The history of VoIP or Internet Telephony dated back to 1995 when a few hobbyists developed software for sending voice data packets over the Internet, so they could make unlimited long distance calls free of charges. Early VoIP were with poor sound quality and connectivity. Besdies, it required both callers to have a computer equipped with the same software, the same sound card and the same microphone. Today, the quality of voice over IP now is crystal clear and rivals the one of traditional telephone. The VoIP services from leading provider Vonage are subscribed by over one million users by 2006.
VoIP landscape changed drastically when Cisco and Nortel entered the VoIP market with hardware equipment that allowed easy switch between standard phones and the voice data packets on the Internet in 1998. The new hardware made the VoIP hardware less computer dependent.
VoIP finally took off in 2000. It has become a mainstream alternative to standard telephone service since then. The growing acceptance of VoIP in both business and residential phone use is evidential in the phenomenal success of Vonage, a major player in VoIP market today. Vonage offered VoIP service to business communities in 2001 and signed its first residential customer in 2002. Year 2003 was marked by the first platform for 911 calls on VoIP software. Between 2004 to 2005, Vonage launched VoIP service in Canada, Puerto Rico, United Kingdom and other European countries. Vonage phone service charges a monthly service fee, and calls (local, long distance or international) are technical free or unlimited. With more than one million subscribers this year, Vonage VoIP continues to offer new services and plans to meet the needs of both business and residential markets. Some small businesses have started to take the advantage of the flat fee of VoIP plans. They now have an alternative to 1-800 numbers to interact with their customers.