Calling via Internet cuts costs
COMPUTER TELEPHONY VoIP service sees explosive growth Telecoms react to more competition
Since Mark Skapinker switched to VoIP provider Vonage Canada about two years ago, he hasn’t looked back.
“ I’m saving a lot of money,” says Skapinker, who says he and his wife, Hazel, spend much of their free time on calls to family and friends across North America and overseas. The main reason the family switched is because long-distance charges for calls to 20year- old daughter Lisa — a student at Dalhousie University in Halifax — were often more than $40 a month. Combined with the cost of a residential line and overseas long- distance charges, the monthly phone bill approached $ 100. With Mississauga- based Vonage Canada’s premium unlimited plan — which offers unrestricted calling in Canada and the U. S., plus about 15 free features including voice mail, caller ID, call waiting and voice-toemail conversion — the family has capped the bulk of its monthly telephone costs at $ 40.
“ We’re definitely talking more to family and friends,” says Skapinker, an investment banker who immigrated from South Africa in 1979. He is typical of about 200,000 Canadians who are riding the crest of a VoIP ( voice over Internet protocol) revolution that has turned the telecom world on its head.
“ Up to 1 million Canadians will subscribe to VoIP by the end of 2006,” says analyst Brian Sharwood, with Toronto technology consultant SeaBoard Group. Former monopoly Bell Canada and its competitors such as Telus Corp. have suddenly found themselves competing toe-totoe for their bread- and- butter residential business with Toronto’s Rogers Communications Inc. and startups like Vonage, Primus Canada, babyTEL and Skype Technologies S. A.
This competitive free- for- all is made possible by the fact that VoIP — also known as voice over cable, digital voice and voice over PC — allows calls to be made over a high- speed Internet, cable or telephone connection. The result is that people can save as much as 50 per cent of their monthly phone charges. Those are the immediate savings, but by 2010, analysts predict telephony will be free — or at least “ free” in the sense that today, for a flat monthly fee for your Internet service, you can send as many emails as you like, to whomever you like.
For the Skapinkers, the immediate savings extend beyond the family home. They have, for example, cancelled the telephone service at their Muskoka cottage. Instead, Mark brings his Vonage adapter with him, plugs it into his cottage Internet connection, and his Toronto number automatically kicks in free of charge. He has also secured a virtual Toronto number for daughter Lisa from Vonage at a cost of $7 a month. The virtual number treats calls she makes from Halifax as if they were local calls made in Toronto.
Is there a disadvantage to VoIP?
“ In the beginning, voice quality on one in 10 calls was noticeably lower,” says Skapinker. “ Now, it’s almost never.”
Also, if his Internet provider, Bell Sympatico, is down, his VoIP service cannot function. After each Sympatico meltdown, he has to unplug his Vonage adapter from the wall, count to 20, and plug it in again to start his phone service.
“ This only happens a few times a year,” says Skapinker, who is not particularly bothered by it. Danny- Pierre Auger, a 27year- old living in Boucherville, on the south shore of Montreal, has been a VoIP subscriber since cable company Videotron launched its service at the beginning of this year.
“ It’s as reliable as Bell Canada,” says Auger.
Today, he subscribes to Videotron’s basic service, which allows local calling for a flat fee of $15.95 per month. Long-distance options and calling features can be ordered as desired.
Auger, who operates an ITbased home business, also has a second line for faxes. He sends as many as 20 a day, mostly sales leads for window-makers, garages and cleaning companies. He pays Videotron a flat monthly fee of $5 for those calls, compared to the $50 to $60 per month he used to pay Bell.
“ On the south shore, Videotron has as much as 40- per- cent market share,” says Sharwood, noting virtually all its gains have been at the expense of Bell.
“$ 40 or $ 16? You choose,” says Auger — a sentiment being echoed across the country.