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Net
phones and wireless
The
interesting aspect of the race towards VoIP is that cable
and Internet companies are also jumping the fray along with
the telcos. MOHAN
BABU says that who wins in the long-run is
anybody’s guess
As
telecommunications companies in the US emerge from the long
slump, which included the bankruptcy of the giant Telco MCI
(formerly Worldcom), they are faced with yet another paradigm
shift—the move of voice calls onto the Internet. Voice over
Internet Protocol or VoIP, has the potential to shake up the
industry further by slashing costs and offering new features
that the ‘Plain old Telephone System’ (POTS) can’t offer.
This trend has not gone unnoticed by business leaders; in
a recent article in the Wall Street Journal, titled ‘Telcos
Embrace Internet Calling, But Is It Trouble?’ the author intones:
“A mythical lode of software applications—called “the next
Napsters” —is expected to save the world’s biggest telecommunications
companies from ruin. Whether the likes of AT&T and Quest
Communications International can come up with them will be
one of the great business stories of the next decade.
The
interesting aspect of this race towards VoIP is that cable
and Internet companies are also jumping the fray along with
telcos, and who wins in the long-run is anybody’s guess. In
the short run, however, the customer continues to be the king.
In the past, customers in the US had to jump through hoops
to choose the ‘best deals’ offered by local carriers and long-distance
companies.
A
residential customer would typically sign up with at least
two telcos—a local carrier—generally a spin-off of the former
ATT-Ma Bell like Qwest, Bell South, et al—and a long distance
carrier like ATT, Sprint, MCI, etc. Although the charges and
chargeback’s were transparent to the end consumer, each carrier
managing a ‘leg’ of a call would get a cut of the total charge
or fees which would eventually be borne by the consumer. In
effect, the customer was subsidising the inefficiency of the
telcos. Though this archaic billing process began to get streamlined
towards the end of the last decade, the ultimate choice of
having a cable company carry a voice call is proving to be
a boon to the customer. (See the attached table for some of
the indicative rates)
The
technology behind VoIP of digitising voice and transmitting
it in the form of ‘packets’ over the Internet or other networks
is not brand new and has been there for a while. However,
the technology to stream and provide ‘near phone like’ quality
is being ironed out. The advantage of VoIP is that it is much
cheaper than transmission over traditional phone lines. The
technology also makes it feasible to add a number of other
features, including using video phones, listening to voicemail
from the Internet, etc. The flip side is that the VoIP connections
are not totally reliable; and also not as reliable as voice
calls over traditional landlines. Cable companies that are
jumping into the fray by providing VoIP services concede that
challenges remain to be overcome.
Interestingly,
the low-cost push for VoIP is prompting telcos to slash prices
on traditional long-distance and local services too. For them
also the cost is coming down drastically because some of them
are able to leverage the benefits of VoIP over regular lines,
helping reduce infrastructural costs.
In
a recent Wall Street Journal article, Robert Allen, the former
AT&T CEO was quoted saying, “the companies that add the
most value as they handle transactions electronically from
end-to-end—collecting, processing and delivering information—will
be the leaders in the global information market of the 21st
century.” It goes without saying; the end consumer is eagerly
awaiting ubiquitous, cheap telephony, and thanks to VoIP,
this dream is closer than most people concede.
| Service |
Details |
User
base |
| Skype
www.skype.com |
P2P
calls are free, but you can only connect with other Skype-heads. |
1.2
million downloads |
| Net2Phone
www.net2phone.com |
Ring
any phone in the world with a pre-paid calling card. Long
distance costs as little as a penny per minute. |
Users:
110,000 |
| Free
World Dialup www.freeworlddialup.com |
Calls
are free to the US and UK, and very cheap worldwide. But
you can only talk to other VoIPsters. PC and headset required. |
72,000 |
| Vonage
www.vonage.com |
Reach
any conventional phone in the world using your existing
handset (free adapter required). The price: $35 a month. |
64,000 |
| SipPhone
www.sipphone.com |
Free
calls to anywhere once you buy the $80 handset. But you
can only call other IP phone fans. |
Users:
would not disclose |
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Source: Where To Get Connected (Wired magazine)
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