Telephone calls made over an internet connection are predicted to be the next revolution in telecommunications. Cheaper broadband costs and user friendly software is helping users to start making Voice over IP (VoIP) calls, with a number of companies offering products.
The BBC News website's business editor Tim Weber is a Skype user, while acting technology editor Darren Waters has been getting to grips with Vonage.
Skype looks like an instant messaging program
We've got a new word in our family dictionary, "to skype", as in: "we can skype this evening", or "I'll skype you now".
The ugly word stands for a little piece of software called Skype, which allows computer users to make calls over the internet using "peer-to-peer" technology.
The beauty of it: the software is free, the sound quality of calls is outstanding, and if the other party has Skype as well, calls to the other end of the world won't cost a penny.
I use Skype mainly to call my parents, who don't live in the UK. Every three months I used to get a painful reminder of the distance between us, when British Telecom sent me my quarterly phone bill.
But half a year ago we downloaded and installed Skype at my computer and that of my parents, and our phone bills have been slashed.
How does it work?
To use Skype, you need a computer (Mac or PC), an internet connection (ideally broadband), and a microphone headset hooked up to your computer - although the external speakers and microphone that come with most modern computers will do fine.
Skype looks a bit like an instant messaging programme, like Windows Messenger.
You have a list of contacts - either other Skype users, or a phone number.
To call someone, you select (or add) the name or phone number and click on a green button.
After a few seconds you hear the phone "ring" ... the other person answers and you have a normal chat "on the phone".
Conference calls are easy to set up, and instant messaging is possible, too.
The sound quality is at least as good as a normal phone call if you use the speakers/microphone combination, and excellent if you use a headset.
A "call" to a Skype contact is free, regardless of duration and where the other person is based.
When I "skype out" - call a normal landline telephone - in Western Europe, the United States, Australia and a few other destinations, I pay about 1.7 euro cents per minute - much less than what I would pay BT.
Call charges to other countries are higher, but still cheaper than most other deals.
So what are the drawbacks?
Well, for starters you need a computer to make it work - and sit in front of it.
If you've switched off your computer or are off-line, nobody can skype you and you may not be able to hear a call coming in, if you are away from your PC.
There is one remedy, but it is not cheap: Siemens is selling an antenna that plugs into your computer's USB port, and connects a cordless home phone to Skype. And other companies are bringing out phones which plug straight into a USB port.
Twice over the past six months Skype failed me because of "network problems", although they usually went away after a few minutes.
All in all Skype is brilliant, very user-friendly, very cheap... but you won't be able to do away with your old home phone yet.
Vonage launched recently in the UK
The premise of Vonage is simple - plug your existing phone or a second handset into a specially adapted router and start making phone calls over the internet.
Vonage charges £9.99 a month, and for that price local and national calls are all free, while calls to mobiles and international numbers are much cheaper.
Features such as voice mail, call waiting etc are all included in the price.
How does it work?
The monthly price includes a broadband router with two phone ports, which is connected to your existing broadband modem.
You plug a normal phone into the one of the ports on the router and hey presto - you get a dial tone. Vonage also allows you to create a "virtual number" with a UK dialling code, which means people can ring you for the cost of a standard call to that area.
At the moment, there is only a limited number of UK dialling codes to use for your virtual number - mainly the metropolitan areas.
But the advantage is people can call you on a "normal number" and your PC does not have to be switched on in order to make or receive calls.
The flexibility to simply pick up your phone and dial out and receive calls makes Vonage very attractive for people who do not want to be sat at a computer.
The pricing is also very attractive and many people will save money on their calls. Calls to another Vonage user are free - no matter where they are in the world.
The quality of the calls to both local and international numbers is also good.
So what are the drawbacks?
New technologies always bring with them teething problems and I had initial problems getting a dial tone on my phone. Friendly, knowledgeable technical support staff helped me and the support number is free.
It did take more than an hour to sort out and if you don't have any technical knowledge you might be daunted by some of the steps you have to take.
But overall, Vonage succeeds because it takes the PC out of the VoIP equation.
Making free internet phone calls via my own cordless handset feels revolutionary.
Alexander Graham Bell would be proud.
Have you started making internet telephone calls? What are your experiences? Do you think it will transform the way we make phone calls? Read a selection of your views.
Some years ago, I listened to a purported AT&T representative in some TV discussion say that AT&T did not feel "threatened" by VoIP because of "the poor sound quality." I thought then that AT&T needed to fire him and all his like, or AT&T would be gone. Well, AT&T is now divesting itself of their residential long-distance phone interests.
Bob Faulkner, Gulf Breeze, FL, USA
Started using Vonage. Has a buzzing noise during and after the party i'm talking to speaks. It goes away when and after I speak. Otherwise, it's great.
