On March 10, 1876, is when Alexander Graham Bell spoke into the transmitted gadget. Bell wrote a letter to his father “I feel that I have at least found the solution of a great problem, and the day is coming when telegraph wires will be laid on to houses just like water or gas is, and friends will converse with each other without leaving their home.” (United States History) Hundred Thirty-five years later people are leaving home with their phones, sending emailing; webcam (Skype), and now we are able to holographic for a business conference. As we leave the information age into the fast approaching digital age, the greater need for technological advancement over the existing plain old telephone lines has never been greater. Plain old telephone line has become prehistoric and expensive, but still essential phone service to its consumer’s home, however; it’s dramatically losing leverage to greater technology called Voice-over-IP. VoIP technology provides its consumers to make phone calls using a broadband internet connection and not a regular phone line. VoIP changes the voice signal into a digital signal that travels over the internet, and then when it reaches its destination it changes it back to a voice signal which can be used with any telephone.
Traditional phone lines are now slowly being phased out as businesses and households around the world embrace the benefits that VoIP technology has to offer. Also known as Voice over Internet Protocol, Voice over Broadband, and IP telephony, VoIP is a technology that lets people use the Internet as a transmission medium for telephone calls. By using VoIP, callers can avoid long distance phone charges and save on expensive telephone infrastructure costs. This has become a rowing concern with companies like, Qwest Communication, Verizon Communications, and AT&T. These regional bell operating companies are the giants in this business and they all will be harmed as telephone customers continue to disconnect their phone lines in favor of VoIP. With the next-generation providers, such as Vonage and Skype, have done much to familiarize the general public with VoIP and its capabilities and have shown early success by offering cheap and in some cases, free calling services. Vonage is one of those VoIP services that specialize to provide their customers with only VoIP options. With crafty ads and their reputation for a great product and service has risen through the ranks to become one of the best VoIP services in the industry, earning them our “Top Ten REVIEWS Bronze Award”. The main draw of Vonage is the fact they don’t keep any features from the customers who are unable to afford their most expensive plans. This makes it possible for customers who are on a budget to be able to enjoy the full scope of Vonage’s capabilities without having to worry about being short changed or having to go up to a more expensive plan because of a lack of features.
Vonage is a company that provides phone service that implements VoIP technology. The advantage that customer has when using Vonage service, are the enormous cost saving it has over traditional phone lines. Vonage comes with the entire calling feature found on a traditional phone line with AT&T, but at a fraction of the cost. This has prompted telecom giants like Verizon and AT&T and many more new comers that are entering into the VoIP market, such as companies MagicJack and Skype. These service providers offer competitive pricing calling plans with many features to attract consumers. The impact of this has created a competitive calling plans pricing, which has started a pricing war among the VoIP service providers. When one provider reduces their calling price plan, their competitors would lower their calling plans. The demand for VoIP service is relatively price elastic. A reduction in VoIP market price will lead to an increase in quantity demanded. The lower VoIP price can affect the providers’ revenue, however; it will increase infiltration into the total voice market because more customers would be more likely to change service to the price disparity for the same calling plans and features when comparing to a traditional phone plan.
As we learned in Economics, competition affects consumer demand and price. Consumer demand and price are related to each other. As we all know when the price of a good or service rises, the amount of demand will fall, on the other hand when the price falls, the amount of demand will rise. In our current economic state with millions of people laid off, consumers are looking for ways to cut expenses. Many servicers’ providers are looking at the consumers buying behaviors for cheaper and quality services. Let’s be honest, consumers will not buy any goods or services if it does not fit into their budget. In an article from Ezine Article that stated “A survey conducted by the Pew Research Center's Internet & American Life Project shows that there has been an exponential increase in the use of PCs to make phone calls via applications like Skype or Yahoo Messenger. This means that there will be a steady increase in residential subscription of VoIP systems for the coming years.” (Communications, 2011) Why? It’s cheaper. Like companies like AT&T offering bundle package that includes cell phone, internet, universe, home phone service at a cost that is still expensive for the consumer.
One of the largest problems that are impacting the cost of Vonage’s VoIP service is competition. When larger and more reputable telecom servicers enter the market, it inevitably increases the competition for the same market share. With a increase number in competition many service providers, including Vonage has either lower they prices or provided additional features with their service to offset the increase number of competition, to attract more consumers. For Vonage to remain in an optimal competitive position, they need to continue keeping their prices low and finding ways to improve VoIP technology. They also need to continue to educate their customers in the VoIP technology. Finally, continue to provide the highest quality of service possible to their customers. The Top Ten Review stated it best, “Vonage is one of the best business VoIP providers that we were able to identify through our research. With an extensive feature set, healthy service plan offering, and great help and support, Vonage makes a name for itself in the world of business VoIP. If you’re looking for an efficient and powerful solution, try this service.” [ (The Top Ten Review, 2011) ]

Bibliography
Communications, D. S. (2011, June 07). Retrieved September 26, 2011, from ezinearticles: http://ezinearticles.com/?Where-Is-IP-Telephony-Headed?&id=6331797
The Top Ten Review. (2011). The Top Ten Review. Retrieved September 26, 2011, from The Top Ten Review: http://business-voip-review.toptenreviews.com/vonage-review.html
United States History. (n.d.). United States History. Retrieved September 26, 2011, from http://www.u-s-history.com/pages/h1797.html