Staying Afloat in VOIP Wave

5:35 PM -- I probably won’t share this with my therapist, but lately I have had a love/hate relationship with voice over IP communications.

I love it because the technology is saving me some real money as compared with my previous marriage with Verizon. The VOIP service I purchased -- AT&T CallVantage -- costs about a third of my previous landline package. Setting it up was a snap, although I had to do a little experimenting to get the VOIP box to work with my wireless router and cable modem. I also like the way I can now manage my account and calls from a personal Web portal, which is a real timesaver when I am traveling or away from the office for any length of time.

What’s not to love, right? As it turns out, there are a few things that have caused me to gaze longingly back at my old landline service, not the least of which is the dependability and reliability of my previous telephone network. Over the past several months, my VOIP system has abruptly disconnected calls. It makes annoying clicking and whirring sounds every time someone tries to dial in while I am on the phone, and completely fails at least once a week. Of course, I don’t know the system has failed unless I go to my Web portal to see all the calls I have missed, or have forwarded calls to my cell phone as a backup measure.

I have called AT&T CallVantage several times to complain about the service and suggest that my VOIP box be replaced. This is when the finger pointing starts, with the techies there blaming failure on everything from my wireless network to sunspots.

What is really annoying is that every time my VOIP system fails I have to go through this auto call center reset process to swear on my first born that my control box hasn’t been moved to a new location -- all in the name of federally-mandate e911 requirements. Its enough to make me dig out the old soup cans and string and go back to a system that really works.

Will I ever do that? No, because VOIP is the wave of the future -- or at least that is what everyone is telling us.

The number of VOIP subscribers in the U.S. is expected to hit the 32.6 million mark by 2010, which means that about 40 percent of all broadband households in the country will soon be hanging ten as they ride the VOIP, says market researcher eMarketer in a recent report. This compares with an expected 9.6 million subscribers by the end of this year.

The Telecommunications Industry Association (TIA) is less enthusiastic in its projections for VOIP, but gung-ho nonetheless. The trade group says VOIP usage in the U.S. will grow at a compound annual rate of 43.9 percent, and will most likely reach 18 million subscribers by 2009.

The primary driver for VOIP, at least on the consumer side, is cost, which averages roughly $20 to $40 per month per subscriber, notes eMarketer. This compares with a $51 average monthly bill for landline services (although my monthly bill was pushing $90).

Cable providers have also tantalized users with a discounts if you buy the triple play of residential voice, video, and data services all nicely wrapped into one bundle. This makes it a lot easier to dislike a lot of things all at once, since you only have to make one phone call or write one letter to complain about spotty service.

Recently, I have found myself using "free" VOIP services like Skype to make international calls or conduct multi-person conferences. The voice quality of the service isn’t always that great, and gets even worse as you add more people into the calling pool. But, the price is certainly right.

I also remain hopeful that enterprising companies will use VOIP as a springboard to develop additional services and perhaps even successfully apply the technology to enterprise applications like call centers. I’ll talk more on this in a subsequent blog and point to some companies that are moving in this direction.

Meanwhile, if you have any thoughts on VOIP -- good or bad -- send me an email or post on the messageboard. Just don’t call me.

— Tim Scannell is Founder of Shoreline Research . Special to Unstrung

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