In 2004 the terms VoIP, internet phone service and IP phone were foreign to almost everyone except technology professionals and geeky computer types. Now most people I talk with are at least slightly familiar with these terms, as the internet phone service market is now starting to take off. Contrary to what many people believe, VoIP is not a new technology. It was introduced to the public in 1995, by a company called Vocaltec. By using internet phone software, registered users could make phone calls via their computer using a dialup internet connection. I made my first internet phone call in 2000 using my computer, a headset, a dialup internet connection and a free account with Net2Phone. The sound quality was terrible, but it was an absolutely fascinating experience to be making a free long distance call over my computer. Now in 2005, ten years after the first commercial use of VoIP, the technology is finally ready for prime time!

Significant improvements have been made with VoIP in the past five years, and communications companies have started investing heavily in the technology. The quality and reliability of service has improved so much within the past year or so that VoIP is now suitable and reliable enough for everyday residential and business use. In fact, so much attention is now being given to the continued improvement of VoIP technology that its well on its way to becoming the PREFERRED method of communication by home users and businesses alike.

There were around 1.5 million internet phone users in the USA in 2004, and around 2.1 million today according to Telecommunications Industry News. According to various statistics Ive seen, the number of VoIP users in the United States is projected to be around 17 to 18 million between 2008 and 2010. This in an increase of over 1000% within the next 3 to 5 years! Experts also estimate that by 2007, 75% of long distance calls worldwide will be made via the internet. The US is currently not the biggest user of VoIP technology - there are about 7 million users in Japan out of approximately 12 million worldwide today. The internet phone industry is booming, and will continue to grow over the next decade. It seems that everyone including EBay wants in on the exploding VoIP market now, as evidenced by their purchase of VoIP provider Skype in September 2005.

More people are showing interest in obtaining Internet Phone Service because they are starting to hear more about it. This is due in part to more converted users raving about the amount of money they are saving and the great features they get for free (I love my VoIP service so much I wrote a website about it!). A greater awareness has also come from increased advertising efforts by major cable and communications companies. Many cable television and phone service companies (like Verizon) have been pouring money into VoIP technology in order to capture some of this new market share.

In an effort to hold on to their customers, many regular PSTN (public switched telephone network) phone companies are now offering unlimited long distance calling for a flat monthly fee of around $39 per month. Current subscribers are starting to cancel their traditional phone service as they are convinced that VoIP is a better option. Not only is VoIP cheaper (under $25 a month for unlimited calling), but most Internet Phone providers throw in all of the optional features for free. Phone companies charge extra for services like voicemail, caller id and call waiting. I think phone companies have missed the boat when it comes to competing with VoIP, but thats a topic for another article

With all of the telephone service options now available, it is becoming difficult for consumers to choose the right provider for their needs:

Should you subscribe with a true VoIP service service provider (like Vonage, Packet8, SunRocket, Voip.net, etc), or should you choose the phone service that your cable company provides? If you compare VoIP provider rates with those of the cable company, pure VoIP providers are clearly the winner. Cable companies do provide free installation, but VoIP is really very simple to install. Many cable companies offer discount through package deals, but its always smart to compare total cost and included features with VoIP providers before making a decision.

Should you switch to VoIP and get rid of your landline phone, or keep what youve got and pay for unlimited long distance calling? If you dont use the internet, keep your landline phone and forget about VoIP for now. To get the most bang for your buck out of VoIP service, you need to have cable internet service. This eliminates the need for a phone line and dial tone that you have to pay the phone company for. To use VoIP in the most cost effective way, calls should go through your cable broadband connection this eliminates the need for standard phone service. VoIP does not work well over dial up internet; you really need broadband in order to get the best audio quality.

Depending on your long distance calling habits, VoIP internet phone service can save you between 20% - 80% per year vs. traditional PSTN phone service. The technology is mature now and the quality of service is great (and getting better all the time). Its hard to beat unlimited local and long distance calling for less than $25 per month, plus you get free voicemail, caller id, call waiting, call return, and all the other features youre used to paying extra for.

VoIP is definitely here to stay, and cost savings is only one of the many benefits it offers. Internet phones will change the way the world communicates. Its now possible to live in another country and have a US phone number, you can have several virtual phone numbers in different states or travel the world and bring your home phone with you. Its an exciting time in the world of communications are you ready to switch to VoIP?

(c) Copyright 2005, Debbie Jacobsen. All rights reserved.