Summary
Everyone in the telecommunications sector knew that voice over IP (VoIP) was going to take over the phone market, but Jeremy Citron made sure that Vonage was the first to make it a reality. After all, on the Internet, voice communications are just another form of data and it can be sent free of charge, unlike standard wired-in phone companies. Thus, the low prices that Vonage offers its customers has allowed it to quickly gobble up market share.
Original source:
http://msnbc.msn.com/id/6845002/site/newsweek/
Details
- Like the technology he's pushing, Jeffrey Citron, the 34-year-old CEO of Internet phone company Vonage, has a tendency to shake things up.
- In 2000, he began pouring his own money---$70 million and counting---into Vonage, an upstart telephone company that is now revolutionizing this $1 trillion industry.
- By 2008 that number will rise to 16 million, according to market-research firm Frost & Sullivan, as broadband Internet connections grow.
- London-based technology consultancy Ovum says that if you include all the people downloading software from companies like Europe's Skype, which charges only for calls to non-Skype users, the number of Net phoners around the world will reach 200 million in four years.
- According to a recent AT&T survey, dozens of multinational firms already have their employees making Internet voice calls, and 43 percent are currently using, testing or planning to implement such systems within the next two years.
- Today telephone companies still bill customers according to the time and distance of their calls, as voice travels mainly over individual circuits that open and close with each call.
- "VoIP will mean the end of picking up a phone, talking and then hanging up," says Paul Saffo, director of the Institute for the Future in Palo Alto, Calif.
- The race among firms like Samsung, Sony and Apple to invent the next killer apps for consumers will grow more anarchic.
- In a speech late last year, FCC chairman Michael Powell described the Internet phone call as a "revolution" with "profound implications" for the telecom industry, and called for a "new constitution for the regulation of such services, one befitting that revolution."
- Unlike Vonage, which has a more traditional flat-rate charge system, Skype distributes free file-sharing software that enables users who are both on the system to talk to each other free of charge.
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