[New Technology]Internet Phone Stocks

Still using local baby bell as your main telephone service providers? Still suffering from all the extra service fees and taxes that add on to your monthly phone bill from the phone service that charge you money for unlimited calls only to your neighbors? If all these bothers you and you are the person who need to make regular phone calls to your family on the other side of the continent, you probably want to do what many people are doing now - switching to internet phone.

Internet phone uses technology known as VoIP(Voice Over IP) in which voice communication is converted and transferred thru digital signal over the internet instead of traditional analog signal. So now you don't really need to subscribe to any regional bell telephone company as long as you have broadband services such as those provided by most cable company.

Currently there are three different ways of using this type of technology. First is to use an ATA or Analog Telephone Adaptor which is a box for you to connect your ordinary phone to the VOIP network. Second is to use specialize phone called IP Phone thru VOIP service provider. Third is also to use IP Phone but to connect with another IP Phone directly.

So why use VOIP? The primary reason for people and business to switch to VOIP service is lower cost. Instead of having data service on internet and voice service on analog phone line now both data and voice are on the broadband which eliminate the need of leasing the analog line. Secondly it can be nearly as flexible as cell phone. For instance if you are on a business trip you may still use your IP phone to receive phone call whenever there's internet connection available.

Enough of the technicals, now let's take a look at the companys that engage in VoIP business. For instance Level 3 Communications (LVLT), a communication s and information services provider, is offering softswitch services including wholesale and consumer voice-over-IP component services. The stock prices which has been beaten down for the past few years has picked up some strength in the past few months and was on a 150% rally from $2 per share in September to $3.5 per share in November.

Another big player in VOIP in Sonus Network(SONS) which develop switching and equipment for voice service to be delivered via over pack-based network. The stock is now trading near its 52 week low and will need to go thru at least a month of bottom build-up before becoming a more attractive buy. Other VOIP companys are:

• Delta Tree (DDDC): a VOIP service provider and also IP phone maker. The company's revenue has jumped from 2003 to 2004 and should be expected to grow again this year. The stock is trading near its 52 week low of $2.78 and should be an attractive long term investment
• Net2Phone (NTOP): the company offers various VOIP service to consumer and small to mid size business. Net2Phone provides PC-to-PC PC-to-Phone and PC-to-Fax service. The company reported a narrowing first quarter loss yesterday but the price didn't change much. The stock price should be ready for a big run in the next few months based on techical chart.