Phone service on the Internet hits 1-year mark

Happy birthday VoIP. Voice Over Internet Protocol (VoIP), or Internet phone service, is celebrating its first birthday in Korea. Although Internet phone service started in the late 1990s with Serome Technology’s Dialpad, commercial service only started last year. In August of 2005, Samsung Networks Inc. launched a service that enabled both receiving and outgoing phone calls through an Internet connection. Commercial Internet phone services usually use a phone number that begins with the digits “070.” Other major telecom operators soon joined in the VoIP race, including companies such as KT Corp., Hanarotelecom Inc., SK Telink and LG Dacom Corp. In the initial phase of Internet phone service, service operators had difficulty attracting subscribers because rates for local phone calls were more expensive than fixed-wire or cable telephone services. Then, Samsung Networks created a fixed rate of 39 won, about 4 cents, for every three minutes for all phone calls within Korea; 55 won per minute for countries such as the United States, China and Japan; and 11.9 won per 10 seconds for calls made to cell phones. “Compared to fixed-line phones, you could save up to 85 percent on rates of long-distance domestic calls, 96 percent on rates of international calls, and 18 percent on calls made to cell phones,” a Samsung Networks spokesman said. Because of its new rates, the company was able to garner 72,000 subscribers as of late July. In addition to inexpensive phone rates, Internet-based services are also attracting customers. Options include short message services, Internet fax and voice messaging as well as caller ID and some 200 other features. LG Dacom’s special features include conference telephony and short sentence transmission. KT focuses on visual and data transmission. Analysts expect the Internet phone market to become more active in the second half of 2006 due to the entry of new players, such as Korea Cable Telecom, which is seeking to begin Internet phone service using its cable TV network. Companies plan to release state-of-the-art terminals such as wireless Internet phones and phones designed for video conferencing. Market researcher Korea IDC expects related markets to grow to 1 trillion won by 2009. by Suh Kyoung-ho