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Last Updated: Nov 2nd, 2009 - 17:32:57 |
VoIP Advantage: The Cost Factor
Lower cost is the most compelling reason to switch to VOIP service.
VOIP is cheaper than traditional phone services because Internet phone service is free of government regulation, allowing companies that sell VOIP to provide a menu of features, such as caller ID and voice mail, at no extra cost.
Another reason for VOIP's projected rise in popularity is an evolution in the telecommunications industry, leading to phone companies and cable companies vying to become the be-all, end-all for consumers.
Phone and cable companies are positioning themselves to provide consumers with one-stop shopping. This already is evident in the Rochester market, where Time Warner Cable has begun offering its digital phone service, and the phone company, Frontier Communications Inc., has entered the television arena by partnering this past April with the Dish Network. Both firms also provide high-speed Internet service. It's going to take many years before it settles down, but we're getting toward the time where 80 percent of the customers (nationally) are going to be using all three services from either the cable company or the telephone company.
This sea change in the telecom universe means VOIP likely will become the dominant phone service in the country, since it will be blended on the same network with Internet and TV service, resulting in lower costs and more services for consumers.
VOIP is a veritable baby in the telecom world, having started in the '90s "with two people sitting at their computers at home giggling because they were beating the system". They were using a microphone on their computer, a speaker on their computer.
Today, advances in technology have allowed companies to add frills to VOIP offerings. Time Warner became the second division nationwide to begin offering caller ID on the television screen as part of its menu of free VOIP features, in addition to other services like voice mail, call forwarding and enhanced 911. Time Warner's VOIP service costs from $39.95 to $49.95, depending on whether the phone service is combined with other Time Warner products. As with other VOIP services, the cost includes unlimited local and long-distance calls.
To further cement the fact that VOIP is less expensive than traditional phone services, Time Warner points to the Federal Communication Commission's 2005 report on telephone rates that shows consumers pay approximately $79 per month for traditional phone services-which means Time Warner digital phone customers can save nearly $40 a month and almost $500 annually.
Rates at other providers include Vonage's $14.99-per-month charge for limited minutes for residential customers and its $49.99 fee for unlimited calls for businesses.
Verizon Communications Inc.'s VOIP service ranges from $19.95 a month for limited minutes to $34.95 for unlimited use. The firm does not offer VOIP service in Monroe County but does offer it in surrounding counties. The company does not disclose customer figures.
As broadband becomes more and more ubiquitous across the country, VOIP is becoming more popular.
Frontier is looking to launch a commercial VOIP product in the first half of 2006 and currently is testing its model with a company in New York State. It is in talks with a Rochester based company to do a second test. Frontier eventually hopes to offer residential VOIP service. But for now, the company is focusing on rolling out a commercial product, realizing the emerging popularity of VOIP, especially now with major Internet-based companies like eBay Inc. and Google Inc. in the VOIP game.
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