An explanation of VoIP

What is VoIP? How is it used in business? How can it benefit my company?

Voice over Internet protocol, or VoIP for short, is a technology which allows voice to be transmitted over modern data networks instead of using traditional voice circuits. The worldwide move to VoIP provides numerous benefits such as; voice and data traffic can share the same infrastructure, delivery of voice traffic is generally more cost effective, integration of voice with computer applications is made possible.

Generally people’s knowledge of VoIP is through lower quality consumer products such as Skype, which enable long distance calling over the Internet at extremely low or no cost. However in business the use and benefits of VoIP are quite different, the main areas are;

1) VoIP phone systems (IP PBXs)

VoIP PBXs - are now basically computer applications delivering off the shelf functionality far beyond the traditional PBX. In addition to standard functions they include features such as call recording, conferencing and call centre functionality previously only found in high end specialist solutions. In additional new tools such as ‘Presence’ are now commonly available which can add significant value to businesses through enabling users to dynamically manage their calling.

VoIP phones can be either a item of hardware on the desktop, or a soft phone which is a program that runs on your PC, or both working in tandem. e.g. click a contact on your Outlook to dial, and pickup phone handset to talk. Key benefits are; the reduction of phone hardware and removal of the need for separate voice cabling. However offsetting this, VoIP handsets are more expensive and LANs must be designed to a higher standard to support the real-time nature of voice traffic.

With VoIP phones, the connection from the phone to the VoIP PBX within the office is via the office local area network (LAN). However connectivity is also possible from outside the office via the companies wide area network (WAN) and/or Internet. Key benefits are the ability to provide the same PBX functionality to both remote and mobile users, as those located in the office, and to enable seamless extension calling between these users.

2) VoIP phone lines (SIP trunks)

Business PBXs are traditionally connected to the phone network via either analogue (POTS) or digital (ISDN) phone lines. These are delivered on copper cables into your office and generally cost $40 - $45 per line (channel) per month. In addition, increasing the number of lines requires, in most cases, the connection of additional copper cables, which takes time and incurs install charges.

SIP trunking is the commonly used term for replacing the analogue or digital phones lines with voice channels delivered over a data circuit to your office. SIP channels cost $15 per channel per month in addition to the cost of the data circuit. So as to ensure quality and reliability, Digital Island only delivers SIP over premium data circuits, such as fibre optic. Premium data circuit costs vary depending on the site location, but as a rule of thumb for less than 8 channels the total per channel cost will be same as traditional phone lines, however for greater quantities of channels the per channel cost becomes less.

The key benefits of SIP trunking are; achieving cost efficiencies through delivering both the SIP trunks and Internet access over the same data circuit and, as SIP trunks are software based, changes such as increasing numbers of channels are quick and cost effective.

3) VoIP calling

VoIP calling enables businesses to reduce calling costs. Rates for local and national calling are reduced by around 20%, with International rates up to 30% less depending on the destination. Business VoIP calling is delivered over private IP networks, ensuring that the quality and reliability is the same if not better than traditional switched minutes. Therefore the call costs are much lower, but not free like Skype which is delivered over the public Internet.

The key benefit of VoIP for multisite companies is providing free extension to extension calling between staff located at branches across the city, country or even world.