By Damian May SYDNEY, March 19 AAP - The cost of a phone call could be on the way down with voice over internet protocol (VoIP) likely to take off in Australia as Telstra, Optus and other smaller operators slug it out to see who wins in the roll out of broadband internet services. VoIP allows consumers to make normal day-to-day calls over household internet connections, and with faster and better broadband connections lingering fears over sound quality can be dispelled. Some analysts believe that the advent of VoIP will bring down the cost of making a normal call by more than 80 per cent which could take a chunk out of incumbent telcos' fixed-line revenues. "Voice is a cost driven market and the advent of VoIP could slash more than 80 per cent off basic costs," said telecoms industry analyst Paul Budde this week. He believes incumbent telcos, such as Telstra, had "severely neglected their cash cow", with industry innovation instead aimed at harnessing the mobile market and now increasingly at securing broadband customers. "Telstra is repositioning to secure access revenues rather than voice revenues," said Chris Roberts, product manager at Request Broadband. In the US and Japan VoIP is already making an impact. IBM announced at the end of 2003 that it will move 80 per cent of its 300,000 employees to VoIP phone systems by 2008. "In 2004, 25 per cent of all international calls in the US will be VoIP calls and in Japan, there were 5.3 million people able to make VoIP calls in 2003," said Mr Budde. Telstra recently slashed the price of basic broadband internet access for consumers to $29.95 a month. Although this has caused consternation among its rivals, which claim they are being squeezed by Telstra, whatever the result of the battle analysts believe cheaper broadband access is here to stay. "Sustained low prices from Telstra and its competitors will most likely make the uptake of broadband much faster than anticipated," said Macquarie Equities analyst Tim Smart. Some big corporate customers are already embracing VoIP; Telstra has signed up Westpac Banking Corp which is expected to have connected more than 30,000 handsets at 1,000 locations by December 2004. "The Westpac agreement shows IP telephony is recognised as bringing financial and productivity benefits through a single, converged communications network," Telstra Data Solutions and Sales Managing Director Paul Geason said. Telstra chief executive Dr Ziggy Switkowski said earlier this month that IP telephony and IP communications was the direction in which the whole industry was moving and that Telstra welcomed the migration. However, he did admit that there was sure to be some degree of cannibalisation. Mr Budde pointed out that voice remained the "killer app" and person to person communication remained key. New services with new applications were needed and he said the consumer love affair with photography and mobile phones could easily be repeated through video over VoIP. Mr Budde also said premium services could be built on top of VoIP. For example, people could pay more money for CD quality sound, as opposed to the one size fits all method of the moment. Telecom Corp of New Zealand's AAPT is currently gearing up for the launch of a new VoIP offering to the medium-sized and corporate market. "VoIP is more than just a way to offer cheap voice calls to businesses and consumers," AAPT's chief marketing officer Jennifer Tejada. "It's about looking at the basic features customers already receive - like voicemail, teleconferencing and call diversion - and making these more flexible, scalable and simple. It's about giving customers control over their services and usage." "VoIP is not new technology. It's been tried and tested in larger markets for many years. Australian businesses and consumers are becoming increasingly interested in VoIP," said Ms Tejada. "Offering voice with a focus on applications and customer self-service is an area the traditional incumbents dont focus on," she said. AAP dm/sjh
