VoIP Goes Mainstream: AOL Launches Internet Phone Service

This IDC Flash discusses AOL's rollout of its consumer VoIP telephony service. The product marketed as AOL Internet Phone Service will be available in 43 markets throughout the United States, with additional cities to follow later in 2005. In offering IP-enabled voice services, AOL will be testing how well the notion of convergence plays in the mass market by offering a set of integrated voice, data, and messaging services. The idea of leveraging a broadband connection to deliver voice services has caught the attention of the consumer market, but much of the current base of consumer VoIP subscribers consists of early adopters and those interested in making cheap phone calls. The challenge for all VoIP service providers will be to take a product that has been successful with early adopters, technophiles, and cost-conscious consumers and turn it into a simple yet robust solution that can be sold to the mass market. Although AOL will face challenges from cable MSOs, ILECs, and virtual network operators such as Vonage, the company has a proven track record in taking technology and adapting it for mainstream use.