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While it's common in the consumer electronics industry to bemoan price erosion, even the most aggressive importers can't touch VoIP providers. They are literally giving it away.
Three recent announcements over the past three weeks underscore the dramatic shifts occurring in the home communications market. Late last month, Mountain View, Calif.-based Jajah announced that its members could call each other's landlines and mobile phones for free. A new service from Fusion Telecommunications International also debuted, rising to challenge Skype's free calling, while Microsoft's Windows Live Messenger (which offers inexpensive PC-to-landline calling and free PC-to-PC calls) went live on June 20.
Jajah's service is PC-based, but does not require additional equipment or a high-speed connection. Instead, it's billed as “Web-activated.” Users enter their existing landline or mobile number on Jajah's Web site and the number they intend to dial. The call is then connected over the Internet through Jajah's back-end VoIP network.
With the new promotion, registered users can call each other for free both within the United States and to several international locations. Registration is free and Jajah will monitor calling frequency to ensure “fair use.”
Fusion's new service, marketed under the efonica brand, lets subscribers call each other for free using their existing landline or mobile telephone numbers with either efonica's PC softphone client, third-party IP phones or traditional phones with an adapter. The service works on both broadband and dial-up Internet connections.
According to Fusion, the service is primarily targeted at users who make frequent international calls, though it can also work nationally. After registering with the service online and entering their traditional landline or mobile phone numbers, users are assigned the “worldwide Internet area code” (10), which is then dialed before the familiar phone number. Fusion calls the combination of its Internet area code and an existing phone number an “eNumber.”
For calls to be free, both standard phone numbers must be registered with Fusion, and the Internet area code must be dialed.
A user dialing from the PC could then reach other efonica users on their mobile or landline phones.
The Fusion service supports caller ID with name, call waiting, three-way calling, call forwarding, call transfer, call hold and do not disturb, free of charge. The company will also offer a premium service — efonica Plus — that offers voicemail, the ability to call non eNumbers from the PC and other VoIP features for an additional charge.
For its part, Microsoft announced the official launch of its Windows Live Messenger service. Alongside a host of features, Live Messenger gives users the ability to place calls from the PC to landline or mobile phones for 1.9 cents per minute through a partnership with Verizon (AT&T struck a similar deal with Yahoo! for its PC VoIP service). It also provides free video/voice conversations between Messenger users.
Both Philips and Uniden have announced cordless phones designed to work with the new Windows service, hoping a chunk of Live Messenger's reported 240 million global users can be enticed to accessorize for the new VoIP features. Microsoft has also introduced Web cams to support the video features of the new Messenger.
The on-rush of competition has forced Skype to kill the fees for its SkypeOut calling feature, which enables Skype users to dial traditional landline and mobile phones from their PCs. The price compression has even cascaded toward to the non-PC services. Vonage announced last month that it was including several international locations under its “all you can dial” pricing plans.
And just as a host of companies are jumping on the PC VoIP bandwagon, Skype may be jumping to the television. The London-based software development firm Oregan Networks announced at the end of June that it had developed a solution which could route Skype message alerts and caller ID information to televisions. Oregan Networks will market the solution to network operators and set-top box makers.
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