Should You VoIP?

My friend in Florida, Samuel, called me last week and immediately I noticed a difference in the sound quality compared to our usual conversations. At first, I dismissed it, thinking he was calling me from his cell phone. Five minutes into the conversation when the call suddenly dropped off I “knew” for sure he was calling on his cell. Until he called me back from his cell that is. It turns out that Samuel was using his regular home phone, but when he told me that he had a VoIP account that was all I needed to know.

What is VoIP? VoIP stands for Voice Over Internet Protocol which is a method for you to talk with someone via your broadband internet connection, cable or DSL. Your voice is translated into data and sent over the same connection used for your computer. VoIP has become popular because you can talk to people for just a few cents per minute…worldwide! In fact, in a recent ad I saw that one of the leading providers of this service is offering free calls to Canada and charging just 3 cents per minute for calls to Hong Kong and 6 cents per minute for calls to Copenhagen. People who frequently call international destinations love VoIP. Heck, at prices one-tenth the amount or less of conventional long distance rate VoIP does have a strong appeal for consumers.

Overall, plans seem to start at around ten dollars per month and increase to around forty dollars monthly depending on the plan. Many VoIP plans give plenty of “extras” as part of the package including:

* Call Forwarding
* Call Waiting
* Caller ID with the name
* Repeat Dialing
* 3-Way Calling
* Voicemail
* Call Blocking
* 911 Accessibility

I have seen plans that also offer widespread 411 accessibility, fax service, and virtual phone numbers which allow users to select phone numbers outside of their area code.

There are big drawbacks to VoIP and I learned what one of them was when I was talking with my friend in Florida: a power failure will mean that your phone will not work. My friend lives in an area of frequent lighting strikes and occasional power failures so each time there is an interruption he has to wait for power to be restored before he can call out from his home phone. Fortunately, he keeps his cell phone charged, but he does have to pay for most calls made on his cell. In some areas the savings from a VoIP account will be offset by cell phone usage.

911 calls also can be difficult to place; you may need to dial a lengthy ten digit number to the police, fire, or ambulance station instead costing you valuable time in an emergency. Some providers are working hard to overcome the problem, but it hasn’t quite been overcome.

In all, VoIP usage continues to grow and it will probably become an important way for many to place calls, particularly internationally. You can’t stop power outages and 911 issues remain, so weigh your options carefully before making the move over to Voice Over Internet Protocol.

Author Information:

Matt Keegan is The Article Writer who writes on a variety of social, human interest, as well as business related topics.

Skype, the Britney Spears of Telecommunication?

Although Skype has been around for a few years, my first known encounter with the internet telephony provider took place last Fall when the CEO of an online gift store contacted me about writing press releases for his company. He asked me almost immediately whether I was using Skype and made sure that I knew he was.

I wasn’t impressed by the quality of his calls as most of the conversations we had were not very clear. At the time my phone service was with one of Ma Bell’s offspring, but I later switched to internet telephony as provided by our cable company. Skype, which offers a free service, doesn’t compare to the quality of the calls Time Warner Cable offers to me. Then again, I have never downloaded Skype for my personal use.

eBay acquired Skype for a hefty $2.6 billion in September 2005 from a pair of entrepreneurs, Niklas Zennstrom of Sweden and Janus Friis who hails from Denmark. Both men founded the peer-to-peer file sharing company KaZaA in 2000 which they sold a few years later in order to start Skype.

Footnote: Zennstrom and Friis are now on their third joint start up — the interactive software program Joost.

Now back to eBay. Two years after acquiring Skype, Zennstrom is gone and eBay has finally realized that the price that they paid for Skype was too high. Indeed, eBay says that they are writing down the value of Skype by $900 million to better reflect Skype’s actual worth. eBay is writing off an additional $530 million to pay off several Skype investors including Zennstrom who was Skype’s Chief Executive Officer under eBay.

The total of the “impairment charge” being taken by eBay is a whopping $1.43 billion.

What does this story have to do with Britney Spears? Not a whole lot other than this: the value of your commodity — whatever/whoever it is — could be grossly overpriced. When Skype/Spears’ performance drops, what are you left with? Answer: Big losses and a tarnished image.