VOIP - Voice Over Internet Protocol

Care to call home from across the world FREE? VOIP might do the trick!

The basic idea is simple: turn voice into a stream of bits, just like email, and send it on the Internet rather than the telephone company’s lines.

Very soon, Voice Over Internet Protocol will end up being so small a part of the data stream that it alone will not be worth metering. With your existing internet access, making telephone calls costs nothing, once you’ve invested in a bit of extra hardware.

Software is made available by none other than the makers of KaZaA and this time again they are sure to shake the existing industry, this time, your local telephone provider, to the core.

"The future of telephony is free worldwide telephone calling", they claim.

With Skype software on your computer, plus a headset, microphone and high-speed Internet connection, you can dial one another anywhere in the world at no cost.

A growing number of firms now sell Internet telephone handsets-devices that look like telephone handsets but plug into your broadband-connected computer and let you dial, for free, anyone else who owns a similar handset.

But there are some hitches in Internet telephony. The first, and least troublesome, is the sound quality. But with the improvement in technology, it’s already improving dramatically and soon, Internet telephony could actually sound better than the best quality available on current analog telephones.

Something like mp3s sounding better than music tapes.

More troublesome is how you connect to people who don’t have your brand of VOIP software. At present, you can’t do this for free. If you want to call someone’s regular telephone number, you’re going to have to use a for-pay Internet telephone service, like Net2Phone or Vonage. They’re cheaper than traditional telephone connections, but they’re never going to be free because they need to pay fees to the local phone companies in order to make the final connections.

Adding VOIP to the already intense competition from wireless carriers could mean that 2004 will launch a brutal price war between telephony providers, with only the strongest surviving. For the most part, those survivors will be the companies that already own their own networks.

In this war of costs, packages and plans, the customer will be the eventual winner.

While it may not be completely free, the way we’re billed for telephone calls will change dramatically in the next decade. We may see portals like MSN and Yahoo offering telephone service as part of an integrated communications package that also includes voicemail, email, fax, instant messaging and video-conferencing. The network and cable system operators could do this themselves and in the long run they’ll partner with companies who are already good at building and running this kind of consumer software.

In that new world, clever Web interfaces will let you convert your voicemail messages to email, or your emails to voice; you’ll be able to call-forward in a myriad of ways, or switch to video or hi-fi voice if you want, or even agree to hear some number of commercials every day to

lower your bill. You might even be paying a monthly fee for all the services wrapped together. Your phone bill will morph into a connectivity bill and that will be anything but free.