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VoIP Gains Popularity in the U.S. and Abroad
[January 16, 2006]

VoIP Gains Popularity in the U.S. and Abroad

TMCnet Associate Editor for Channels
The rapid growth in popularity of VoIP phone service is unlikely to slow anytime soon. Just in the corporate arena alone, VoIP phone lines are projected to grow from about 39 million to 532 million during the next four years, according to market research firm The Radicati Group.

And that doesn’t include home VoIP lines.

Cost is the primary driving force behind VoIP’s popularity. VoIP service is not subject to the taxes and fees that come with regular phone service, according to the FCC website. Also, long-distance charges are greatly reduced or eliminated because information can travel any distance for free over the Internet.
But money isn’t the only reason why consumers and businesses are making the switch to VoIP. The new generation of phone service offers features and functional advantages that are luring more and more people away from traditional phone service.
Portability is one factor. Relocating a VoIP phone line is much easier, and cheaper, than moving a traditional phone line, said Peter Karlson, founder of tech consulting company NeuEon, in a recent Thomas Dialog NewsEdge article.
Also, the phone number associated with a VoIP line can move anywhere where there’s a broadband connection, and can be assigned any area code regardless of geography.
Value-added features such as call waiting, voice mail, caller ID, call blocking, and online access to voice mail and call records typically are much cheaper with a VoIP line than a traditional one.
The cost-savings of using VoIP are making the new type of telephony popular, even though there are still wrinkles to be ironed out. For example, sound quality can be a problem with VoIP calling.
Another issue, mostly now resolved, is emergency 911 dialing; since VoIP lines are not tied to a particular geographic location, emergency services may not be able to determine where a 911 call originated.
A bigger problem with VoIP is that it does not work during power outages. VoIP requires routers and other devices that need electricity to operate. Battery power can be used during short outages, but day-long losses of power are still a problem.
Despite its problems, VoIP service has emerged as the next generation of telephony in the U.S. and around the world. Outside the U.S., one example of a place where VoIP is taking off is Taiwan.
In a recent Thomson Dialog NewsEdge article, a Taiwanese professor named Mao Chi-Kuo—who teaches at National Chiao Tung University—described the benefits of VoIP service for Taiwanese consumers and businesses.
According to Kao, many Taiwanese consumers have switched to VoIP because of cost savings; they now can place calls to the U.S. for about NT$0.32 per minute, a significant savings over Chunghwa Telecom’s rate of between NT$1.5 and NT$5.6.
Kao said that leading telecommunications operators British Telecom and NTT of Japan are aggressively promoting their VoIP services in an effort to transition completely to Internet-based telephony by 2010.
Responding to this trend, some Taiwanese fixed-line operators are launching their own VoIP services in order to stay competitive. For example, Taiwan Fixed Network recently launched Packet Phone—a service aimed at those who frequently make land-to-mobile calls.
Packet Phone rates range from NT$3.5 to NT$4 per minute; better than traditional phone service, but still not quite as good as the rates offered by more established VoIP providers.
Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page.

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