because their systems’ capacities were too small and the equipment wasn’t reliable enough. Selling to carriers also required a different method of sales and marketing than selling to the corporate market, and only Octel succeeded at both.
Perhaps the first cellular carrier in North America to offer voicemail successfully to its subscribers was Bell Cellular, the Canadian carrier serving Ontario and Quebec (Bell Cellular later changed its name to Bell Mobility). Bell Cellular’s success with voicemail caught on, and cellular voicemail spread throughout Canada and then to the US and overseas. Within a few years, 100% of Canadian cellular companies ultimately used Octel voicemail, followed by virtually all of the major US wireless carriers (including the seven RBOCs, AT&T Wireless and McCaw) and a large percent of the GSM carriers around the world. Comverse Technology was very successful in the GSM market outside the US. The Octel user interface became the most common in the world with carriers, but each carrier made minor variations on the interface.
Other interesting markets developed from the carrier market including a concept called “virtual telephony.” Virtual Telephony, developed by Octel, used voicemail to provide phone service rapidly in emerging countries without wiring for telephones. The problem this solved was that emerging countries did not have many telephones. Wiring for telephones was very expensive, and many poorer citizens didn’t have homes to wire. The economies of emerging countries were held back partly because people couldn’t communicate beyond the area where they could walk or ride a bicycle. Giving them phones was one way to help their economies, but there wasn’t a practical way to do it. In some countries, the wait for a phone was several years and the cost was in the thousands of dollars. Cellular phones weren’t an option at the time because they were extremely expensive (thousands of dollars per handset) and the infrastructure to install cell sites was also costly.
With virtual telephony, each person could be given a phone number (just the number, not the phone) and a voice mailbox. The citizen would also be given a pager. If someone called the phone number, it never rang on an actual phone, but would be routed immediately to a central voicemail system. The voicemail system answered the call and the caller could leave a long, detailed message. As soon as the message was received, the voicemail system would trigger the citizen’s pager. When the page was received, the citizen would find a pay phone and call in to pick up the message. This concept was used successfully in South America and South Africa.

Consolidation
In the early ’80s there were over 30 companies vying for the corporate voicemail market including many companies no longer in business today. Among the many contenders were IBM, VMX, Wang, Octel, ROLM, AT&T, Northern Telecom, Delphi Communications, Voice and Data Systems, Opcom, Commterm, Genesis, Brook Trout, Glenayre, BBL, AVT, AVST, Digital Sound, Centigram, Voicemail International, and many others. Virtually all contenders in the corporate voicemail market were based in the United States.
By the mid 1990s, IBM and Wang exited the voicemail market because they couldn’t get enough traction. ROLM was purchased by IBM but was sold soon thereafter to Siemens. VMX suffered from poor product and ineffective management and was about to fold when Opcom merged with it. The surviving company was called VMX, but VMX was all but erased by Opcom except for its name and patent portfolio. In 1994, Octel bought VMX. AT&T created its version of voicemail for the corporate market (called Audix) but it would only work on AT&T PBXs. Nortel developed Meridian Mail and followed the same strategy as AT&T in that Meridian Mail only worked with Northern Telecom PBXs. As a result, neither company achieved much market share with large national or multi-national accounts (because few major companies, if any, used only one brand of PBX). AT&T spun off its equipment business into a company called Lucent Technologies, and Northern Telecom changed its name to Nortel. Several small companies offering voicemail folded because of inadequate product or management.
By the mid-1990s, Octel had become the number one supplier of voicemail both to corporations and to carriers. It had about a 60% market share in the U.S., Canada, Europe and Japan (for large corporations) and between a 30% and 100% of the carrier market, depending on the country. By 1997 Octel’s biggest competitors were Audix, made by Lucent, and Meridian Mail, made by Nortel. In July of 1997, Octel was purchased by Lucent Technology. Lucent’s AUDIX division was merged into Octel to form the Octel Messaging Division. In the same year, Boston Technology was acquired by Comverse Technology making it the second largest supplier to carriers after Octel. In a few years Comverse became the largest supplier to carriers with Lucent holding its leadership in the corporate market and second place with carriers. By 2000, some estimate that there were over 150,000,000 active users of corporate and carrier voicemail made by the Octel Messaging Division. Shortly thereafter, Lucent spun off its corporate business, including the Octel Messaging Division, into a company known as Avaya. Comverse today retains its leadership of voicemail systems sold to carriers around the world.