Imagine there’s no phone bill,
It’s easy if you try,
No Telus or Bell below us,
Free calls in the sky.
That song may not top the charts, but a growing number of savvy business and residential phone customers are moving their phone business to the Internet, using an emerging technology called Voice Over IP (VOIP).
It promises cheaper, even free communication anywhere on the planet, as well as a host of new features.
My own serious entry into VOIP, after some half-hearted tinkering, came when a Danish student who used to live with us send me an instant message. “Hey, let’s talk. I’ll call you now,” he said.
“You can’t afford that,” I messaged back, and offered to call him. “No,” he explained patiently, as if talking to a person over the age of 20, “it’s free. You just download Skype from the Internet.”
Sure enough, five minutes later, Christian’s voice was coming out my computer speakers and I was talking to him through the microphone. It shocked me because he literally sounded like he was in the same room. Of course there were a few glitches in the audio but, hey, this was a free phone call between Denmark and Canada.
I immediately called somebody else in Europe just to make sure this wasn’t some sort of a trick. Free voice call services like Skype, and the new version of Microsoft Instant Messenger, can do a lot for the parents of teenagers. You do have to complete a free registration, and both parties have to be sitting in front of their computers, but, hey, where are the kids today anyway?
This is going to be the year that business takes VOIP very, very seriously. Proof can be found in the recent announcement by Bell CEO Michael Sabia that his company will move all its traffic, including voice calls, to the Internet within three years. The company has signed a three-year, $200-million deal with Cisco Systems Inc. to buy the gear for this.
If done right, you should see no decline in call quality, and enjoy new features like being able to go to a webpage while you’re on vacation to see who’s been desperately trying to reach you.
Of course, the large incumbent telcos would love to just keep charging you the way they always do, while lapping up the cost savings of VOIP. It looks like that is not going to happen. Upstart challenger Vonage in the U.S. has already recruited tens of thousands of customers to its voice over IP service. Now, Primus is making a major push in Canada with its TalkBroadband service.
The Primus offering relies on your already-existing high speed Internet connection (you do have cable or DSL, right? If not, it may be time to put the dial-up modem in the museum.)
You attach your phone to your high speed Internet with a special adapter, and, voila, all your incoming and outgoing calls run over the Internet.
Primus is pricing its basic service, which can do most of what your current phone does, at $19.95. For $20 a month more, you’ll get unlimited North America-wide long distance.
You can choose your current number or a “virtual phone number” in many area codes.
Now, you can have that office in Toronto you’ve always craved, without the expense. And when you’re travelling, as long as you have the adapter and a phone, people can call you as if you were sitting right at home.
There are a few drawbacks, like no operator service or 911 for emergencies. Because of that particular drawback, which is being working on, Primus expects that a lot of the uptake of its TalkBroadband product will be people looking for second phone lines to relieve congestion around the house or small business office.
The big telcos are in the same bind that Air Canada faces with WestJet. With lower costs, and simpler (largely no) regulation, the little guys can offer all kinds of features and great deals.
With a higher cost base, the Telus and Bells of the world would almost certainly lose money with a big push into IP because, at least in the short term, they’d be cannibalizing their existing long distance revenues. Their only hope is that IP telephony will bring them whole new revenue streams.
Just what might those be? Imagine a service that monitors your house, phoning you if something goes wrong like the furnace quitting. Or one that sends you video clips if an intruder enters your property. Because people know and trust their incumbent telcos, they might be more willing to buy important services like these from them. Of course, anything that the Internet bringeth, it can taketh away, and there’s no reason why security firms like ADT won’t also jump on this bandwagon, with or without the telcos.
Governments are also trying to hitch their horses, or maybe it’s their plows, to the VOIP bandwagon, especially if there’s a way to tax it.
Right now the Internet is a sort of “no man’s land” in terms of taxation and regulation, but you can bet that if a critical mass of homes and businesses turn to VOIP as their primary service, governments will have royal commissions and inquiries. That debate is already happening in the U.S., fuelled by the entry of giants like AT&T into VOIP.
Now, if you’re worried that all this traffic might overwhelm the Internet, you can probably relax. First of all, Bell engineers have calculated that we’re only using a small percentage of the theoretical capacity of existing fibre-optic cables.
And when biggies like AT&T get into the game, they don’t usually rely on the same creaky Internet backbone you and I might use. Instead, they build their own private networks.
So a few trillion voice calls probably will not take down the global Internet. But if we all start making high resolution video calls to Grandma, that might be a different story.
Web watch:
www.skype.com
www.msn.com
www.vonage.com
www.primus.ca
(Tom Keenan is a professor at the University of Calgary and an expert on technology and its social implications. He can be reached at keenan@businessedge.ca)
