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Vonage Aims to Plug Scots In to Phone Revolution


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Vonage Aims to Plug Scots In to Phone Revolution

June 18, 2005

By Alastair Reed

THE voice-over-internet-protocol (VoIP) revolution in Scotland looks to be picking up pace after Vonage, the US-based industry leader, announced that it expects to have almost 100 per cent coverage of the country by the end of the year.

VoIP, which allows individuals to make calls via broadband at a fraction of the cost of fixed lines, has been slow to make an impact in the UK despite a growing customer base in North America.

However, New Jersey-based Vonage said it expects the UK to make the transition sooner rather than later, and as a result has made the country its first overseas target.

With broadband coverage in Scotland currently standing at about 97 per cent, chief executive Kerry Ritz said the take up could be rapid.

Vonage only covers six regions in Scotland - Edinburgh, Glasgow, Inverness, Dundee, Dunfermline and Ardrossan. However, it expects to cover nearer 65 area codes by October, rising to 165 by the end of the year. Scotland only has about 200 area codes.

"This is really the first time Scottish customers will really be able to decide what they want from their communications technology," he said.

Voip works by digitising the voice and transmitting it via digital packets on the internet rather than over the traditional copper wires of the public switched telephone network.

Many industry experts think Voip will eventually nudge the 130-year-old circuit-switched phone network into obsolescence.

"The real advantage is that it will create a level playing field for customers and businesses - the geographic isolation of Scotland will simply no longer be a problem," said Ritz.

He says ViOP will allow customers throughout Scotland to buy a "portable fixed-line number", which can then be taken anywhere around the world, and used straight away to make and receive calls as normal.

"Through virtual numbers, a customer in Edinburgh can use a London-dialling code, or someone in London can buy a Vancouver dialling code - it makes no difference at all," he said. "Then they can keep that number for life, no matter where they live."

The Vonage system, which is aimed primarily at residential and small business customers, consists of a simple telephone adapter which plugs into a broadband socket, and a normal handset.

Calls can then be made and received as normal. Voip is not required by both caller and receiving parties.

Vonage has grown rapidly since it was founded just five years ago. It has become the industry leader in the US, with about 40 per cent market share and 750,000 signed-up customers. In the US, it is adding new ones at the rate of about 15,000 a week.

Globally, the take up of Voip is soaring, with broadband analyst Dave Burstein estimating that there are currently 10 million broadband voice users around the world, up from just 4 million two years ago.

Analysts have warned traditional telcos that the era of fixed-line communications is coming to an end. In November 2003, UBS wrote a report entitled "Sayonara To Voice", warning that "VoIP technology has the potential to do to wireline carriers what file sharing is doing to the recording industry". In July last year Goldman Sachs warned "lost telecom revenues could reach the billions in a matter of years".

Vonage's push into the UK comes only 18 months after BT became the first UK telecoms company to launch a Voip product, with "Broadband Voice".

While downloads of BT's Voip software are on the rise, analysts say the plethora of smaller companies - running into the hundreds in the UK alone - which offer similar services has tended to hold back take up.

According to one, however, the introduction of Vonage into the marketplace could provide the much needed driver for increased take up.



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

** Certain call types excluded.

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