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VoIP Internet Phone Services Grow

Aug 17, 2007
The new technology surrounding Voice over Internet phone plans (VoIP Phones) and all the different ways they can deployed in home and office environments, makes VoIP confusing to a lot of people. For home users and cell phone customers, it is very simple to use and no knowledge of VoIP technology is needed. Yet, VoIP usage is still not at the level many industry experts thought it should be. The VoIP consumer marketplace is competitive with phone companies and VoIP providers battling for the consumer's minds and wallets. As long as consumers are content and don't understand VoIP service and its value, the big phone companies can keep charging excessively high phone call rates and providing fewer services.

Many consumers still lack the information about VoIP phones and Internet phone service plans they need to make a shift to VoIP. Many will wait until there is a critical mass effect. That's when a large number of people will shift to VoIP and when VoIP lingo is a common part of people's vocabulary. Since VoIP operates seamlessly with current phone systems, it's not a technology that jumps out at people.

Not long ago Google was an obscure web search engine that had little consumer usage. But then Google started to make noise, and it did so with the help of students and web marketers who believed it had something to offer. Now, the word Google is used as a verb and people wonder how they ever got along with its info finding magic. VoIP is starting the same way but still hasn't found a way to move into mainstream consumer lifestyles. Rest assured though, that VoIP companies are targeting a variety of consumer demographic groups such as teens with cell phones, migrating people to Europe and North America who want to stay in close contact with their relatives back home, and businesses with multiple distant office locations who need inter-office phone communications. For regular home phone users, the value proposition they're receiving is not as compelling. That will change too as VoIP companies research ways to make that home phone service more valuable to consumers, or to make it unnecessary to keep it.

That critical mass event happens when users believe they have a clear cost savings advantage to make the switch from using their regular telephone service to a VoIP phone service. Being able to dump the home phone would certainly provide a reduction in monthly bills, but consumers aren't dropping their expensive land lines, even though they may have cable television and cell phone bills to boot. In telecommunications, it seems consumers are over-serviced, and a solution is needed. Internet telephony has that potential to eliminate some of the redundant services, but it hasn't matured to the point where it can shape the phone services market by itself.

Phone companies in defending themselves, put a fair amount of effort into discussing the possible downside of VoIP and some have even put restrictions on VoIP transmissions to try to thwart VoIP service providers. Old stories of lost calls, garbled voice quality, non functional 911 assistance, and loss of privacy don't carry much weight anymore though. Quality and technical issues are almost all resolved and the services continue to improve. So, if it's not technical issues that are preventing widespread VoIP adoption, then what is the problem?

Need to Drop the Land Line

Many consumers won't adopt a VoIP service until they can drop their current phone company land line completely. Despite the desire to do so, many appear to be resisting eliminating their dependence on the old lines. Most don't want to be paying for two phone services at the same time, yet they do. A billion people on the planet have cell phones now, so that means there are a lot of phone lines that aren't necessary, or that are too expensive given the value they offer. As long as phone companies can make customer's land lines indispensable, or encourage them to stay put, they know their customers won't switch to VoIP plans. So that leaves many consumers with more than one phone, a home phone and a mobile phone, and it's costing them a lot of money.

For those who don't make frequent long distance phone calls, the cost savings from VoIP service plans aren't compelling enough. However, when you add the cost of the call and line features that phone companies add onto the monthly phone bill, the scenario changes. Call features such as caller ID, call blocking, call waiting, and voice mail, are free with VoIP plans. If these aren't enough to entice consumers, VoIP companies will certainly look to sweeten the offer. Internet protocol communications are improving all the time and there will be more to offer the consumer such as; services via PDA's, Blackberries, and IP hard phones connected to WiFi and WiMax services.

Internet Phoning Drawbacks

When VoIP users make a call to another VoIP user, the call is essentially free. However, not everyone has a VoIP-based phone to receive VoIP calls. Many only have their land line or in some cases, a cell phone. That means the call has to go from the Internet into the PSTN or public switched phone system in the destination state or country. This is where the cost of a call shows up. Usually the cost is low for terminating the call to the end user. If the caller is making a long distance call however, this nominal cost is a small sacrifice compared to what they'll be paying on their traditional home phone service.

High speed DSL customers must have their basic phone service, so as long as they need the high speed Internet connection, they might not switch to VoIP. For cable subscribers, a land line is not needed and VoIP works very well with Cable Internet service. For cable subscribers, the land-based home phone really isn't needed so the jump to VoIP should be an easy one for cable subscribers. If they aren't making the leap to VoIP, it might indicate a lack of confidence in cable networks. Most people still have trouble comprehending that a voice telephone call can go through the cable company, or that it will be reliable. Cable companies have come a long way with their technology and networks and are more than capable of providing top notch phone services.

With better education of telecommunications consumers and the presentation of a solid value proposition that offers more than a little cost savings, VoIP will grow steadily. For those with international calling needs, VoIP is already the solution they're looking for. For small businesses with lots of long distance calling, the savings are even more pronounced. What's needed is more consumer education. With that, many will finally wean themselves from their dependence on that old analog-based land line telephone and launch into an era of cheap digital phone calls. That day is coming soon as the major phone companies are under increasing pressure to raise the price of local phone service in the face of a major shift to VoIP transmission. Critical mass will occur when price plus features create a force that overcomes consumer's inertia.
About the Author
RNK Telecom is a privately held phone company offering wholesale and
residential telecommunications services including VOIP Services. They market ReVoS, an Internet telephony product which offers superior International Calling.
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