VoIP Gateways

Sometimes the way to know how strong VoIPs long-term health prospects are is to see whats being said outside of our VoIP echo chamber.

Turning, then to The Capital Times, Wisconsins Progressive Newspaper, theres a lengthy Associated Press article about how Suneet Tuli, chief executive of DataWind Inc., a Montreal company that makes handheld Internet-browsing devices used to leave behind a long list of numbers where he could be reached and told important clients to ring him on his cell phone. The routine was cumbersome and cost him about $800 a month in phone bills.

Now, the AP writes, he has local numbers for New York, London and Mexico City despite no permanent presence in any of those cities. The lines automatically forward to another number that seamlessly transfers to a cell phone with the best rates for wherever he happens to be.

Thats right, its VoIP: Because Tuli's calls are routed mainly over the Internet instead of the traditional voice network, he can make changes to the elaborate setup simply by visiting a Web site. And he's cut his phone bill by about 80 percent.

After a decade of promises about how it would forever change communications, Voice over Internet Protocol, or VoIP, is finally beginning to nudge the 130-year-old traditional phone network toward obsolescence, the article says.

Yet the fact that Voice over Internet relies on data networks is both its greatest strength and biggest liability, the article says: Because it piggybacks on top of existing services, companies offering it need not dig up streets, roll trucks to homes or pay the same amount of regulatory fees as traditional telcos.

Heres how the article characterizes the current state of the VoIP industry:

VoIP's amazing features and low costs come paired with questions of reliability and regulation that the industry and government are only beginning to address. And you need a broadband Internet connection, which is far from ubiquitous though more than half of U.S. households that go online now have one.

Mainly marketed as a supplement or replacement for traditional phones, VoIP is already used by millions worldwide, most of them in Japan. In the United States, the numbers are expected to grow from about 3 million today to some 27 million by 2008, according to the research firm IDC.

Vonage Holdings Corp., Tuli's VoIP provider, now serves more than 600,000 customers, adding 200,000 so far this year. And Skype, a European-based phenomenon that offers free PC-to-PC calling, says more than 2 million people use its service at any moment.

In just six months, Cisco Systems Inc.'s Linksys sold 1 million Internet phone kits that turn broadband connections into Internet phone jacks - a pace that beat the past launches of home routers and Wi-Fi devices.

VoIP startups with names like BroadVoice, SunRocket and VoicePulse now number in the dozens, joining market leader Vonage. Cable companies and traditional telephone companies are also scrambling for your VoIP business. Even standalone Internet providers such as America Online Inc. are jumping into the game.

In Voice over Internet's early days, hobbyists with microphones plugged into their PCs used to gab with other geeks. Reliability was shaky, call quality even worse.

The article notes that whether there's a broad public appetite for this newfangled phonery remains unclear. Are current VoIP offerings attractive enough for people to want to unplug their reliable traditional phones for generally cheaper but more unreliable Internet telephones? A lot more convenience can be built into the technology.

But reliability is a major issue for some who have switched. Because the calls ride over broadband connections, the phone is only as reliable as that service. And Internet phone companies have had their share of service outages.

It tells of Ed Ho, a Palo Alto, Calif., entrepreneur who subscribed to Vonage to save on long-distance costs for his start-up, ended up canceling the service because even occasional unreliability was unacceptable. He returned to his old phone company.

According to a 2004 Forrester Research survey, only 37 percent of VoIP subscribers canceled their traditional service. Sixty-three percent said they retained the line for either personal or business use.

The article concludes that the industry could do a better job of communicating why the average person should care. A Forrester survey of 6,200 people in North America found 78 percent didn't know about VoIP even after it had been defined for them.

David Sims is contributing editor and CRM Alert columnist for TMCnet.

To discover how contact centers can save money and increase productivity by making the switch to IP Telephony, be sure to attend TMC's IP Contact Center Summit May 24-26, 2005, in Dallas, Texas. IP Contact Center Summit is co-located with the Speech-World conference, where you can get expert guidance in the deployment of speech technologies to strengthen customer relationships.