VOIP's First Hurdle

With all the advantages of VOIP (Voice Over Internet Protocol), there is still 1 drawback -- it cannot give you total wireless phone communication like a cell phone. Cell phones and VOIP seem to be 2 different animals. True, you can have a wireless internet connection (including VOIP) with Wi-Fi hot spots, but they are of no use to your cell phone. Or are they?

In fact, dual mode phones are already reaching the market. A few companies (including Motorola) have introduced cell phones that can automatically switch to VOIP when they detect a WiFi hotspot. This is sure to be popular with consumers who want the reduced costs of VOIP. Yet it is likely to be grudgingly adopted by cellular phone companies, who stand to lose considerable profits.

Industry analysts, however, predict this kind of service will be widespread within the next 5 years. Cellular phone companies will have no choice but to offer plans which combine VOIP and cellular, otherwise they will lose business to companies that step in to fill the void.

And Then

The next step after cell/VOIP integration is the replacement of cell networks with wireless VOIP. A new wireless technology called WiMax is in the works: city-wide wireless networks that operate at much faster speeds than what is available today. Such a network would allow anyone in range to use a VOIP wireless phone. This technology could also be used to transmit video and audio, possibly replacing services like video rentals and radio.

WiMax is currently in the testing stage around the world. While it is a great idea, it may cause disruptions within several industries, such as movie theatres, DVD distributors and traditional phone companies -- all of which may lose if this technology becomes common.

Fortunately, it's difficult to hold back technological innovation. New technology usually presents challenges and opportunities to existing industries. The phone companies and entertainment industries will be challenged, but could potentially thrive in the new WiMax environment if they find the proper niche. For example, faster broadband will likely make VOIP video phones a common item. There will undoubtedly be many unforeseen applications to this new technology.

Did You Say FREE?

Another future trend to watch for is the possibility of free internet telephony. After all, we do not pay for regular data transmission over the internet, so why pay VOIP service providers $15 or so per month? Voice data is the same as any other data that travels over the Internet. Some observers predict that as VOIP is more universally adopted, monthly fees for telephone service will disappear.

Of course, there would still be a charge for the basic Internet connection, but as bandwidth continues to grow, a single internet connection could be used for telephone, television, e-mail -- and surfing the net.

Soon ET can not only phone home -- it'll be a free call.