Net to slash phone bills

by Chris Griffith
Published 17 Nov 1996 in The Sunday Mail


my face


For 18 months computer buffs have been harnessing the Internet to make free international phone calls. But as CHRIS GRIFFITH reports, you may not need a computer to make overseas calls for as little as 13 cents a minute to the United States via the Internet.

Calls to the US for 13 cents, to the UK for 23 cents, and to New Zealand for 37 cents per minute.

These are typical of rates available not just to Internet users, but soon to anyone with a telephone.

For over three years, the Internet has captured the world's imagination as a massive communication and information system - with its electronic mail and news services, and its National Geographic-style world wide web (WWW) pages.

But for some users, the Internet has doubled as a rival telephone network, capable of delivering free or incredibly cheap international phone calls.

Instead of sending text and pictures, these Internet users talked to one another - transforming the Internet's backbone out of Australia into a rival telephone network.

The revolution came in stages.

In February last year, computer software company Vocaltec launched "Internet Phone" - software which provided free international calls to anyone connected to the Internet via their personal computer.

By having a fast modem and by adding a sound card, microphone, and a set of speakers to their PC (for as little as $100), Internet buffs could chat to other Internet buffs with similar equipment anywhere in the world.

The concept was a major success, and a plethora of similar software packages to Internet Phone followed.

These included CyberPhone, FreeTel, PowWow, WebPhone, and WWW browser plug-ins such as CoolTalk.

The cost of calls was virtually nothing - as little as $1 per hour to access the Internet, plus the one-off 23 cent call to your local Internet provider.

But there was a downside.

First, depending on the sound card, the conversation was strictly one person at a time, akin to CB radio with similar quality, and when the information super highway was overloaded, the discussion became garbled.

Most importantly, the overwhelming majority of Australians did not use the Internet, did not have a multi-media PC, and were not computer literate enough to use the software.

Recent developments, however, indicate this technology is no longer the preserve of the computer literate, indeed of internet users.

Over the last year, those at the technological cutting-edge have linked the Internet with the ordinary telephone system - with stunning results.

For example, several US companies have created a bridge between the Internet and the US telephone service which means that Australian Internet users can now directly access the US telephone system - and anyone with a phone.

Still using their PC equipped with sound card and microphone, an Internet user in Brisbane dials their local Internet provider, and, using software available on the Internet, connects with the US phone system and then to any US phone number for as little as 13 cents per minute.

That's an 84 percent saving on an ordinary phone call which to the US normally costs between 94 cents and $1.19 per minute.

The IDT Corporation (on the Internet at https:// and the Global Exchange Company (at are among companies providing free Internet software that makes this possible and very easy.

The cost to Australian Internet users for calls is just their 23 cent local call, their hourly use of the Internet (again say $1 per hour), plus the US call charges paid over the Internet to these companies by credit card.

The call rates charged by these US companies are ridiculously cheap.

You can contact the US on the Internet and dial out to the UK for just 23 cents, to Canada for 16 cents, to New Zealand for 37 cents, and to Sweden for 21 cents.

Dialing New Zealand is more expensive than dialing Sweden because you're effectively making these calls from the United States - and Sweden is closer to the US than New Zealand.

Amazingly, you can call anywhere in Australia for just 25 cents per minute - effectively you are contacting the US via the Internet, then coming back via the phone system.

It sounds cumbersome, but 25 cents per minute is cheaper than the peak Australian STD rates for 100 km or more (30.6 cents per minute) and 750 kms or more (43.6 cents per minute).

It is embarrassing to the point of absurdity that an international call to Australia from the other side of the world can be cheaper than some calls within Australia - but true.

The IDT Corporation and the Global Exchange Company both provide a complete list of International call rates on their Internet WWW pages.

At the time of printing, the IDT Corporation's rates were cheaper, and they did not charge an establishment cost.

Further using IDT's free Net2Phone software, Australians have free access to 150,000 toll-free US numbers.

These are US 1-800 and 1-888 numbers which, according to their description, deal with "everything from abdominal supports to zippers, and from accountants to zoos''.

Users can search the Internet's US toll-free number directory at https://

Using this directory, The Sunday Mail found toll-free numbers for around 150 US newspapers, including the Washington Times, the New York Times, and the Wall Street Journal.

There were toll free numbers for Walt Disney Films, the Friends of Senator Rockafeller, the Coalition for New Republicans, and the Australian Broadcasting Corporation's Washington Studios.

All were available as free calls from Australia on the Internet.

However this phone call revolution is about to undergo its most stunning phase.

If personal computers can be linked through the Internet to ordinary telephones in the US, can phones at both ends be linked to the Internet, and personal computers eliminated from the equation altogether?

The answer is 'Yes'.

Early next year, companies such as AlphaNet in Canada will provide a phone-to-phone international link on the Internet - initially between six countries. Vocaltec and the Global Exchange Company are planning similar ventures.

From any Australian phone, it will be possible to dial a local 1-800 number in Sydney, dial a pin number, and then use the Internet to call Britain, Japan, Hong Kong, Canada, and the US at a fraction of the cost of normal international calls.

These companies too will be selling this Internet-phone system linking technology.

Corporations in particular will be able to link their PABX and fax systems directly to the Internet, enabling virtually free long-distance communication.

Tests by The Sunday mail of the AlphaNet system last week found these calls were as clear conventional international calls.

AlphaNet is yet to finalise its international call charges, but said the savings would be similar to those provided by IDT and Global Exchange.

In the long-run, this technology could see a mass movement of international phone call traffic to the Internet.

But it could also provide the impetus for Telstra to intensify its lobbying for timed local calls to the Internet, and for controlling the Internet by buying out Internet providers.

On the other hand, if consumers vote with their feet, this extra competition in the international phone call market may simply reflect that Australia's calls have been too expensive for too long - and that true competition in telecommunications is here at last.

Country            Computer to     Normal           Average
                   phone rates    call rate         Saving %

Australia             .25        12.2 - 43.6          STD
Bahamas               .44        2.09 - 22.2          79 %
Canada                .16        0.84 - 1.24          85 %
France                .32        1.10 - 1.47          75 %
Hong Kong             .51        0.78 - 1.25          50 %
Ireland               .46        0.94 - 1.25          58 %
Italy                 .46        0.94 - 1.33          59 %
Japan                 .37        1.28 - 1.67          75 %
Mexico                .61        1.77 - 1.83          66 %
New Zealand           .37        0.66 - 1.00          53 %
Spain                 .53        1.70 - 1.92          71 %
Sweden                .21        1.10 - 1.47          84 %
Switzerland           .33        1.53 - 1.66          79 %
United Kingdom        .23        0.94 - 1.19          78 %
United States      0.13 - 0.19   0.84 - 1.19          84 %

by Chris Griffith