Voice Over Internet Protocol

The future of the telephone industry is under a threat because of what VoIP had introduced into the market place. The introduction had made making phone calls very cheap when compared with what customers are getting using the Public Switch Telephone Network (PSTN). There are even cases where phone calls can be made for free, not only in a given locality but nation wide, from one state to the other, and globally.

What this means is, in the near future, phone companies will cease charging their customers for voice telephone service as everyone will be able to make a phone call from a PC. It takes only installing software that are being offered by various sources, free in some cases, and a mike and an earphone to empower a PC to do the whole job. Alternatively, it is possible to use an analog adapter by plugging a conventional telephone into it or what are known as IP phones that are directly connected to a router could also be used to avail the service. The IP phone comes with a software and the equipment is capable of making telephone calls. It is not only that VoIP is offering a very low-cost telephone service.

VoIP service had been possible because of the capability that came into existence when converting analog into a digital form was possible. The converted digital analog could be changed into a package that could be send through an Internet connection and it will be received by another converter at the other end that will convert it back into analog, the final form that will reach the receiver at the other end.

The key here is both the VoIP and the traditional phones are using some sort of mechanism to transport the analog from one point to the other, and both of them change it into a digital format, then it is sent in a big bundle with other similar calls making the procedure cost effective. In the VoIP case, what is required is a high speed Internet connection that is available through telephone lines or cable that users are paying for to have access to the Internet. However, charging for the duration both ends stayed on the line conversing was the way the telephone companies were making money. Now that has become irrelevant, at least ,with one version of VoIP, when, for example, the call is between two PCs, because people can leave the service on the whole day, and can talk as many times as they want, yet it does not cost any money.

That cost also had been eliminated in some cases with conventional calling, where there are companies that provide free software to make free phone calls, and these companies make money from advertising. Those who are charging money, because they do not have any overhead, they can lower their price to a level that will make the traditional telephone companies unprofitable.

The outcome, according to some reports, has startled telephone companies, because their very existence is threatened. The number of people who are using their PC to avail a telephone service is on the rise and by the year 2006 it is could reach five million. Still a miniscule number, yet, the number of people that are converting to VoIP is 150,000 people a day around the world, a figure for one company alone, which has more than 50 million subscribers globally, known as Skype that was recently bought by eBay for $2.6 billion dollars.

Ebay has stated that it is planning to use the company’s software to enhance its auction business, where every auctioneer will have the icon of the system on their desktop. And while buying and selling, if there is a need to dialog, it is just a matter of clicking on the icon, and the two dealers can start conversing about what they are selling and buying, with no cost at all.

Moreover, the other touted use the Skype software is supposed to deliver is that these same icons could be placed on Web pages and if surfers click on them to talk, for example with a sales representative, the company will pay both companies a fee for what is dubbed as “pay-per-call”. And it is going to be a copycat of what the other search engines like Google and Yahoo have made a lot of money on, the text version “pay-per-click” advertising. And major technology companies that include Microsoft, Google, Yahoo, AOL, and more have availed similar service to their customers free of charge, where users can strike conversation like a live text chat by simply clicking on a button after downloading the software each company provides, to a desk top.

Even if VoIP’s growth is anticipated to be phenomenal, for now it has few setbacks like for example it is not possible to access 911 or 411 service because VoIP uses IP-addressed telephone numbers, which makes it difficult to pinpoint the geographical origin of the call from the IP address of the caller. This results in making it difficult where to direct the emergency calls, however, including geographical location in the call package is in the making. Otherwise, the providers cannot continue to give service, because emergency calls are vital services that no one should go without, and the government had intervened very recently where the providers are working to comply with the requirement.

In a time of an emergency, when there is a power failure for any reason, telephone lines are always on, and could be used to make any emergency call. However, the fact that the Internet, for the most part, is still fully dependent on AC power makes it vulnerable to outages at a time of needs, even if power substitutes are available. And the vulnerable nature of the PC itself, where it is susceptible to be hacked or attacked by virus, making it inoperable frequently also puts a measurable damper on its being a better choice, because the PMST, more or less, is stable and immune from these kinds of problems.

Nevertheless, in spite of the setbacks, the two great attractions of VoIP, for the time being, remain to be price and flexibility, especially when the long distance call is tabulated, which is said to be cheap in comparison to the traditional telephone companies, that is when it is not free.

The flexibility issue enables users to take their telephones anywhere where there is a broadband connection and it is like accessing an email from anywhere there is a connection. Or having the various software available at one’s disposal on a laptop will even make things better accommodating as all that is required is a mike and an earphone to plug into the laptop to receive and make phone calls for example. If the call is from one PC to another, it is free, but charge applies if the call involves another conventional telephone.

Consequently, what all these will mean for the telephone companies is those who are dependent on voice only for their revenue will be hard hit. And some of them will have no better choice other than embracing the new technology and keep their customer base, because even if they start charging less than the conventional service, their overhead will also come down at the same time. The end result will be having some kind of business instead of losing the customer base for newcomers like Skype and many others VoIP service providers whose number could reach to 1,100. On the other hand, in the future, it is possible that there will not be charge for a voice telephone call, instead the various companies might have to bundle it with other services.

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