You've seen the commercials and read the news advertisements for telephone service using your computer: very cheap monthly fees; make all the calls you want; keep your telephone number forever; and voice quality as good as a landline. You've heard the claims and you've heard the term "VoIP." Here's the scoop.



VoIP stands for Voice over Internet Protocol and it does what the name suggests ? it transmits voice data using IP packets over the Internet. It is also called Internet Telephony. It's easier to understand VoIP if you know a little about our telephone system ? PSTN (the Public Switched Telephone Network) and a little about the Internet.

Your traditional landline transmits calls through copper or fiber cables in the ground or on telephone poles with a cable connected to your home. When someone makes a call, one continuous route is made between the two phones and the information flows continuously in this loop. As you know from paying your bills, the longer the route, the more expensive the call.

VoIP works a little differently. It works using the Internet, which is a packet-based network. Packet-based just means that instead of sending one continuous string of information, it sends out smaller packets of information.

With VoIP, your voice is converted into a digital signal that travels over the Internet. There are three ways that this can be done: 1) using a VoIP telephone; 2) using a computer with speakers and a microphone; or 3) using a regular telephone with a VoIP adaptor. Because the IP packets are tiny by comparison, unlike downloading files, this all happens in real time, just like your regular phone.

Advantages of VoIP

Because VoIP provides services through the Internet, once you have the equipment in place there are a number of benefits.

The main reason for VoIP's popularity is its cost advantage. With regular phone service, you usually pay a monthly flat fee for your local calls and a per-minute charge for long distance calls. Internet connections are charged using a monthly flat fee only. Because VoIP doesn't charge a per-minute fee for long distance, you wouldn't incur those charges. If you make international calls, VoIP most certainly will save you a lot of money. If you used the Internet for both your data traffic and voice calls, you could get rid of one monthly payment.

The other cost advantage is that since it uses a broadband Internet connection, it efficiently uses the existing infrastructure you already use with your computer. There is only minimal software and hardware to buy.

Disadvantages to VoIP

There are a few disadvantages with VoIP. A major one is QoS or Quality of Service. Since there are packets carrying your voice information instead of a continuous flow of information, there could be delay problems, weird sounds, echoes and noise. VoIP quality depends on many factors ? your broadband connection, your hardware, your Internet Service Provider (ISP) and the destination of your call, just to name a few.

While VoIP has made substantial progress over the past 5 years in terms of Quality of Service, it still has a way to go.

Another disadvantage is that in the event of a power failure, you will lose the ability to make and receive calls unless you have a backup battery for your computer. With traditional phone service, the cables are directly linked to the phone lines and the phone company provides power independently of your home or company's electrical power system. Thus you normally do not lose a phone signal due to loss of power with traditional service.

Another criticism of VoIP service is its historical problems with 911 emergency services. With traditional phone service, the 911 system can identify the location and number of the call because it is connected and routed locally. With VoIP, you are calling through the Internet and the actual signal may travel substantial distances before being routed to a local 911-service center. Thus geographically, the 911 system might have trouble identifying your location. Most VoIP services today include what is known as enhanced 911 service. This is a process by which the signal traveling through the Internet carries with it a physical address for the calling location. At present VoIP equipment providers may charge an additional fee for this service.

Businesses that may want to use VoIP to save money need to consider any security issues that exist. This is because with VoIP, information is sent through the Internet. Just as with any computer connection, it is possible that a hacker can intercept the information being transmitted. It is important to investigate the VoIP equipment provider's network to determine how they route data, what firewalls or other protections are afforded for security purposes.

If you are ready to look into VoIP for your phone or fax service, you can visit electronics retailers, large discount retailers and search online for information. There are a variety of VoIP providers at present. The equipment that is used, the cost of the equipment, the cost of accessories, and the cost of any enhanced services can and should be compared.

You should purchase the system and use the provider that you feel would work best for your needs in terms of how many phones you want to connect to the system, what type of security you require and the cost of purchasing the equipment and the service.

You may want to use a telecom management service for a cost analysis to see if VoIP will be a good fit for your company.

VoIP is still a new technology and hopefully there will be more and more improvements and innovations in the coming years.