Newsletter #99 SPIT on VoIP

Created on 15/09/05

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Our last newsletter (17th August, 2005) was "Podcasting: What The Heck Is It?"
This article is based on one that appeared in the September edition of Business to Business.

Previously I have talked about VoIP (Voice over IP) and why it was important. Just a quick reminder about what VoIP is:
" ... the ability to send voice information digitally in discrete packets rather than via the circuit-based protocols of the public switched telephone network (PSTN) run by telecommunication providers. In simple terms you can make telephone calls using an Internet connection."

According to Jupiter Research some 400,000 US households used VoIP at the end of 2004 but they expect this to balloon to over 12 million by 2009. Although VoIP promises inexpensive phone calls to anywhere on the globe, there is a dark side called SPIT - Spam over Internet Telephony.

The combination of calls that are virtually free and a labour force, in places like China and India that are paid low rates means that developed countries will become targets. US-based Burton Group analyst Fred Cohen points out that they don't even need to be high ticket items. Using some of his math:

• Say 90% of calls drop off in the first minute
• 5% engage for a couple of minutes but then drop out.
• 5% result in a sale that takes five minutes to close.

If calls cost only US$0.01 per minute and the caller is being paid say US$1 per hour, each sale only has to make a profit of $0.67 to break even. With such a low cost per call, SPIT techniques can be used to sell low cost items that retail for US$5-$10 each.

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One of the more interesting aspects of the SPIT scenario is that it could actually drive the adoption of VoIP. VoIP phones have a wide range of software options that allow, amongst other things, the ability to create whitelists that effectively block unwanted calls. The POTS (Plain Old Telephone Service) phones that most people have are unable to provide these features.

Of course VoIP is not exactly big telecom's favorite subject as it is a factor in driving the value of overseas calls towards the floor. Pure VoIP operators like Skype are now powerful competitors. As the volume of SPIT grows will the big telecommunications companies seek to restrict all overseas VoIP from entering its network?

The cost of making a telephone call will continue to reduce steadily, changing the way the medium is used. Already local telemarketers are an annoying feature of having a landline; what happens when the telemarketers are global? Perhaps:

• More people will own a mobile phone only as in many countries callers have to pay something to call you thereby dissuading spammers.
• Everyone will have caller ID at least so that suspect calls can be consigned to voicemail.
• There will be a greater uptake of VoIP phones with more sophisticated features including email-like filtering options that automatically delete or quarantine suspect calls.
• Families will turn off their landlines during the evening (prime telemarketing) hours and rely on friends and relatives knowing their mobile numbers.
• The humble fax machine will be another prime target, hastening its demise.

"..like a laser entering a crystal, the influence of the Internet refracted immediately and colored everything it touched." James Daly.

Newbies

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Power Users

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For previous tips visit the Power Hot Tips page.

BuzzWhack is a glossary of computer and business buzzwords, from corporate speak like scalable and thought leadership, cynical speak like Barneyware (anything that has no substance) to techie ones such as pebcak (problem exists between chair and keyboard). http://www.buzzwhack.com

LiveScience.com has the occasional funny title and often a different take on science subjects but there is no denying the site has some great science-based articles. For example: "The Real Crime: 1,000 Errors in Fingerprint Matching Every Year" and "Communication Breakdown: From 9/11 to Katrina". http://www.livescience.com

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Best wishes

Alex Garden

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