UK VoIP market hots up

Businesses and consumers are being targeted by the latest entrants into the increasingly crowded Internet telephony sector

Two more companies have elbowed their way into Britain's blossoming voice over IP market.

On Instant and Gossiptel are both offering potential customers the promise of much lower telephone bills by letting them conduct calls over the Internet rather than a traditional phone network. Gossiptel, which launched on Monday, is targeting consumers, while On Instant has its eye on the business market.

Gossiptel allows free calls to any other VoIP user in the world, as long as their service is compliant with the SIP (session initiation protocol) standard. Gossiptel estimates that already around one million people worldwide are using SIP, and believes this is set to skyrocket over coming months.

"It really wasn't that long ago that a minority of us had email, but now almost everyone has an email address," said Kim Thesiger, co-founder of Gossiptel, this week.

"Given that BT has stated that it will make broadband available to exchanges serving 99.6 percent of UK homes and businesses by the summer of 2005, I believe the uptake of broadband telephony will rocket in the next 18 months with people signing up purely to take advantage of free and cheap telephone calls."

Calls can also be made to non-SIP lines (such as a standard BT number, for example). Prices vary, but calls to Western Europe, North America, Australia and New Zealand cost 2.5p per minute or less at any time, which suggests Gossiptel will be a competitive service.

Users can sign up for Gossiptel for free. This gives them an 0870 number through which to make and receive calls, VoIP software for PC or Mac, and some Internet-based services such as an online address book. Anyone choosing this option, though, will need to supply their own VoIP handset or buy an Internet telephony adapter.

Alternatively, they could choose a Gossiptel starter pack. This can cost as much as £116, and will include an Internet phone adapter.

Because this adapter will allow a standard phone to handle VoIP calls, it means in theory that it could be plugged directly into a broadband line rather than going via a PC. It's more likely, though, that a user will connect via a router, so they can run their computer and use their VoIP connection at the same time.

On Instant's VoIP service is aimed at small and medium-sized businesses. It hopes to persuade firms to pay up to £12 per user per month for its service, which allows free calls between subscribers and also provides a range of Web-based services such as a CRM application and a monitor to show which other users are available to talk.