Synergy Between VoIP Services and the Prepaid Calling Card Industry

VoIP (Voice over Internet Protocol) is a new brand of technology based on the Internet, which has modernized the phone industry. VoIP allows for an inexpensive way of transmitting voice signals over the Internet; hence it offers the possibility for Internet users to have their phone calls done over the Internet. The advantage of VoIP over previous technologies for voice transmission over computer networks is that it mitigates long delays as well as loss of quality. Before VoIP, Internet callers had to wait for about a minute or two to completely receive the conversation from the other side before they could speaka time-consuming ordeal indeed. Internet calling was therefore, in most respects, inconvenient. The service quality of calls was also not as good as it is now. Furthermore, the costs of making an Internet call are quite high then. Having found a solution to solve all these previous concerns, VoIP encouraged the widespread use of Internet calling in recent years. The burgeoning VoIP technology still has so much room for improvement in terms of service optimization. Companies like Skype and Vonage have pioneered the VoIP service business by providing customers with offers that are far more enticing than corresponding offers by regular phone service providers. However, some of these VoIP service providers, being the businesses that they are, overcharge customers for aim of maximizing their profits. High prices are justified through brand reputation, for instance. Despite the apparent extortion by VoIP service providers, cheaper alternatives are actually available out there. One of these cheaper alternatives is a VoIP prepaid calling card. VoIP prepaid calling cards typically offer more equitable deals than most large VoIP service providers.

With the escalating popularity of VoIP services, an imminent boost of the prepaid calling card industry consequently follows. Total market revenue for prepaid calling was $2.7 billion in 1999. By 2002, about 29 percent of prepaid calls have become VoIP, much higher than its corresponding value in 1999. Prepaid VoIP service is causing a significant impact wireless telecommunications as well, plummeting the cost of prepaid calling cards to as low as 1.5 cents per minute of call, with half-cent minutes not too far in the future. Prepaid calling cards have become more affordable to a larger segment of the population.

Major phone service carriers are put in a position of reconsidering the swelling telecommunication market share of VoIP. Some of the phone service providers have ignored the feasibility of VoIP in the past, but are now reconsidering it because prepaid calling services are within the reach of the mass market. Among the emerging VoIP carriers are Delta3, Vocall, and RSL Communications, which are becoming known as Internet telephony service providers.

As the level of VoIP quality consistently keeps on improving, a definitive shift from traditional phone calling towards VoIP routing is guaranteed to take place for all toll calling. For this to happen, Internet telephony service providers need to restore the confidence of consumers that when they use a VoIP prepaid calling card with a more affordable price they will always be able to complete their calls with reasonable level of quality. Consumers are typically willing to trade off quality for savings, particularly with prepaid calling cards. With a prepaid call, consumers can opt when the savings offset the concerns about call quality. Overseas call is one concrete example of such trade-off, particularly calls to high-tariff countries in South America and the Middle East. Emigrants from both regions are large markets in the United States for prepaid calling cards.

Author: Earl Juanico
Article Source: EzineArticles.com
Provided by: Smart cooker

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