As with many other Internet applications, Voice-over-Internet Protocol is touted to be what would democratize the telecom industry. Where previously, only the big companies could set up the expensive and bulky telecommunications equipment, now innovative firms could establish their own “telephone” networks, which go through the Internet.

What’s great with this setup is that ultimately, the consumers would benefit from the changes brought about by innovation. VoIP providers are potentially strong contenders to the telco space, as these are able to offer virtually the same services—calling and instant messaging—as their telco counterparts at a cheaper price. Phone calls and messages traverse the Internet as data packets, and not as circuit switched connections, and hence there is no longer the need to invest in expensive equipment and cable roll-out. Customers also get the benefit of mobility, in that one telephone number is not fixed to a certain location, but can be transferred along with a VoIP handset.

Telecom companies are already experiencing difficulties in competing with VoIP, more so with the introduction of VoIP over wireless networks—this could spell the demise of traditional cellular service providers!

It would still take several years before things would normalize—VoIP service right now is not as reliable and wide-ranging as traditional fixed-line and cellular telephony. But it will soon catch up. Telcos are watching out for that!