- Image via CrunchBase
Google’s foray into VoIP signals the commoditization of voice calls and the probable demise of the public switched telephone network (PSTN). The industry has been on this path for over a decade, but VoIP has made only a modest dent in telephony even with the success of the MSO. Vonage and Skype have their niche following for customers that make frequent international calls. Mobile phones have signaled the decline of the traditional landline, but indoor coverage made it necessary for most people to keep their landline. Femtocells are not seeing enough momentum yet to see a large movement away from the landline.
Google, through its brand and new Gmail feature, has the potential to see the complete demise of plain old telephone service (POTS). It has been a long time coming. The cost of a dedicated electronic switching system and the network surrounding it cannot compete against mobile phones and VoIP. Telcos like Verizon, AT&T, and Qwest are still operating vast complexes of voice switches and the copper network to support them. Every year they spend a few billions of dollares to maintain them while revenue from the service decreases. They would just as soon retire this network and move customers to mobile phones or VoIP, but public utility commissions (PUC) are loathe to allow them to retire the network for public safety and affordability concerns.
Image by Getty Images via @daylife
POTS is reliable. It is powered over the network so it still works when the power does not. You can still call for help even when you do not have lights. Then there is the cost of asking the elderly and lower income households to switch. VoIP typically requires a broadband connection which alone costs more than basic POTS. One way around the issue is very similar to what the over-the-air broadcasters did with the switch to ATV. The cost of the terminal adapter to go from digital to analog can be subsidized through the Universal Service Fund. That solution can work for urban and suburban areas but not rural where digital signals cannot travel as far as analog telephony signals.
Back to Google. Google has integrated voice telephony with two items people use most: e-mail and cell phones. These two things are tied to a person and not a location like POTS. A telephone only supports one communications media: voice. Most people under 50 communicate via e-mail, SMS, IM, and video not just voice. Google’s integration allows for a person to now utilize all these media in one place for little or no cost. The telephone cannot compete especially with its monthly service charge. Gmail/Gvoice/GTalk is the unified communications platform for residential users. Microsoft (MSN) and other competitors will certainly follow with their own product offerings. These providers will most likely adopt a revenue model similar, but much cheaper, to the wireless carriers leading to further integration with wireless services.
- Image by doegox via Flickr
Residential unified communications will be the nail in the coffin for POTS. Telcos will push PUC to retire the PSTN in urban and suburban areas where broadband and wireless penetration is almost ubiquitous. In exchange for this concession, they will offer to redirect the capital investment to the broadband network. Rural areas will still be challenged in its ability to retire the PSTN due to lack of broadband and reliability. Communities that build their own broadband networks can follow the same path as their urban brethren. Service providers can offer a unified communications service right along with the broadband service or let the customer use Google, Microsoft, or other service provider.
The integration of voice into Gmail may at first seem pretty trivial, but it is that unifying aspect is extremely powerful. A single media device such as that old black telephone on your table just cannot compete with the way we communicate today. I have been using Google Voice since the GrandCentral days. Today it allows me to give a customer one number and guarantee that I can receive their call if I wish. If I am unable to take that call at that time, I will read the voicemail transcript and either send them a SMS or e-mail message back. Later I can even call them if I see that they are available. The good thing is that I can do all of this from my computer or cell phone for almost free. All of this integration is making me rethink the need for my fancy $28 per month VoIP plan that allows me to call for free to 25 countries.
By Stefanie Hoffman, CRN
Google (NSDQ:GOOG) seems to have struck a chord with its new VoIP calling service delivered via Gmail.
“Over 1,000,000 calls placed from Gmail in just 24 hours,” according to a Google tweet.
The new calling service, which was made available to users in the U.S. on Wednesday, enables Gmail users to call each other for free from anywhere in the U.S. and Canada. Eventually, users will be able to make inexpensive calls to other countries around the world ranging from 2 cents to $4.99 per minute.
The VoIP service uses Gmail as an interface, and users can essentially call each other through their computers. Users also have the option of integrating Google Voice, and can call both wireless or land line phones.
The new Google service markets itself as an attractive alternative to making expensive long distance calls, registering for a Skype account or even taking the time to put a phone up to your ear.
To bolster its recent launch, Google will also be installing old fashioned phone booths in airports and universities around the U. S., where users can pick up a handset that looks like an old fashioned dilatory phone and make a free call to anywhere in the country or Canada, according to CNet.
