The Effect of VoIP

By Deane Barker on July 4, 2006

Internet Calling Pressures Bells to Lower Rates: Interesting article about how Internet phone service — the Skypes and Vonages of the world — are affecting traditional phone companies.

[…] Verizon recently sent letters to customers offering a calling plan that includes unlimited phone service for $35 a month, instead of $60, a 42 percent cut. For people signing up for service through its Web site, AT&T now offers unlimited local and long distance service for $40, down from $50 a year ago.

[…] During the first quarter of this year, the number of traditional telephone lines dropped by 150,000 a week, according to TeleGeography. At the same time, the number of subscribers to Internet telephone services has increased by 100,000 a week

The article notes, however, that some of that phone line attrition is due to people abandoning land lines for cell phones.

Also interesting is how people use services that have no time-based costs.

[…] some Skype users take language classes over the phone, unconcerned about the length of their calls. He has also heard of parents going out and leaving their child with a babysitter, but using the free voice link as a baby monitor to listen in on their child’s room.