Whitepaper: What is VoIP? Is is right for my business?

What is VOIP?

VoIP or Voice Over Internet Protocol (VoIP) is an affordable alternative to traditional telephone service which allows phone calls to be made over the Internet. It works by converting your voice (analog audio signals) into digital data packets that can be transferred over the Internet using your current High-Speed Internet connection.

The various flavors of VoIP:
When people think of VoIP, they think of companies like Time Warner Cable's Digital Phone or Vonage, that are in business to become your full featured solutions company. Although these companies do offer VoIP services, the term can be used to describe something much simpler.

Looking back at the definition, we only need to be able to capture the audio and transmit it digitally in order to have VoIP. This can be done without subscribing to a service and without a specialized telephone or other equipment. Basic VoIP can be accomplished by an internet connected PC with a soundcard sporting a microphone and speakers. With that in mind, let's take a closer look at the three basic ways people are using VoIP…

The PC to PC version of VoIP is what was described in the previous paragraph. With a computer that has been purchased within the last couple of years, connected to a broadband Internet connection, and some kind of software for managing the communications, anyone can be up and running with a basic version of VoIP that may be totally free.

Such software is available as a free download, and Skype is one of the more popular applications in use. Skype allows members to make free PC to PC calls, regardless of distance, and for an extra fee they can send/receive calls from standard telephones. As mentioned, all that is needed is a PC with a soundcard, a microphone, and a good set of speakers, but there are also specialized USB VoIP telephones and noise cancelling headsets that make it even more convenient. Using a USB VoIP phone not only makes the transition feel more natural, but it also frees up the soundcard for typical audio applications (Music, games, etc), while the phones circuitry handles all audio processing for phone calls.

Using an ATA, or Analog Telephone Adaptor, may be the most common form of VoIP in use today. With an ATA, a standard telephone can be plugged into the adapter just as you would plug it into a phone jack in the wall. The ATA is then connected to your network, or directly to your broadband internet gateway, in order to convert the analog audio into digital data for transmission over the internet. Vonage and other similar services use ATAs to implement VoIP, as it is a simple approach for people with existing phone equipment that they would like to continue using. In addition, it can allow for a home pre-wired for multiple phone jacks to continue operating as is, with the only new piece of hardware required being the ATA.

IP phones are another way to implement VoIP. An IP Phone may appear to be much like your standard telephone, with the only physical difference being that the (RJ-11) phone jack has been replaced by an (RJ-45) Ethernet connector. Internally there will be some differences in the circuitry in order to allow the conversion from analog to digital to happen right in the phone. An IP phone is then connected directly to your network or broadband internet gateway, with no adaptor required. Packet8 is one service that offers IP phones to their customers, in addition to the more typical ATA VoIP service. The downside to IP phones is that the implementation requires all new telephones designed solely for use with VoIP. Any existing analog equipment can not be used.

Data Transmissions:
Your standard phone line uses the PSTN (Public Switched Telephone Network) for connecting the parties involved in a phone call. Although this system is reliable, it is not very efficient, and considering it has been operating under the same basic principles since the invention of the telephone, it might be surprising to realize we have such an antiquated system. A call made on this system is referred to as "circuit switched", since the two parties are constantly connected throughout the duration of the call… like a circuit.

A VoIP call doesn't use the PSTN, and it does not keep the two parties connected throughout the conversation. A VoIP conversation is referred to as "packet switched", as the data is transmitted in packets (or smaller chunks) and the connection is made only as these chunks of data need to be transmitted.

One benefit of this method is that packet switching lets the datatravel from caller to caller over the most efficient path on the Internet, and not over one dedicated line. Additionally, because there isn't a dedicated connection for the conversation, bandwidth is conserved, and more phone calls can be placed in the space typically required by one PSTN call. Even greater efficiency can be achieved through VoIP's use of data compression, which is equivalent to Zipping-up the data before transmitting (and unzipping it at the other end).

Benefits:
VoIP offers many benefits over traditional telephone service, which has it poised to become the phone system of the near future. Many traditional long distance carriers actually use VoIP themselves, as it makes routing long distance calls more convenient than over traditional lines. So, even if you don't subscribe to a VoIP service personally, it is likely that you have already used it, whether you know it or not.

One of the main benefits of VoIP is the flexibility. You can take your phone, and your same phone number, with you anywhere in the world where a broadband internet connection is available. This can be extremely useful for business travelers who can not count on their mobile phone to work internationally, and appreciate the presence of a dedicated phone number for use for staying in contact with associates/clients. This flexibility is made easier through the use of a PC based or IP based telephone, but even a typical ATA can be packed up and stored in a brief case.

Another key benefit is price. Taking a look at the offerings from services like Vonage or Packet8 shows that the traditional phone company may not be able to compete. In addition to offering local and long distance for lower rates, they also bundle in all the extra calling features that people have grown to rely on (such as caller ID, call waiting, three-way calling, etc).

VoIP also allows some more advanced features not available with your typical land line. Many services offer the ability to check voice mail via the web, or to even have voice messages sent to you as an attachment in an e-mail. The service's web interface may also allow for a detailed calling log to be reviewed, for customized messages be applied to certain callers, and for special call forwarding settings to be applied.

Final Words:
VoIP is nothing new, but as the technology advances the popularity is surging. The efficiency, calling features, and competitive pricing have it poised to overtake the antiquated PSTN system as the way we make phone calls. This Tech Tip covered some of the basic ideas and features of VoIP, and hopefully offers a better understanding of what exactly Voice over Internet Protocol is.