7 Issues Holding Back VoIP + IP Telephony

Depending on whom you ask, VoIP and IP telephony has probably been around for nearly a decade - the same amount of time that the Internet has been publicly available. And yet, in that time, it has a relatively small penetration in the telecommunications market in terms of consumer (business or individual) use. While the number of VoIP subscribers worldwide is increasing, especially amongst cable VoIP services, there are some issues holding back wider adoption. (These are purely opinion, based on some facts. Feel free to disagree.)

1. Lack of knowledge on the part of the consumer. Nearly ten years for a technology and not many people know about it. Or trust it, in some cases.
2. Too many options. A browse through this site will show you how many options there are for VoIP service. There really are far too many for the average person to make a comfortable choice, without a fair bit of research. And consumer education is only just starting.
3. Too many providers. The startup costs are negligible, compared to traditional telephony. So there are new providers popping everywhere. (I have at least a dozen soft phones installed on my computers.) Not all of the VoIP providers in operation today will be around in, say, 2010 - when the next tech bubble will likely burst, as has happened at the beginning of every decade since at least the 1970s. Telephone service is a utility; VoIP service has yet to achieve this status. To achieve this status might mean that, ultimately, only a few “trustworthy” players remain in a few years. Consumers might feel this way subconsciously and thus be reluctant to switch to VoIP.
4. Uncertainty about companies such as Vonage, who have been crucified in the stock market. This kind of goes hand-in-hand with “too many vendors”. But Vonage probably has the a wider presence in the minds of consumers that are not as tech savvy as say, a Skype user. And if they’ve had a bum ride, consumers might be wondering whether to trust the options, if they even understand them.
5. Call quality, or lack of, in some cases. Call quality varies wildly, subject to many factors. Traditional telephony has dedicated lines and a hundred years of technical innovation and improvement. IP telephony will not take that long, but it will take time for quality of service to not only rival PSTN-based service, but to surpass it on a consistent basis.
6. E911 emergency service inconsistencies. Just a guess, but families with children or elderly members are probably far less likely to choose VoIP over regular telephony if emergency services are unavailable. It is a problem that is being resolved but slowly, and only for certain types of services such as pure play VoIP by companies like Vonage and SunRocket.
7. Uncertainty about privacy acts such as CALEA and whether they will affect VoIP services - and if so, which ones. Some VoIP services are not being regulated, some are. Most people probably don’t know that in many countries, all phone calls are filtered as a matter of course, and that operators can actually listen in if they want to. You might be surprised to know which countries actually have large teams of people hired to listen to certain phone lines on a daily basis. But with VoIP, the potential for this sort of government activity seems to be more out in the open. As such, it may be perceived differently in the minds of knowledgeable consumers, who are then reluctant to use IP telecommunications for their businesses (or even home use).