By Stefanie Olsen and Marguerite Reardon
Tuesday, September 27 2005 09:01 AM
URL: http://www.zdnetasia.com/news/communications/0,39044192,39259103,00.htm

Mark Bruk, a frequent business traveler, always packs a Plantronic headset with an ear bud and microphone so he can plug into any computer and make phone calls on the cheap.

Once he finds an Internet connection, he only needs to download a piece of software, or "softphone," to make the call using voice over Internet Protocol, or VoIP, technology. The software, created by his own company, takes about 30 seconds to download and, presto, he's making a call.

Of course, Bruk, chief executive of VoIP provider CounterPath Solutions, drinks his own Kool-Aid when it comes to phone technology. But he's also a cutting-edge sort: He's using broadband Net access and lightweight software to save big money on his telephone calls.

Bruk, whose company supplies audio technology to Yahoo, argues that it's only a matter of time before people across the country will be able to use VoIP-enabled softphones on a mobile device. Web surfers are already warming up to PC-to-PC voice dialing in popular instant chat applications from America Online, Yahoo, Google and Microsoft's MSN.

The big question, however, is how exactly do all these companies plan to deliver a VoIP service beyond the PC and onto some sort of mobile device?

"Will it be their own network and phone--or is it a branded service with someone else's equipment?" asked Scott Urlick, president of RedTie, a media technology consulting company in Seattle.

The industry has been buzzing about the future of VoIP since eBay announced it would spend US$2.6 billion in cash and stock on the acquisition of Skype--the pioneer of consumer software for voice calls on computers. Adding to the frenzy, Google also has entered the VoIP market with an instant chat and voice application, and it's testing a Wi-Fi consumer service that could help it deliver phone and information services to wireless devices.

The Skype buyout shows that technology executives are betting that consumers will soon change how they make phone calls, reducing the need for a phone service from a traditional provider such as Verizon Communications or SBC Communications. VoIP essentially turns telephone calls into just another piece of software running over an IP network.

Rumors are already swirling that Google is developing its own software and hardware for a Google phone. It's not too difficult to imagine a piece of software as a plug-in for Apple Computer's iPod--turning it into the iPhone--or a personal digital assistant becoming a PDA-phone.

In Korea, Samsung sells a 3-megapixel digital camera that appears to be a normal digital camera, but when a person slides the back of the device down, there's a keypad for making calls. Ubistar, another Korean company, is selling memory sticks that store from 64 megabytes to 1 gigabyte, preloaded with a softphone. It comes with a microphone and earphones. Bruk, for example, carries a USB (universal serial bus) key loaded with his company's software so he can plug it in to any computer and avoid an Internet download.

Jeff Black, founder of TalkPlus, a Menlo, Calif., start-up, said he is talking to all the portals about branded offerings for consumer VoIP services. TalkPlus sells a software service with features such as 10-person conference calling. It offers privacy controls that let people block business calls after a certain hour but allow personal calls.

Credit Skype with lighting a fire under this market. In just two years, roughly 53 million people have downloaded Skype's free software to their PCs. The softphone lets people talk to other Skype users anywhere in the world via the Net for free. And more than 2 million people pay a monthly fee to dial from their PCs to cellular or landline numbers.

With products that support it becoming more common, VoIP is starting to pick up steam. According to an Infonetics Research report, 40 percent of customers with broadband Net connections will buy voice service by 2008. This means that the total number of VoIP customers could jump to 24.3 million, from 1.1 million last year.

The softphone market is growing along with VoIP, but it's still young. There are roughly 200 million fixed phone lines in the United States, but only 2 million VoIP customers.

Internet companies such as Yahoo, Google, America Online and EarthLink have already dipped their toes into the market. Last spring, Yahoo added improved VoIP calling to its Yahoo Messenger. In the summer, EarthLink launched the beta of its Vling Internet calling service. Google last month debuted Google Talk. And last week, AOL announced it would be offering its VoIP service called TotalTalk.

AOL's TotalTalk will essentially let people replace their traditional landlines. It has advanced communication features, such as unified voice, e-mail and instant messaging, and call-management capabilities such as call waiting and caller ID. It even lets people make and receive calls on a home phone line from anywhere users have access to AIM.

Softphones have become popular in corporate networks, especially among road warriors who travel for business. Softphone clients are sold as part of a larger corporate IP telephony solution from companies such as Cisco Systems, Avaya, Siemens and Nortel Networks.

The consumer market, as is often the case, could be next. But before softphones can really become widely deployed, the technology will have to be accessible to more devices than just a laptop.

"People don't always want to boot up their computer and put their headset on to make a phone call," said Stephen Howe, vice president of voice for EarthLink.

In the next six months, EarthLink plans to make its softphone client compatible with operating systems other than Microsoft. Users will be able to download it to devices running Java, Apple Computer's OS or wireless operating systems.

Consumer electronics makers also are working on devices that have enough memory and processing capability to handle softphone clients. Hewlett-Packard's iPaq handheld, for example, can accommodate softphones. And a Dublin, Ireland-based company called Cicero Networks makes a softphone that also handles calls over both cellular and Wi-Fi networks.

EarthLink is currently testing a free VoIP service that connects customers to VoIP phones using an open-source technology from a small company called PingTel. EarthLink's Vling service only allows users to call people on the Vling network. Like Skype before it, with its SkypeOut service, EarthLink hopes customers will be willing to pay for public switched telephone network connections.

But Vling and other VoIP services from portal providers are more than just voice. Customers can also connect to e-mail and instant messaging. And more than a few companies hope there's a gadget market to go with them.

"There's a huge market for small devices that give you access to information you need," CounterPath's Bruk predicted.