Problems In Traditional Telecom Industry

By: Martin Okeeffe

Some of the largest, and oldest telecom companies in the US are feeling the initial impact of an enormous wave of technology-driven customer migration to internet based, or Voice over Internet Protocol (VoIP) telephone service.  Verizon, AT&T (incl. BellSouth), and Quest reported a combined loss of 1.7 million landline customers in April/May/June of 2006 alone, mostly due to internet phone competition.

According to Todd Rosenbluth, a telecommunications analyst at Standard & Poor’s, “The threat of competition from cable companies and Internet phone companies was there a year ago, but the reality of it is something we’re seeing in 2006."

The reasons aren’t complicated; lots more features and functions for about half the price the phone companies charge for unlimited calling plans.  Last year, the Harvard Business Review had this to say: “Internet telephone technology, rapidly displacing the traditional kind, isn’t just inexpensive.  It’s revolutionizing the way companies coordinate people, connect with customers, and compete with one another."   HBR predicts over 50 million VoIP users by 2008.

The most intriguing VoIP feature is its portability.  Your phone # can travel with you; the enabling adapter device, which connects to any regular telephone, needs only a high-speed internet connection and a power source.

So, whether in a hotel room, a vacation home, or anywhere you can plug into a broadband network, your phone number can place and receive calls.  Whenever I travel now, my VoIP adapter is with me; simply connecting the hotel room’s high-speed internet and telephone to my voip adapter enables me to place calls while avoiding the high per-call tolls charged by hotels.

Yet another threat to the Bell’s core DSL internet service is also emerging.  WiMax, a system that promises Internet access at speeds greater than cable broadband connections, operates wirelessly and over long distances.  This month, Sprint Nextel, the 3rd largest US cellular operator, said it would spend up to $3 billion to build a new network based on WiMax….to reach over 100 million consumers over the next few years.

Today, consumers mostly rely on wired high-speed internet connections from cable and phone companies.  WiMax promises an end to this duopoly with the result for consumers: lower cost and more choices.

Want to learn more about VoIP? See how you can drastically reduce or even eliminate your phone bill. Plus, learn how to plug your existing business into, or create a new business around, these exciting new revenue streams, please visit http://www.voipaware.com. For a copy of the Harvard Business Review Article referenced aboveFree Reprint Articles, please send a request to: 1voipgeorgia@comcast.net.

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