Widespread use of voice over IP (finally)

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Voice over IP has the potential to replace e-mail as the current killer application of the internet. Its widespread use (thanks to new voice over IP software) is a driving force as it will increase overall internet use and penetration.

IP Telephony makes it possible to have a telephone conversation over the Internet or a dedicated Internet Protocol (IP) network instead of dedicated voice transmission lines. This allows the elimination of circuit switching and the associated waste of bandwidth. Instead, packet switching is used, where IP packets with voice data are sent over the network only when data needs to be sent, i.e. when a caller is talking. Its advantages over traditional telephony include:

  • lower costs per call, especially for long-distance calls.
  • lower infrastructure costs: once IP infrastructure is installed, no or little additional telephony infrastructure is needed.
  • future proof as functionality is software (protocol) based and does not require hardware replacement

IP Telephony is not new (even for private consumers). What is new is that users are now actually able to use these services with a decent sound quality and at local calling costs (when calling from a computer to a regular fixed or mobile line) or for free when calling computer to computer.


It's free! (sort of, computer to computer is free, but when is not free is very cheap)

According to telecom researcher Telegeography, carriers using IP handled only 150 million minutes of international telephone calls in 1998. That's less than 0.2% of total minutes. That number soared to 18 billion or 11% of the international total by 2002. Telegeography expects the tally to increase to 24.5 billion, or 12.8% of the total, by 2003. Two of the largest voice-over-IP (VoIP) carriers, IXTC and iBasis (which has a deal with Skype), handled 2.5 billion minutes in international traffic in 2002, placing them in the ranks of the largest international telecom carriers in the world in terms of call volume.