Using VoIP to compete

Distributive trends have been part of human lives since the beginning! Just as the mode of transportation has changed the way people move and the way commerce is conducted. Such trends have spurred a slew of other trends to follow and new terms have evolved such as ‘Disruptive Technologies’. For such a trend, the cornerstone of the 20th Century has been the invention of electricity which has started the global industrial revolution!

In today’s recent history, the most notable Distributive Technology has been the Internet! The Internet has had an incredible impact worldwide across many sectors including industrial as well as global commerce. One of the greatest areas where the Internet had the greatest impact is the online industry, namely VOIP (Voice over IP). VOIP has created new term which has defined the future of communication since its invention by Alexander Graham Bell. The introduction of VOIP has created the economical alternative for the world to communicate; not only in regional communication but also in transatlantic communication.

The simplicity and cost effectiveness of VOIP has made it into one of the greatest invention in recent history. The Internet has been the home for all IP communication especially VOIP at the global level. VOIP works through utilization of the global Internet networks providing connectivity between computer-to computer and computer-to-telephony communications. Using the available global Internet connectivity, VOIP delivers the voice communication across a medium that spans borders at very competitive rates than delivering the same signal on dedicated telecom networks.

Initially VOIP was simply adapted because of its wide availability regardless of its quality of service. However, today with the vast improvement in VOIP technology, the number of VOIP terminated calls has multiplied globally and the technology has been adopted by the majority of telecom operators. The view of VOIP model being based on low cost is not the case any longer because the technology has been streamed through dedicated voice networks capacity on the Internet using the latest of voice compression means.

The continued development in VOIP coupled with the wide adoption of it as a means of all future voice communication, has transformed voice communication globally. One of the major areas which have the brunt of this transformation has been pricing structure of international voice communication.

Given that the Internet usage has been exponentially increasing globally, has facilitated for an alternate means for voice communication. Such adaptation has put immense pressure on voice communication charges globally and has destabilize the ‘per minute’ charges for voice communication. Such destabilization has created a slew of alternative voice communication companies utilizing the Internet as the gateway for VOIP communication with its latest technologies. Such transformation has deregulated, as well as significantly increased the level of competition in international voice connectivity offering; and therefore, bringing down the prices for such services.

Examples of which VOIP has created an impact can be seen on international voice communication as well as domestic voice communication.

On the international arena, VOIP has gained an acceptance globally and as such, has pressured the international per minute charges of voice communication to an extremely competitive level. As an example, the per-minute charges for a call between the Middle East and the US on Telco networks averages $1.50, whereas the per-minute VOIP charge averages $0.10. Such price discrepancies have actually increased the number of minutes for international voice minutes in total, in addition, to having increased the total revenue for international voice charges. However, most of the exponential revenue increase has been seen on the VOIP side, especially with its improved quality of service due to advances in technology.

Furthermore, with such transformation as well as financial impact, Telecom companies have transformed their international voice network to greatly adopt VOIP communication in order to increase network efficiency as well as bring competitiveness to its pricing offering.

On the domestic voice communication side, VOIP has transformed the entire offering, whereby forcing most operators to bundle the service at a flat monthly fee with services such as cable TV and high-speed Internet. Such offering has set the standard for domestic voice communication offering and has been adopted by operators globally.

The above examples have illustrated the transition in voice communication on the domestic and global arena by bringing network efficiency to an all time high and by bringing the pricing to meet market dynamics; i.e. supply and demand.

Given these facts of market adoption as well as consumer pricing incentives, VOIP proliferation will continue see an expanding use of the technology globally. As such, full fledge VOIP operators will continue to expand and offer their services across boundaries.