Gil Gauthier, Racine, WI USA
Internet telephone calls are the future but until systems like skype and vonage can work together they seem unlikely to take off
Tim Boardman, Southampton, UK
We are expats and live in Orlando, we started with vonage from home and cut our bills by more than 2/3rds, the virtual number allows all friends and relatives to call for almost free to the USA. We also run a business brokerage and converted 3 lines to vonage, no one realises they are talking over the internet, the quality is first class and again using vonage has destroyed the telephone bill. My daughter now has vonage in the UK and again it kills the bills, so far have no negatives to report
Neil, Orlando, USA
I've used Skype to call friends and family in Australia from my Apple Mac and used my mobile phones bluetooth headset to do it, this untethered me from the computer more than even a cordless phone does. The calls are as clear as speaking to someone down the road, if not clearer. Why pay?
Neil, Liverpool, UK
I have been with Vonage since May, 2004. My 2 lines with unlimited calls to the US and Canada is around $54. The cost savings for my call patterns more than pay for the service. It's astounding. Like the glory days of Napster, I wonder who may want to break this party up?
Bill Ellis, Greenville Sout Carolina USA
I have been using Skype now for about a year and can confirm everything in the article is true. I use it to call a friend in Australia and the sound quality is brilliant. We are both on Skype and therefore doesn't cost a penny, your broadband connection becomes more and more important with these emerging services.
I also use Skypeout to make calls when we are not both on the PC. It is very easy to sign up to use this service and much cheaper than BT or the phonecard companies can offer. Highly recommened.
David McRoberts, Motherwell, UK
What about BT Bluephone... Surely it trumps both of these as it gives the customer the ability to use their mobile phone on GSM when out and about and then when they enter their home it automatically switches to become an 'internet' phone! No plugging in, no PC etc just seamless automatic handover on a mobile!
My brother lives alone in Dubai. Email has enabled us to stay in touch, but Skype has taken it a stage further - we can chat for an hour and it doesn't cost a penny. That's progress!
Denis, London UK
I've simply been using MSN Messenger audio facility to talk to my parents for some time now. As long as both parties in have a fast internet connection, a microphone and speakers, it's just as good as talking on the phone but without any cost.
William Summers, Oxford, UK
I have been using Skype for over a year now. As soon as i saw what it could do i was downloading it! I think this kind of concept will revolutionise voice communication but it will take a while to become reliable and secure enough before it can be mainstream. Meanwhile, phone companies better look out, because free calls are coming like it or not so they better get ahead of the game to stay in it!bring on the internet revolution!
I use Firefly from the Australian freshtel.net - also free and simple to use. I hope there won't be too many competing systems: compatability would make life on VOIP much easier.
The sound quality of Skype calls is outstanding - my foot. A friend of mine using Skype called me the other day and he sounded as though he were on a mobile somewhere distant, instead of elsewhere in London. Furthermore whenever I said anything there was a disconcerting echo of myself down the line.
Richard Lim, London, UK
My wife and I use MSN Messenger to converse with family in Australia. Sometimes the connection gets a bit dodgy and slow even though we both have broadband, but generally it's good because we can see and hear each other as well as type little comments.
Chris Hurst, Dartford, Kent
This really is nothing new. Online gamers have been using software such as TeamSpeak and Ventrillo for many years, enabling team members scattered across the globe to speak to each other in real time, free of charge. All you need is an internet connection, the free software and a call centre style headset. And needless to say, half the time people are happy to get together for a large group conversation, without even playing a game.
If this method of communication is catching on outside the network gaming community, it won't be the first time a group of supposedly antisocial nerds have revolutionised the way ordinary people interact.
Sy, Manchester, UK
The internet is really putting power into the hands of the people. I've been using a webcam and sound for while and, although it isn't perfect quality, it seems almost like being in the same room. This is definately the future. Just need to increase the broadband now to get full screen quality images and perfect sound and the telephone will be a thing of the past.
We have both a UK and German VoIP phone for business and private reasons. The quality is excellent and the phone bills almost minimum. I even phone Australia and NZ for practically nothing. Wouldn't be without them now.
Penny Archer, Dubai, United Arab Emirates
Why pay more for expensive LD calls, when you can do it over the internet on a PC free of charge? The computer will pay for itself with the money saved on call charges alone!
Simon P, Surrey, UK
I've been using Vonage here in the US for almost a year. As a fully self confessed Techno Geek I'd used a couple of the PC based systems before trying desperately to force them on my totally unconvinced family. It was only when I tried Vonage that I passed 'the spousal transparency test'. With Vonage it has been so transparent I've been able to port my number over and disconnect the regular landline, all without a murmur of discontent from my long suffering wife!!
Peter Hart, Rohnert Park CA, USA
It all sounds great but can it really replace the telephone?
What happens in an emergency when there are "network problems"? Wait a few minutes and try again? What if your PC wasn't on? I wouldn't risk it.
Essentially IP is not a technology created to carry voice, it seems like square pegs and round holes to me.
Gary Herd, Surrey
Alexander Graham Bell would be furious that this technology has been with us for several years and the average 'Joe' is STILL being charged an exorbitant amount of money by BT.
Gavin Bardon, Oxford, UK
If BT turned all of its (now relatively useless) phoneboxes into wireless access points it could introduce a wireless VOIP handset. Imagine it - unlimited free mobile calls for £9.99 a month!
