By Erika D. Smith
erika.smith@indystar.com
So you heard you can make long-distance phone calls for pennies
instead of dollars. And you heard it has to do with something called
VoIP.
You're right.
VoIP, or voice-over Internet Protocol, is a technology that routes
calls over the Internet for a fraction of what you're paying now. All
you need is a high-speed Web connection.
But now there's a way to make those same calls for free. It's called
VoIM, or voice-over instant messaging.
Companies including Skype, Google, Yahoo!, AOL, ICQ and MSN offer this
computer-to-computer calling as part of their instant messaging
programs. Subscribers log on to their chosen program, and have a
conversation with others using the same program. Users will need a
microphone for their computer, speakers and sometimes a Webcam.
VoIM is really a spinoff of traditional VoIP, which works a bit
differently.
VoIP subscribers use their own high-speed modem, plus an adapter to
route calls over the Internet. Any regular telephone will work with
VoIP, and Vonage is the most popular provider.
In general, traditional VoIP and VoIM are similar only in that both
break voice calls into data packets and route them over the Internet.
The method is much cheaper than the traditional circuit-switched phone
system. And the prices for voice-over services reflect that.
Consumers are responding.
For now, the United States has 2.5 million to 4 million VoIP
subscribers. Some say that number will grow to 17 million by 2008. At
the same time, the number of traditional phone lines, now about 120
million households, is declining rapidly.
"I think the biggest driver of this technology right now is price,"
said Joe Porus, vice president and chief architect for technology
research practice at Harris Interactive. "On the flip side, it's a
hard sell to the masses. This is not your father's telephone."
Still, the voice-over industry has gotten really crowded, really
fast. This is especially true for VoIM.
Last month, Google Inc. rolled out a new instant messaging program
with voice service. It's designed to compete with similar services
from Yahoo! and MSN. Also, Microsoft Corp. acquired Teleo Inc., a
startup that makes software specializing in Web calls.
And then there's Skype, which eBay Inc. agreed to buy on Monday
for $2.6 billion.
Skype already has more than 50 million registered users worldwide,
including more than 2 million who pay for its premium services, such
as voice mail. In 2004, the company generated about $7 million in
revenue. It's projecting $60 million this year.
Plainfield-based Brightpoint Inc. was confident about Skype's
prospects even before eBay got involved. The company became a
distributor of Skype software and products in August.
"Their success has been incredible," said Brightpoint's chairman
and CEO, Robert Laikin.
The question is whether that success will continue now that
consumers have alternatives, such as Google Talk.
Skype, which is the market leader, says most of its subscribers are
business users. Other instant messaging programs are targeted to the
masses.
That may be an advantage since about twice as many business users know
what VoIP is than consumers, according to a Harris Interactive poll.
"People who are on Skype right now, will stay on Skype," Laikin
said. "Once you have your community, in my opinion, you're not going
to go to a Yahoo! or AOL and start an account."
But that can work both ways.
Yahoo! and others already have about 867 million subscribers,
according to research firm The Radicati Group. That's expected to hit
1.2 billion by 2009.
"I think the advantage that Google and AOL have is that they already
have a user base," said Jan Dawson, research director of the telecom
research firm Ovum. "Not only am I a user, but my friends and family
are all on the same IM platform. If I start introducing voice to that,
I don't have to convince all of them to sign up."
The other hurdle that VoIM faces, regardless if it's Skype or Yahoo!,
is the technology isn't exactly user-friendly.
Users are more or less tied to their computers. It's not like
picking up the phone on your desk.
That's where Vonage, AT&T and other companies that offer traditional
VoIP have an edge.
"For all the new-fangled things people like to talk about, the phone
has been the phone for 100 years now," said Joe Laszlo, a senior
analyst for Jupiter Research.
That's why Brightpoint has contracts to distribute Vonage and Skype
products, Laikin said.
People will use each type of technology for a different purpose,
analysts say.
VoIM, they say, will evolve as a compliment to traditional VoIP, not a
substitute -- no matter the price.
"For the foreseeable future, the more a VoIP service resembles a
traditional phone service, the more successful it will be," Dawson said.
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Erika D. Smith (newswire@telecom-digest.org)