• BusinessWeek, Tuesday, August 26, 2008 11:15 AM

As more and more phones adopt Wi-Fi technology, the specter of Voice over Internet Protocol looms heavily over the major cellular carriers. When inside a WiFi hotspot, users can turn to services like iCall to make virtually-free calls anywhere in the world. One consultant tells BusinessWeek he saves hundreds of dollars a year making international calls on his iPhone using VoIP services. How so? ICall and other VoIP competitors bypass cellular networks altogether, making the phone connection through the Web. "Once I can make calls using the WiFi network, I will, in all likelihood, reduce the monthly minutes I have (with AT&T)," the consultant says.

Indeed, whereas VoIP spelled the death of the landline, the technology now threatens to erode sales for major carriers like Verizon and AT&T. According to ON World, by 2011, the number of mobile VoIP users around the globe could rise to 100 million, up from just 7 million last year. The firm also speculates that mobile VoIP providers will generate $33.7 billion in sales, up from $516 million in 2006. If you think those numbers are overly bullish, consider that Jajah, a wireless VoIP provider with 10 million users, recorded a fivefold increase in a single year.

Still, there's a long way to go to dethrone the wireless carriers, who are expected to collectively rake in $700.7 billion from voice services this year, according to Ovum, but the mobile VoIP providers are certainly knocking on the door: the report claims that they already command almost one-quarter of the wireless minutes devoted to long distance and international calls.

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