It took less than 20 minutes to install a new telephone system at Level Development in Cherry Creek on Thursday.
The three-person real-estate development company recently moved from Larimer Square, but instead of continuing its traditional land-line service, the small group turned to Voice over Internet Protocol – phone service over a high-speed Internet connection.
The quick installation stunned Chris Manning, vice president of Level Development.
“That’s amazing,” Manning said after an employee from Greenwood Village-based VoIP provider IP5280 finished testing the office phone. “I looked into VoIP, and I know it’s more flexible. My bill will be 20 percent cheaper.”
Lower prices and flexibility over traditional land lines are luring small and medium-sized businesses to VoIP service in increasing numbers.
Residential customers are familiar with VoIP services from companies such as Vonage. Comcast’s digital phone service is also a form of VoIP that utilizes the cable company’s high-speed Internet connection.
Just more than 20 percent of U.S. businesses are using some kind of VoIP technology, up 50 percent from last year, according to InStat, a Scottsdale, Ariz.- based research firm. By 2011, 67 percent of businesses will be using VoIP, InStat estimates.
“VoIP is definitely gaining traction in businesses of all sizes. It’s driven by cost savings,” said David Lemelin, senior analyst for InStat.
Manning, who said he got business phone service from Qwest for several years, signed up with IP5280 for the customer support as well as the savings.
“I wanted to call and get a person,” he said.
Testing solutions
Businesses are experimenting with which VoIP solutions make the most sense for them, Lemelin said. Some companies allow a VoIP provider to host and manage the service offsite, while others have a server installed at the company. Many Internet service providers have expanded from offering only Internet access to broadband-based phone services.
Employees don’t have be in a centralized location to receive calls to a VoIP-based system. Manning can take his VoIP phone home and plug it into an Internet access line and still be reached at his office number.
Other VoIP features include forwarding voice mails and a call attendant who acts as a receptionist for many small companies, which helps give them a more professional look and feel.
“We’re bringing them features they never knew existed,” said Jeffrey Pearl, managing partner and co-founder of IP5280. “Traditional telephony is going away.”
Actually, traditional telephone companies are adapting to the new competitive pressures from VoIP providers. Qwest offers VoIP services for businesses and has been doing so since 2004. The company offers VoIP in 1,000 cities nationwide, including regions outside of its 14-state service area.
“Predominantly, the people moving into VoIP are legacy users of phones,” said Ken Smith, vice president of midmarkets for Qwest. “There are economies beyond the obvious fixed costs when you consider the long-distance traffic between multiple locations because it is at no cost.”
Qwest still markets its traditional phone service to businesses, but Smith says the company’s VoIP offering won’t cannibalize that segment of business because some companies will need a land-line product.
Michael Welter’s Evergreen-based Telecom Matters Corp. has found a niche offering VoIP and Internet services to nonprofits such as the Colorado Coalition Against Domestic Violence. Adam Aircraft is another client.
“My customers are very price-sensitive,” Welter said. “Most of my customers don’t know about VoIP; they just want to pick up a phone. I installed a 10-person office phone system last week for $5,000.”
One of the reasons customers like the additional capabilities of VoIP service is because they’re included in the monthly price and not billed separately, said Eric Laughlin, chief executive of VoIP Review, a Morrison-based website that helps residential and business customers pick VoIP services.
“Thing about VoIP is that you get so many things included,” he said.
Lemelin of InStat says telecoms such as Qwest must offer VoIP services to retain customers looking for more flexible and expandable phone services.
“The AT&Ts and Qwest have to come to realize that the expectation of customers is that they can save money with VoIP,” Lemelin said. “Each has VoIP solutions in their own portfolio, so they’re in good position to use it as a retention strategy.”
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
