‘VoIP’ could mean long-term changes to trenchless industry

The trenchless industry could soon be threatened by the simple concept of mobility. That is, if voice over Internet protocol or “VoIP” continues its disruptive charge into the communications market.

Rapidly growing VoIP companies like Vonage, Teleo and Skype are attempting to trump traditional telephone service – and its many switching stations and miles of wire and fiber optics – by allowing users the ability to plug their telephones into high-speed Internet connections at a cheaper price and with better quality than the Baby Bells offer.

“There’s a shift of being able to provide high quality phone service from hardware to software,” says Peter Sisson, president and chief executive of Teleo, and former Bell Labs researcher. “What’s happened is they’ve gotten the software right.”

Sisson’s company is perhaps the best example of VoIP’s potential growth, despite its current beta status. There had been hopes of a couple hundred users testing the pre-production software prior to Teleo’s version 1.0 release later this year. Instead, tens of thousands of users in more than 90 countries flocked to the company’s free peer-to-peer Internet calls, cheap $4.95 monthly fee and flat two-cents-per-minute calls to anywhere in the world.

The startling success of companies pushing VoIP owes much to the increasing availability of wireless Internet access and the consumer trend toward unfettered mobility. Sisson says VoIP attaches the phone number to the user, rather than to a specific place. “Three years from now, the concept of phone service will be remarkably different,” he says.

But this positive change for companies like Teleo could also mean negative changes for manufacturers of horizontal directional drills and related equipment used in the trenchless industry.

Ed Savage, trenchless product manager for Vermeer, says HDD is a big part of the company’s business. He says the increasing popularity of VoIP has the potential to make a big impact on that business. “Anyone in the business we’re in definitely has their eye on wireless [Internet],” Savage says.

Savage says the current infrastructure supporting wireless networks continues to require underground installation. In this way, traditional fiber optic infrastructure would co-exist with newer, mobile technologies.

But for VoIP company Vonage, increasing users means less reliance on traditional infrastructure. It boasts more than 500,000 subscribers to its unlimited long distance service that costs $25 a month, besting nearly every Baby Bell and cell offering on the market. Michael Tribolet, Vonage executive vice president of operations, says the company’s footprint is still small, and thus needs existing infrastructure to get service to customers. He predicts a large jump to VoIP in the next one or two years.

HDD manufacturer Ditch Witch is also keeping tabs on the spread of wireless Internet. At least 25 percent of that company’s products are used in the trenchless industry. Richard Levings, senior product manager for HDD products, says VoIP and other Internet-based technology growth wouldn’t affect Ditch Witch. “Wireless is simply not going to be able to handle everything [high definition television, etc.],” he says.

Levings says the popularity of cell phones didn’t affect Ditch Witch profits because fiber optics still had to be laid for the service to work. He says similar mobile technology would still require core infrastructure for transmission. “Certainly we watch every segment of a new market, and make adjustments to our markets,” Levings says.

Patrick Beeson can be contacted at pbeeson@randallpub.com.