Sunday, April 09, 2006

There ain't no such thing as a free... phone call?

This article describes a new technology - Voice over Internet Protocol (VoIP). VoIP has recently made a large jump forward to expanding its market. VoIP uses Wi-Fi, which according to Dictionary.com is "a local area network that uses high frequency radio signals to transmit and receive data over distances of a few hundred feet." Wi-Fi communication has existed over the past few years, but mainly in the form of phones or walkie-talkie like devices within hospitals and offices. Today, manufacturers and mobile carries want to and are ready to link this technology to cell phones. According to the article, this will expand coverage and hopefully lower the cost of minutes for cell phone users. In expanding coverage, this will also aid in preventing dropped calls and poor coverage "spots" in ones house or business. Wi-Fi capable handsets are expected to reach 100 million units (annually) by 2009. A common issue regarding this technology is pricing. Cingular spokesman Ritch Blasi specifies,''Who's network are you going to be using, and do you share minutes? ... People might expect that because they're calling on a Wi-Fi that they're paying for a broadband connection into their home already.'' It is believed such technology will aid land-line phone companies in customer retention. Products such as Skype offer free communication from computer to computer over the internet. I have actually used this product to speak with friends in Brazil... the only cost being my time and a monthly internet bill, which I would pay anyways. The price of that call using Wi-Fi technology is obviously dramatically cheaper than a land-line call to Brazil. If this new technology expands to cell phones and even land-line phones, it is predicted this would lower phone bills and hope to revitalize the land-line phone industry. Free is still free though, for the most part, right? Will more users switch to the Skype (and similar products) on the internet for free - a technology they already have, with no additional cost or will consumers buy these new phones with the new technology, and still pay their monthly bills? Will the currently free services introduce a price if this technology catches on among consumers? An interesting dilema to watch in the next few months and years. There ain't no such thing as a free... phone call.

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