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Long Distance Nearing Free?

All the predictions that long distance telephony would eventually be free seem closer to reality than ever before.

First, Vonage announces free overseas long distance is included in my $24.95 per month all-you-can-eat to select countries (and my bride is in London so the timing was unusually perfect) and then today Skype announces free SkypeOut (calling from Skype to landlines) is free in the US and Canada.

I had some serious issues with Vonage in the first few months of this year. Finally I ran some tests on my Roadrunner cable connection and wasn’t pleased with the throughput. After talking with tech support, they send out a tech who replaces a filter at the pole and my cable modem, and the connection has been fabulous ever since.

A week ago I was in the Santa Cruz mountains outside San Francisco without cell service. My hosts had a solid internet connection with Wifi so I headed to a quiet corner each day to call my bride via my Skype account. Without it, I would’ve been reimbursing my hosts for unknown telephony charges. (Amusingly, I used a pair of iPod earbuds and a microphone from my M-Audio Microtrack recorder to make my calls).

With more companies building voice over internet protocol (VoIP) into their applications, demand should continue to increase and the use of landline or mobile telephony carriers reduced. Be interesting to see what happens with packet shaping by internet service providers (to reduce quality of service for competing voice services running on their networks) as well as what might happen to costs on voice transports.

About Steve Borsch

I'm CEO of Marketing Directions, Inc., a trend forecasting, consulting and publishing firm in Minnesota. Prior to that I was Vice President, Strategic Alliances at Lawson Software in St. Paul where I was responsible for all partnerships at this major vendor of enterprise resource planning software products and services. Read more about me here unless you're already weary of me telling you how incredible and awesome I am.

Comments

  1. Wrong Idea says:

    The big story here is not “long distance” being free–it’s voice communication being free. I know I haven’t paid a long distance bill in years. But there are many of people who maintain home phones, cell phones, etc. Skype just rendered their business models irrelevant for a large number of the general public, myself included. I just did some tech support today for a guy who is paying Bellsouth $25 a month plus $15 a month for dialup ISP. For about $15 less than he’s currently paying, he could have broadband, always-on service. And FREE calling anywhere in US/Canada. THAT’S the big news. Your phone company is now dead.

  2. Steve Borsch says:

    Great perspective. The only place I’d beg to differ would be in quality of service (QoS is *constantly* talked about in telephony circles).

    The QoS of landline phones far surpasses both mobile and computer-to-computer calls. Much of the lower QoS on Skype could be mitigated with superior headsets, but I’ve exhaustively tested several, both Skype, Gizmo and Vonage. I’ll stick with Vonage (whose IPO is now in jeopardy in my view) but use Skype alot and am still on-the-hunt for ways to get its QoS up to either Vonage or a landline.

    For, say, an hour long conference call, I find I have to strain and work hard to stay engaged and pick up the “signal from the noise”. For me, cell phone calls are usually short as are Skype (and I’ve got both a high end Logitech as well as a top-of-the-line Bluetooth headset) since the signal quality always seems low.

    Whether Joe SixPack will get rid of landlines will remain to be seen. Powers out? So is Skype and Vonage…but your powered landline is not. 911 is always available (the telephone companies only ace-in-the-hole against VoIP) while setup on Vonage is a struggle…and not a good idea on Skype.

    I agree that the phone company is dead but potentially so is mobile telephony when citywide Wimax is installed and a VoIP mobile device (or multidevice with both cell and Wifi capability) can make free Skype calls over free Wifi.

  3. Couldn’t agree with you more Steve on Skype quality of service issues. I tested Skype-in and Skype-out for three months using a top of the line Logitech headset. I was on the phone several hours a day connecting with my partners who reside several thousand miles away. Ultimately I gave up using Skype, because my partners and I got tired of all the dropped calls. We’d rather pay the 5 cents per minute for a land line. Sounds like you haven’t experienced that as much with Vonage. True?

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