Voice over Internet Protocol, or VoIP, is a great cost-saving alternative to traditional telephone services that enables voice data to be transported over IP networks, like the Internet, instead of the public switched telephone network (PSTN) or a cellular network.

Because VoIP is inexpensive, has a worldwide reach, and operates on a few simple principles, it’s exploded in popularity in recent years—especially among both small and large businesses that incur significant long-distance telephone expenses. However, it’s not all fun and free calls. Below are six things to consider when you’re deciding whether or not to invest in VoIP.

1. Regulation vagaries
Much of the government regulation of VoIP is still being worked out. The U.S. government hasn’t decided whether VoIP is going to be regulated as phone service or whether to tax it. VoIP isn’t available worldwide because some governments fear the loss of tax revenue or control.

2. Compatibility
Although older VoIP equipment may still have some compatibility issues, current VoIP products from different vendors generally work together.

3. Cost
For all the popular talk about VoIP being free, it isn’t truly free. Any VoIP system has costs associated with its implementation—equipment, high-speed Internet access, and gateway service. So, although it’s inexpensive, it’s a long way from being free. For organizations with a high volume of long-distance calls, especially to international locations, VoIP almost always pays for itself quickly. However, private users or organizations with a low volume of long-distance calls primarily within the U.S., may find that a standard service is actually more economical in the short- to mid-term.

4. QoS
VoIP depends on having a fast, reliable network to operate. A fast network connection with guaranteed bandwidth is not a problem in a corporate intranet where you have complete control over the network. However, if you’re using the Internet for VoIP, you’re using a public network that may be subject to slowdowns that cause drop-outs and distortion. You may find that your high-speed Internet connection is faster than the actual Internet and that the quality of your connection is generally unacceptable or is unacceptable at times when Internet usage is high.

There are four common network issues that can cause problems with a VoIP system:
- Latency is a delay in data transmission. With VoIP, this usually results in people speaking over one another because neither can tell when the other is finished talking.
- Loss. Losing a small percentage of voice transmission doesn’t affect VoIP, but too much (more than 1%) compromises the quality of the call.
- Jitter—is common to congested networks with bursty traffic. Jitter can be managed to some degree with software buffers.
- Sequence errors—or changes in the order of packets when they’re recompiled at the receiving station, degrades sound quality.

5. Emergency services
If you subscribe to a VoIP gateway service that enables you to use your VoIP phone like a regular phone, be aware that you may not be able to call 911 for emergencies. If 911 service is important to you because you don’t have an alternative way to call 911, shop for a VoIP provider who does provide this service.

Consider, too, that VoIP needs both working Internet access and power to work. If you lose your Internet service, your phone goes, too. And, unlike regular phone service that can keep basic telephones working when the power goes out, VoIP needs power—if you lose power, you lose your phone.

6. Moving forward
Before VoIP technology becomes truly universal; the current worldwide PSTN will have to migrate to a packet-based IP equivalent. Industry inertia alone dictates this will not occur instantly. The current worldwide PSTN system has grown to what it is over a period of 125 years. Given the sheer complexity of the existing PSTN, the migration to an IP packet network will probably occur during several decades.

As migration from the PSTN to IP-based networks proceeds, businesses and home users will gradually discover reasons of their own to implement VoIP. It won’t happen right away, but we predict that VoIP will become a big part of telecommunications in the not-so-distant future.

Although it’s not quite as convenient as conventional phone service, VoIP can offer serious savings—particularly if you now regularly pay for multiple overseas phone calls. Keep in mind though, VoIP isn’t a one-size-fits-all solution. But with a little planning, VoIP could spell savings for you.

More and more companies are migrating from a traditional private branch exchange (PBX) telephony system to a voice-over-IP (VoIP) system. The question isn't if you should move to a VoIP system, but when. Although VoIP systems have been commonplace in larger organizations, they are now becoming more affordable and practical from small- to medium-sized businesses (SMBs) to implement. VoIP systems benefit everyone from telecommuters and mobile workers all the way up to the managers and users of large call centers.

What is VoIP?

VoIP is a cost-saving alternative to traditional telephony service. It delivers voice calls over a data network that uses packet switching instead of a circuit switching.

There are different types of VoIP networks. Calls can be "Internet telephony," that is, sent over the public Internet, or they can be "enterprise IP," which are calls originating on the corporate IP network and sent over the corporate intranet, or a combination of the intranet and a Public Switched Network (PTSN). The latter is called an IP PBX system.

VoIP options.

The best VoIP option for you depends on the size of your organization, the number of users, how many locations you have, etc. There are two basic types of offerings: hosted services or on-premises services, also called customer premise equipment (CPE services).

Large organizations typically use CPE systems where the system equipment is physically on-site. These offer much greater control over features, functions, and capabilities, but they also require a much greater initial capital outlay. Small businesses usually use hosted services as they are easier to manage and have a much smaller initial capital expenditure.

VoIP offerings include:

Converged voice and data: There are basic VoIP systems using existing phone systems. The most basic are software based, such as Skype. As software-based systems continue to grow and mature, they are becoming more appealing to the SMB market.

Hosted IP-PBX: In a hosted system, the service provider, rather than the end user, deploys a PBX system. The end user needs to purchase IP phones, but not a PBX.

Managed IP-PBX: This is an on-site VoIP system including the system, services, and support. It requires a greater capital expenditure but it gives the user a flexible call routing platform, management of PBX functions, and centralized call routing.

Session Initiation Protocol (SIP) trunks: A newer technology, SIP trunks enable converged IP applications within and outside the enterprise. SIP trunks offer significant savings, eliminating the need for local PSTN gateways. They also offer maximum control of multimedia communication sessions over an IP network.

Not all fun and free calls.

VoIP depends on having a fast, reliable network to operate. A fast network connection with guaranteed bandwidth is not a problem in a corporate intranet. But if you're using the Internet for VoIP, you're using a public network that may be subject to slowdowns. The quality of your connection may be unacceptable when Web usage is high.

You may face many of the same challenges experienced with sending high-resolution video over a LAN, especially if it's a converged voice/video/data application. Therefore, you'll need to test the speed of network connections and the network for available bandwidth, and have the ability to prioritize switched packets for QoS delivery.

There are four common issues with a VoIP system:

• Latency is a delay in data transmission. This usually results in people speaking over one another.
• Loss. Losing a small percentage of voice transmission doesn't affect VoIP, but too much (more than 1%) compromises the quality of the call.
• Jitter is common to congested networks with bursty traffic. Jitter can be managed to some degree with software buffers.
• Sequence errors, or changes in the order of packets at the receiving station, degrades sound quality.

Emergency services issues.

The FCC has taken steps to require that providers of interconnected VoIP services (VoIP services that use the PSTN-the most common type of VoIP), to meet Enhanced 911 (E911) obligations. E911 automatically provides a callback number and, in most cases, location information.

As of January 2011, these rules do not apply to non-interconnected VoIP service providers, which provides calls between computers, IP adapters, or SIP phones to other VoIP customers and do not touch an interconnected service. For example, Skype to Skype calls over broadband is non-interconnected VoIP.

Power issues.

Consider, too, that VoIP needs both working Internet access and power to work. If you lose your Internet service, your phone goes, too. And, unlike regular phone service that can keep basic phones working when the power goes out, VoIP needs power—if you lose power, you lose your phone.

As with any emerging technology, there are going to be a few bumps in the road. In the long run, VoIP offers a better way to manage and transmit voice, data, images, video, e-mail, faxes, and more at a lower cost than traditional phone services. If you need technical advice, just call 1-877-877-2269 for an expert in less than 30 seconds.