Global Village Voice

1999-04-12

BT is launching a voice-over-IP service. Read this statement, now read it again. British Telecom, the organisation providing telephone and dial-up services to the vast majority of the British public, is launching a service which enables its users to communicate via the Internet at the price of a local call, wherever in the UK they may be situated. Admittedly, the service is only open to customers of BT's own ISP. Also, it is known that Internet telephony still suffers from quality issues remeniscent of patching a call to a less-advanced foreign country ten years ago. But still, this move by BT is a milestone in the inexorable rise of the Internet. What we are seeing is the convergence of technologies and this has several implications. Given BT's acceptance (and endorsement) of voice-over-IP, the question raised is that of relative cost. Subscription to BT's ClickFree service is now free, and two BT ClickFree subscribers can call each other at local rates as long as each has a PC. In other words, users of telephone handsets are going to be discriminated against – these unfortunates will still have to pay the price of a long-distance call. This overhead will become difficult to justify as quality improves and hence more and more people start using the Internet for voice calls.

BT, like other telcos, has already responded to concerns on call pricing, with the price gap between international calls and local calls decreasing. This is fair enough, as most of the costs of a call are derived from enabling a connection to the local exchange and subsequent billing of the call. BT will be keen to keep its revenue streams open for as long as possible. Ultimately, though, the costs of both national and international calls will have to bow to the pressure of the Internet.

(First published 12 April 1999)