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You may have heard of VOIP (Voice over IP), or Internet telephony.  It means using the Internet to carry your phone calls.  Vonage, inc, a US start-up doubled its customer base from 100,000 to 200,000 in the first six months of this year and they just got another round of funding.  They will be a very hot IPO when they go public. 

Something is obviously going on.

How does it work and why?

The mechanics are like this.  First you need a broadband connection.  You plug in a special kind of telephone, sign up with a service provider and hey-presto.   The phone works and looks like a regular phone.

There would seem to be a lot of benefits:

• If you were to believe the Guardian (last Thursday) the quality is as good or better than a regular phone, and the cost is half that of BT. 
• All the service providers offer free extras such as voice mail, with messages emailed to you as attachments if you want.
• Think of a phone that you can plug into any connection and have your phone calls follow you
• Many service providers offer a 'virtual PBX' service.  This means that within your group of users, you can have a single receptionist, transfer calls, conference calls and so on.  The difference from a normal internal telephone switch is that the extensions can be on the other side of the world.
• There are endless possibilities for integrating digital telephony with corporate systems. 

So why not plunge in?

I have tried VOIP with a couple of providers, and I have to say there are one or two issues.  (If you don't understand IT doublespeak, 'Issue' is doublespeak for 'Problem'). 

I started with PipeMedia.  (www.pipemedia.com) This is the cheapest service with calls to the UK, Europe and the US all around a penny a minute.  Calls to UK Mobiles 12.5p per minute.  I didn't use a special phone, but purchased an adaptor for a regular phone instead. This costs around £60.  Pipemedia charge £3 per month and you get an 0845 number. 

When the box arrived it had a US phone connection and no manual.  I found their web site and downloaded the manual.  Then I had a US/UK adaptor lying about and used this to get started. 

Setup was fairly horrendous and I don't recommend it to the technically challenged.  Their support guy was very good and eventually he logged into my adaptor and set me up.   The 0845 number didn't work but their technical support guy diagnosed (correctly) it was my US/UK phone adaptor.  There should have been one shipped and he sent one after a couple of reminders.

Initially there were call quality issues.  Calls would break up and in some cases drop out totally, and there was an annoying clicking on the line.  When I replaced the UK/US phone adaptor these problems all went away. Quality was as good or worse than a regular line and people on the other end sometimes complained of poor voice quality.  Generally it was reasonably reliable and of comparable quality and reliability to a mobile phone.

I switched to Gossiptel (www.gossiptel.com/).  They get a lot of mentions in the press, but my experience was not too good.  Maybe I am unlucky but quality on the few calls I made was worse that PipeMedia, and my third call cut out mid-call.  I bought £5 of calls but now with £4.70 left I am not using it. 

There may be something with our setup that needs changing.  As we didn't buy the adaptor from them they were not able to help much.   

So far I can say that for personal use where the odd issue is acceptable, PipeMedia gives good value for money, but for business use the question is open.

Any other problems?

There are problems interfacing with the UK phone system with both providers:

• Calls to some 0870 numbers don't work at all
• Calls to a number for someone who had moved got an engaged tone instead of the recorded message telling me of the new number
• A call to someone in Sweden gave a message that the phone was busy, in fact on the regular network I discoverd that the number was actually unobtainable.

Why is it working over there but not over here? 

So if Vonage is going like a train in the US, why is VOIP running off the rails over here?

1. Vonage have obviously packaged the technology much better.  One of our US sales guys has it and he had no big technical problems in setting it up.
2. Vonage offers fantastic value.  Their packages start at about £9 per month for 500 minutes of calls throughout the US and Canada and transatlantic calls for less than 2p per minute.

It seems to me that the problem with the UK providers is that they have made some very basic mistakes:

• They have not given enough focus on helping users get set up.
• They are pricing themselves to be cheaper than BT - they should be cheaper than One-tel. Some of the providers are more expensive than One-tel - why would anyone opt for that?
• They are not focussing enough on quality. 

This autumn Vonage opens for business in the UK.  You can expect them to steamroller their way in without much competition.    Sad.

Still want one - check this out.

If you want to be the first kid on the block with an Internet phone you might want to check the list of providers and the forum at www.viop.org.uk.