Companies Switching To Web Phones

Illustrating one of the dramatic changes in telecommunications, a new report predicts a big increase in companies that are slashing their phone bills by switching to Internet-based calling systems.

In-Stat/MDR estimates that while only 2 percent of all U.S. companies are using Internet-based phone networks, the figure will hit 19 percent in just four years.

Internet-based networks, which convert voice conversations to packets of data sent much like e-mails, offer more features than traditional systems. They also tend to incur lower per-minute rates and let companies make better use of existing data networks.

Although the technology already is fueling inexpensive consumer phone services and helping cable companies offer telephone service, the sound quality of such calls remains a concern for many businesses.

But just about anyone who makes a long-distance call probably has had part of it carried by this "Voice over Internet Protocol" technology without even knowing it.

In-Stat/MDR predicts that the amount of international long-distance traffic routed this way will increase from 19 billion minutes at the end of 2002 to 277 billion by 2007.