Talking on the internet - it's the coming thing

The number of internet calling minutes we make will go through the roof in the next few years as VoIP (voice over internet protocol) services gain wider acceptance.

There's already a good deal of competition in this area. First came Slingshot with its iTalk service, then Woosh with its wireless telephony set-up. Free internet-calling provider Skype has gathered a strong following.

Auckland internet provider and tolls operator WorldXChange is the latest VoIP provider, through its Xnet VFX service, which has been in development for two years.

The deal all these services offer - stop paying Telecom its $42.20 a month line rental and use a cheaper VoIP service that uses your internet connection to connect you to the telephone network.

It's almost within reach, as the regulation imposed on Telecom this year makes such a scenario possible for Telecom's competitors. It's just a matter of time.

Local calls are free using VFX, and if you know other people around the country on the service, calls to them are also free. Elsewhere, the prices are competitive - 5c a minute to landlines nationally and in the US, Australia, the United Kingdom and many European countries.

Calls to local mobiles cost 30c a minute. Those prices are in line with the cut-price calling services of several providers.

You'll get cheaper calling using Skype's SkypeOut service but the calling quality isn't as reliable.

The advantage with a VoIP service such as VFX lies in the quality of service guarantees provided and the fancy call management features available.

Using a web browser, you can log in to VFX to build the phone service you want. Set-up call waiting, transfers, three-way conference calls, call forwarding and your voicemail on the internet. Access is fast and easy. If you have a phone with a digital display, VFX will also accommodate caller line identification.

The modem WorldXChange uses, the WAG54GP2, isn't cheap at $290, but it's one of the better wireless routers, and with four ethernet ports, two phone ports and support for 802.11a, b and g, covers all the networking bases.

It's also designed to work with ADSL2, the higher-speed broadband network infrastructure that Telecom is adopting.

A simpler device, priced at about $130, will be available this month for those who already own a router.

Setting up the wireless router and phone service was simple. The Linksys user interface is intuitive and the pre-configured WorldXChange connection works as soon as you plug your home phone into one of the two available ports. The complicated network set-up in my house, which shares one internet connection among three ethernet-supplied desktop computers, four wirelessly served laptops and a print server, caused some networking headaches that I tried to resolve by resetting the Linksys modem.

Bad idea. I wiped the router's phone settings, killing the calling service. WorldXChange's helpdesk soon put me back on track. The people on the phones know their product well, and can access the router remotely to check settings.

The calls I made were, by and large, of good audio quality. Only on international mobile calls to Britain did I experience significantly reduced calling quality. Calls to landlines in Britain, Hungary and the United States were almost as good as calling from regular phones, comparable to a good mobile phone connection. The speed of your internet connection doesn't have a major bearing on voice quality as the bandwidth required to carry voice isn't great.

WorldXChange will issue you with your own 950 prefix phone number, but you will be able to use your existing phone number by paying a monthly redirection fee payable to your existing provider.

The introduction of phone number portability next year will allow you to take your phone number with you without having to pay for redirection.

With the absence of naked DSL services in the market from Telecom's competitors, many phone users would baulk at the idea of paying for a VoIP service on top of their monthly Telecom rental.

But VFX is still good value, because WorldXChange has promised to waive the $11.25 a month subscription fee until April next year, by which stage naked DSL services should be available from internet providers.

They had better be, because charged on top of the monthly Telecom line-rental fee, the economics of subscription-based VoIP services don't make sense.

WORLDXCHANGE XNET VFX

Pros: Competitive calling rates, reasonable calling quality

Cons: Expensive set-up costs; naked DSL and number portability not yet available

Price: Linksys wireless router $290 ($11.25 a month calling subscription from next April)

Herald rating: 7/10