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Consumer VoIP is poised for take off, and it's sure to shake up the market, says Aloysius Choong.
Written by Aloysius Choong, Contributor
comment My sister's in China, my grandma's in Malaysia, a good friend's in India, and I'm looking for a super-cheap way to keep in touch with them. Right now, I'm split between VoIP services from SIPphone and MediaRing.

SIPphone and MediaRing who? I'll explain soon enough, but first, VoIP what?

VoIP, or voice over Internet Protocol, is a technology for transmitting voice data over the Internet. It's simple and cheap. Find yourself a broadband connection, plug in a VoIP phone, and you're ready to roll. It's not new, either--enterprises have been enjoying such cost savings for a while, while many international calling services are already carried over Internet backbones.

But it is only now that VoIP is starting to garner some acceptance in the consumer market, thanks in large part to improvements in voice quality.

Strangely enough, the providers of this technology aren't your SingTels or MobileOnes. Instead, the consumer-focused vendors include SIPphone, a US-based startup by Lindows founder Michael Robertson; Skype, a Luxembourg-based start-up from Kazaa founders Niklas Zennström and Janus Friis; and MediaRing, a Singapore-based former startup that nearly went bust with its free Internet voice services a while back.

It is a curious list, but perhaps not a coincidental one. The world of consumer VoIP is still fraught with uncertainties, and maybe best suited for the adventurous. One or two of the frontrunners will inevitably come out with fingers burnt.

With VoIP, the death knell sounds for the plain old telephone service. But cell phones are on a convergence (or collision) course with VoIP as well. Motorola has introduced a phone, to be ready by early 2005, which can switch calls seamlessly between cellular and wireless Internet networks. Meanwhile, HP has introduced its long-anticipated triple-wireless handheld.

It won't be too long before you'll be making end-to-end VoIP calls on your cell phones as well--while paying a fraction of your regular bill.

VoIP is the great meeting place for various forms of communications--mobile and fixed-line, voice and video. Unfortunately, it's also a disruptive technology, using the term made famous by Harvard professor Clayton M. Christensen. VoIP is starting off as a cheaper, lower-performance product, but it looks likely to displace established rivals.

To illustrate, Connexion is already offering wireless Internet on several flights, at prices ranging from US$14.95 to US$29.95. It's a nifty and relatively affordable service, and it's brilliant for Web surfing. However, when VoIP phones become prevalent, the service will also cannibalize in-flight satellite phone services.

The same dilemma exists for cellular services and VoIP over wireless. Hence, mobile operators simply cannot afford to ignore wireless if they want to have a share of the future pie.

So, although M1 earlier decided against implementing Wi-Fi, it will do well to get a foothold now. Better yet, it should skip to a wide area wireless technology such Flash-OFDM, which offers superior coverage.

But all that's for the vendors to worry about. As consumers, we just need to keep an eye on the costs of chatting--or lack thereof.

Skype proclaims on its Web site that it doesn't want any money for its software and service. Yes, it's free if you want to make calls using PCs and handheld devices with the software installed.

The same goes for SIPphone. The company sells you the necessary hardware at up to US$90 a piece. After that, calls from one SIPphone to another are free.

For now, MediaRing charges a relatively pricey monthly subscription, but it, too, gives away the VoIP phone for free.

To be sure, these guys are still fighting over standards, searching for the right business model while passing snide remarks about each other on the side. But whichever technology you choose--SIPphone, MediaRing or Skype--the cost savings can immediately be felt.

So you want free unlimited talktime? It isn't a pipe dream after all.

Aloysius Choong is senior journalist at CNETAsia's News and Enterprise Technology section.

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