Nick, London, UK
I set up Skype this week-end and have been chatting to South Africa, for free, for hours. With family so far away, this little bit of free software, will make a great difference to how I communicate with family and friends and save money on landline phone calls as well. Sorry BT but your profits are going to fall.
Skype is nothing new, for people like me, who regularly use MSN/Yahoo messenger services to keep in touch with friends and family abroad. I realised that paying £100 a month on phone bills to keep in touch with my parents in india was a bit on the higher side. I have now invested in a PC for my parents in India, and I have got a connection here, so we can chat as many times as we like, and as long as we like. Add a webcam to it, and you can do a decent video conferencing too!!
I am a current user of Skype, it allows me make cheap international phone calls, but the sound quality was bad sometimes that other side complained out not hearing me clearly with sound pauses, and i think maybe that was due to the network problem. I am agreed Internet telephone is cheaper on calls but sound quality really is a big big issue that needs to improve if it was to become popular.
Rebecca Rao, Nottingham
We have used Skype within my company for about 6 months or so. It has been great for a large user of IT, and has saved us significant costs for employee to employee calls, (instead of mobile).We have had conference calls between UK and Australia for no cost! Fantastic facility......
Dr. Neville Prior, Braintree, UK
I use Skype to keep in touch with my sister in Japan. It's great. The downside is having to keep the PC on all the time and random people around the world phoning you to chat! You don't have to accept calls which is good and you always get to see who's calling.
Al, Manchester, UK
I have just installed a Rapidbox device from Rapidvoip which lets me use any of the phones in my home either through the PSTN network or through Skpye (via my PC). The box costs $50, no ongoing charges - the only (slight) downside is that my PC has to be on for me to make calls via Skype.
I look forward to Skype shaking up the whole telecoms world...
Richard G, Winchester
I've been using Vonage for over a year and a half now to talk with my fiancee - alongside the landline in my flat, I've got a Vonage phone that has a US number. Being able to make free transatlantic phone calls has made being in a long-term, long-distance relationship much, much easier to bear, never mind helping us with our wedding preparations!
Dan, Cambridge, UK
I use my broadband connection and a web cam to speak to people and see them all over the world for nothing but my normal broadband cost, once people wake up to this the big telephone providers will be shaking in their boots
John M, Scotland
I have been using Skype for about a year now and I have certinaly seen a reduction in my phone bill as I use it mainly to call my girlfriend in Mexico. Though I can usually get great quality it cannot be guaranteed and therefore the phone is always a good backup. Using it with MSN Messenger also you can use a webcam and basically have a free global videophone. Excellent. Keep Skyping!
Richard Beatson, London
I've been using a piece of software called iChat, which has been available for free for the latest version of the Macintosh operating system (Mac OS X 10.3). In my opinion, this is the best way to do internet phone calls, because you do not have to have the application always open in the background. You can set your status to "Available" in the top menu bar, and if someone calls you up, the iChat program opens up automatically. There is one drawback of iChat though: You have to both own Macintosh computers.
Thor, Leeds, UK
I use skype all the time but I have a bluetooth headset and a decent bluetooth 'dongle' plugged in to my USB port on the PC. This allows me to be away from the PC and walk about the house whilst having a good chat to my dad in South Africa and its truely handsfree!
Roger Mc, london
Having been using Skype for some time to make calls to ordiary phones world-wide. It works and is cheap. Once VoIP is available on handsets and is easier to use its impact on conventional telecoms will be immense. The next step for Skype is call-in avoiding roaming charges when travelling.
Vivian de Mesquita, Paris France
I have a 'normal' telephone line and I also have a VOIP line with BT. However, it is with MSN Messenger that my fiance and I have conducted our relationsship, I am in the UK and she lives in Florida, USA. We talk and see each other on cam. Surely the way forward is to actually see the other party, not just talk to them.
Martyn Twidle, Kings Lynn, UK
When phoning abroad, Italy unfortunately has extremely expensive telephone tariffs and there doesn't seem to be much competition to the national phone company Telecom Italia. I would spend maybe £3for a 40 minute phone call to my parents back in the UK. Since I downloaded Skype, I now pay a mere 2 Euro cents a minute, which amounts to 60p for 40 minutes. Web-based telephone applications will hopefully cause monopolising companies such as Telecom Italia to seriously reconsider their tariffs and reduce the costs of calls for everyone as a result.
Chris Huff, Bologna, Italy
I am working on a 3 month assignment in Sydney and use skype and skype out for about 3-4 hours a day calling the UK and other places. It costs me about 1 euro a day! Totally revolutionary, especially for business. Now all they need to do is the video part!
Tried Skype recently - very impressed with the clarity of the call (and, of course, the fact that it is free between Skype users). The delay on the line is similar to what you would experience ringing New Zealand and I am informed you really need a broadband connection for it to work satisfactorily. In all, a great service which deserves to give BT a run for its money.
Dave, Swindon, UK
We've got IP phones at work and they echo what you're saying with about a half second delay. It's very difficult to concentrate when you keep hearing yourself rambling on!
Felicity, Carlisle, UK