Behind VoIP's renaissance
Declared dead just a few years ago, voice over Internet Protocol (VoIP)--or the ability to make phone calls over the Internet--is back, bearing all the markings of a Next Big Thing.
Just a few weeks into 2004, signs of VoIP's quickening pulse are everywhere. Phone carriers are practically tripping over each other to announce aggressive VoIP strategies aimed at both consumers and businesses. Not to be outdone, Time Warner Cable, Cox Communications and Comcast have trumpeted their own forays into the VoIP market.
Comcast's decision alone, says Gerald Faulhaber, Wharton professor of business and public policy, is a clear signal that the resurrection is for real: "Comcast never does anything tricky but takes cautious and measured steps. That they are getting into this is a signal that the technology, which they will roll out slowly, is a big deal."
In its new incarnation, VoIP is not free, as it was back in the 1990s, but even so, its charms are undeniable: Unlimited local and long-distance calling, and voice mail and caller ID for as little as $20 a month.
Analysts like Daryl Schoolar, a senior analyst at In-Stat/MDR, a Scottsdale, Ariz., research firm, expect that even those low fees will generate some $4 billion in revenue for providers by 2007. The move to VoIP will benefit equipment vendors as well. Light Reading, which keeps an eye on the communications network business, reports that the market for all VoIP equipment, about $1 billion in 2002, is likely to reach almost $4.3 billion in 2006.
