VoIP forces Telcos to slash price

Customers always want the best deals for the money they pay.. So it is not surprising to understand why VoIP that offers a method of calling practically anywhere in the world at much cheaper rates is catching on like wild fire. While there are lobbies that argue on the possible success or failure of VoIP in the days ahead one undenyable fact is that more users are switching to VoIP phones purely to tap into the cost benefits.

According to Henry Gomez, general manager of Skype, "People are going to look at voice communications as something they expect to get for free," Forcing the VoIP industry in that direction Skype is eliminating the charges that a US subscriber pays to make calls within the US and in Canada. In the process, Skype is not only making it very competitive within the VoIP market but also making it harder for companies to charge anything for a basic home phone line on its own. It is expected that by 2010 a quarter of the telephone users globally would have shifted to VoIP based phones.

Telecom companies are finding themselves with fewer options other than slashing their call charges if they intend to hold on to the their customer base. New York Times recently reported that Verizon and AT&T recently dropped phone service and long distance prices by significant percentages (in some cases close to 40%) to battle unprecedented competition in those areas.

The competition is also forcing certain telecom companies to lobby in Congress to set up a tiered network. Companies are proposing that in this tiered structure, companies offering faster, higher quality connections to companies and web entities can make their revenues by charging for the service provided. It is suggested that VoIP service providers should fall into this category.

Given the fact that the falling prices for phone service because it costs lesser to deliver voice communications over the Internet than over the traditional phone network, VoIP has a definite advantage. If any the prices will only fall further. It remains to be seen how far the telecom companies are willing to bend. Bend they might Break will they?? Lets watch !