VoIP comes of age
President
Grant
Seiffert
Voice over Internet Protocol (VoIP) has finally come of age in the United States and broad availability of VoIP services could not have come at a better time.
During challenging economic times, it’s hard to look past the bottom line, and the simple fact is this: VoIP saves money - for businesses and consumers. It also offers manufacturers and service providers in the information and communications technology (ICT) industry opportunities to grow their businesses, in light of the current uncertain economic climate.
Review and Forecast, the number of VoIP subscribers is expected to grow at a compound annual rate of 20.2 percent through 2011, reaching 33.2 million. VoIP revenue has had a similar growth pattern, increasing from $25 million in 2003 to $200 million in 2004, $1.4 billion in 2005 and $5.0 billion in 2007. Revenue is projected to increase 19.2 percent on a compound annual basis through 2011, reaching $10.0 billion.
In most cases, people are using VoIP phone services to replace their public switched telephone network (PSTN) service, while some subscribers use VoIP to supplement their traditional service, especially for low-cost international calls. The quality of VoIP calls made over managed networks such as those used by cable operators is quite good, and the calls are often nearly indistinguishable from PSTN calls.
Cost savings aside, in the long run, convergence and consumer demands for new applications and features will drive growth. Millennials – the generation born between 1982 and 2001 - are driving the shift from legacy technology. There are more than 75 million Millennials living in the United States alone. To put it in perspective, there are more Millennials than Baby Boomers. It is the largest generation – and the largest market – in U.S. history. It’s the most tech-savvy and tech-demanding generation, too.
Competition among service providers is fierce, which is also good for companies and consumers. Service providers are aggressively competing for your business. Chances are, if your company hasn’t already switched to a system that uses VoIP telephony, it will be doing so soon.
What’s important to remember about VoIP is it is dependent upon broadband connectivity. TIA will continue to work with the new Congress and the incoming administration to develop a national broadband policy that includes investment in rural broadband deployment as well as long-term research and development. This policy will help VoIP – and all sectors of the ICT industry – realize their full potential.
At TIA, we realize that this technology isn’t just a game changer, it’s a life changer, and we advocate for affordable, highly advanced and secure communications services for all Americans.
What can VoIP do for me?
Voice over Internet Protocol (VoIP) can mean different things to different people but essentially the technology is proof that we are living in an exciting world of convergence where we no longer need to have separate networks for voice and data.
Once this leap to a single network for handling both phone calls and data is made, businesses and consumers not only get a whole new host of features and services on their phone, but there are plenty of savings to be enjoyed too.
There are several sides to VoIP, or internet telephony as it is of referred to. Many millions of people are already signed up to make PC to PC calls through services such as Skype which have now started to extend their offering to allow users to make calls to regular telephones. Likewise there are millions of people around the world with a regular-looking telephone plugged in to their broadband or cable internet connection who may not even realize the competitive, all-inclusive deals they have signed up to are provided by the extra efficiency offered by VoIP.
At the other extreme, there are businesses paying thousands of dollars per month for an old-fashioned PBX box to route calls around their facilities who now are switching to making calls across the Internet because it means they only need a single network, rather than both a voice and a data network. This brings cost savings both in reduced maintenance as well as the cost of calls.
VoIP everywhere
Perhaps one of the most interesting things about VoIP is that even if you have never heard of the term and were unaware that calls could be routed through broadband networks, you have almost certainly used the technology without even realizing it. As Ari Rabban, CEO of Phone.com explains, the large telecommunications companies have been routing calls through Internet Protocol (IP) networks for several years.
“The quality is so good nowadays that you just don’t realize that a lot of the time some part of your call is going across an IP network,” he says. “In the earliest days of VoIP, dial-up connections just didn’t have the bandwidth to handle calls well but now that broadband is so prevalent the quality is there and people are making calls across IP networks without even realizing.”
So, for those that have been put off by VoIP in the past, the message from Internet telephony providers is that just as connections have gotten faster, their software and systems have improved to the point where, most of the time, the only noticeable difference with VoIP is the cost of the call and the extra features now available.
Great savings and awesome features
While many claims can be made by VoIP providers over the cost of individual calls, one of the major cost benefits for businesses comes with unifying voice and data.
Traditionally when they ran on separate networks, voice and data were handled by different employees or, at least, separate third party providers. It is simple math then to suggest that by routing voice over the data network, a company can reduce cost considerably.
Some companies switching to VoIP may want to simply replace their conventional PBX with an IP router and keep their switching equipment within their own premises so they maintain full control over it. However, many are choosing to simply have much of the setup managed remotely by a host so they no longer need to concern themselves with ensuring their network is working well and up to date. Although they still need a switch and a router on their premises, the backbone of their system is sheltered within a secure data center, sheltering it from human damage and the elements. What’s more, hosted providers are also capable of managing their users’ networks remotely, down to the switch level, thereby ensuring quality of service.
This can save a lot of expense but it can also allow companies to expand quickly, explains Stephen Canton, CEO of hosted VoIP provider, iCore Networks. “A managed provider can have you up and running with multiple new users in just a matter of minutes,”he explains. “You can be making calls from a laptop immediately on that new extension while you wait for the new handset to be delivered. We’re certainly finding that our customers are reacting well to being able to open up new offices and grow without having to get the telephone guy to come in and set up all the wiring and configure the PBX box. The other benefit of not having to run your own telephone service is that somebody else takes the service calls for you. We estimate that the level of service calls we answer on behalf of a customer saves them at least half the time of one of their employees.“
One of the hot areas in corporate America today is business continuity and, as one can imagine, it is an area where there is a lot of interest in hosted VoIP solutions because a reputable host will have their equipment stored in a highly secure facility that will be about as disaster proof as is humanly possible. “When the conventional telecommunications providers went down at Los Angeles International airport during the July earthquake, our customer’s phones and Internet remained fully operational,” reveals Canton.
“By hosting voice and data services in secure data centers, we are able to provide customers with a high degree of redundancy which protects them against disasters that would otherwise disrupt communications. Of course, the beauty of a hosted VoIP solution is that if staff can’t get in to the office, for whatever reason, they can just divert calls to their home numbers, a mobile phone or take and make calls on a ‘soft’ phone through a computer wherever they are,” Canton adds.
When considering a hosted solution it makes good sense for a company to go through the fine detail of the proposed Service Level Agreement (SLA) to ensure the provider is delivering a phone service that will be at least as reliable as a conventional phone line.