I was seated at my computer when a friend IM-ed me with a link. She said I should download a program called Skype that would enable us to talk across continents for free.

A click of the mouse and a couple of minutes later, I had established an audio connection with her home in a remote town in the German countryside. I could hear her loud and clear: “Hallo!”

Voice over Internet Protocol (VoIP) technology had instantly linked us.

We talked at length about old times. The cost of the call? Not a single cent. Because the call went across the Internet, it was effectively free. By our estimate, the call would have cost us over $200 if we had used our regular phones.

Getting Up to Speed on VoIP
As remarkable as it is, VoIP is not a new concept. In 1995, some Israeli technology wizards began to dabble with the idea of using a computer network to make telephone calls. Later in 1995, Vocaltec, Inc., a leading global telecom equipment vendor, released the first version of Internet-powered phone software.

The software was designed to run on a home PC with sound cards, speakers, microphone, and modem. It worked by converting the caller’s voice into a digital signal that traveled over the internet. At the receiving end, the signal was then converted back, effectively allowing the caller to speak to someone across the Internet.

Since then, the technology has come a long way. A growing number of technology providers have jumped on the VoIP bandwagon by offering PC telephony software. Initially, the focus was on PC-to-PC telephony running over intranets found in business environments. Yet, today, VoIP technology has become widely accessible to everyone. You can even purchase VoIP phones if you prefer not to talk to your PC.

Fueling the VoIP Boom
VoIP has grown to be as popular as instant messaging or blogging because it is useful, cheap and efficient. Programs like Skype make it easy for anyone to take advantage of free global telephony and make unlimited, superior quality voice calls using next-generation peer-to-peer software.

For consumers, VoIP benefits include:
Reduced Costs.
Long distance calls can be made without incurring telephone company charges. All you need is a broadband Internet connection.
Portable Phone Numbers.
Just plug your VoIP-enabled phone or PC into an Internet connection and you can make or receive calls.
New Services.
Bringing voice and data together on one network opens the door to new services, such as advanced conferencing and unified e-mail and voicemail messaging.
Superior Call Quality.
Today, VoIP calls are indistinguishable from traditional phone services.

In addition, VoIP phone solutions allow you to create virtual phone networks that connect representatives located anywhere throughout your company, no matter where they are physically located. Because VoIP equipment is inexpensive and doesn’t require proprietary equipment, it’s very affordable for small and large businesses.

And, it’s only going to get better. As consumers and businesses continue to embrace VoIP technology, more advanced products and services are making their way into the market. For example, new Pocket PC phones combine Wi-Fi internet phone and cellular phone access, ensuring good and affordable phone coverage wherever you are. These new intelligent phones also sync up with your contact management systems, making it easy to quickly reach anyone in your network.

John Fairley, CTO of Exclusive Domains in Chicago, says the chief benefit of these new devices is efficiency.

“It’s more convenient to carry one device than to carry several,” said Fairley. “Anything you take mobile with you like your music player, cell phone, and PDA is being converged into one. People are looking for power and convenience.”

Vendors such as IPeria, Pulver Innovations, and Nuera are pushing to market these devices, which look a lot like typical cordless house phones and can sense Wi-Fi access points and link automatically to the Internet.

“You can run VoIP on your internet-enabled phone to reduce costs,” said Fairley. “Because these phones have built in Wi-Fi technology, you can move from your home to your office while using VoIP and take advantage of not only the internet but also your wireless networks.”

VoIP may be on the way to your city soon
It’s just a matter of time before VoIP networks are ubiquitous. Azulstar Networks, the first company to successfully build and commercialize a city-wide Wi-Fi network, launched the first metro-wide Voice over Wi-Fi telephone service in Rio Rancho, New Mexico in May 2005. Their calling plans include caller ID, call forwarding, voice mail over e-mail, multi-party calling, call waiting and web-based call control managing. Overall, Azulstar expects typical small business to save between 40-60 percent off of their current bill by using the service.

“In Rio Rancho, we have created the most advanced city-wide Wi-Fi network in the country.” explained Azulstar CEO Tyler van Houwelingen.

“That allows us to give anyone in the city mobile VoIP phone service that is of equivalent quality to traditional landline phone services yet is much more affordable. This effectively breaks the traditional telecom “local loop” monopoly that has dominated telephone service for years, slowed feature enhancements, and kept prices unnecessarily high. We expect VoIP networks like our Rio Rancho network to be available throughout the country within a few years.” At a certain point, all phone calls will likely be VoIP-based, he added.

VoIP is coming of age
Despite its potential, there are some persistant criticisms of VoIP technology.

Because access to VoIP is limited to broadband users, many consumers in rural areas with limited Internet access may find they can’t use VoIP . Some argue that this will further fuel the widening gap between rich and poor, continuing the digital divide that leaves many unable to tap into new opportunities fueled by an ever-expanding digital world.

Others disagree. M.P. Jaiswal, a professor at the Management Development Institute in India, believes that VoIP will be adopted more rapidly by consumers in developing countries because they are more likely to embrace new cost-saving technologies.

“The technology of voice over Internet protocol will be a key enabler for growth and service delivery,” he noted.

Setting aside debates about the societal implications of VoIP technology, one thing is clear. VoIP is coming of age, and it’s time to consider abandoning your existing phone service in favor of a more affordable VoIP service.