IP telephony (VOIP)
IP telephony, commonly known as VOIP (Voice over Internet Protocol) telephony, is used to provide phone services using the internet rather than the existing Plain Old Telephone System (POTS).
VoIP was invented more than ten years ago as a way to use the growing internet for cheap long distance phone calls. Through the 1990s it was more of a promise than a reality as slow dial-up modem speeds made VoIP's sound quality much lower than the regular phone system.
However, as broadband internet access became cheaper and more widespread, these sound quality issues faded and the cheap cost of VoIP phone calls began to challenge the cost of existing telephone networks.
With the introduction of mass-market VoIP services, including Skype 
in 2003, the idea of making phone calls using the internet began to catch on.
Today, although VoIP is still in its infancy, there are over 30 companies selling VoIP services in Australia. Many large and small companies have or are replacing their internal telephone systems with VoIP systems and a growing number of ISPs (Internet Service Providers) bundle VoIP services with broadband internet connections.
Skype has grown to be the global leader, with over 100 million users worldwide.
It has been estimated by Market Clarity that there were more than 400,000 VOIP users in Australia in December 2005, with most using free VoIP services.
The evolution of VoIP telephony
VoIP telephony is evolving from being a system for computer experts to being a replacement for the normal phone and mobile phone network.
Originally, VoIP services allowed calls between people using computers. You could, and still can, download and install free 'softphone' software, plug in a headset with microphone and earpiece and use the software to call others around the world for free.
As VoIP developed further, many of these systems, such as Skype, connected to the existing phone network. This allowed people to call normal phones and mobile phones from their computers at much cheaper prices than the existing phone network.
The next development involved the introduction of Analog Telephone Adaptors (ATA boxes) that look like modems and plug into standard phone lines to turn them into VoIP phone lines, such as Engin's voicebox . Normal phone handsets plug into the converter to allow people to make VoIP calls just as they would make normal phone calls.
The most recent development has been the creation of wireless VoIP phones . These handsets look and act like mobile broadband internet phones but use wireless broadband internet networks to carry phone calls. These services are not yet widespread. However, they promise much lower call charges than mobile telephony.