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Free phone calls over the internet, and a bundle of options you can’t get with a regular phone? Is it hype or a great step forward in communications for small business? Helen Bradley investigates VoIP and finds it is a technology about to come of age.

When someone promises you free calls around the world, you’d be a fool not to sit up and listen. Well, the promises are being made, so what’s the catch? And should you be opting in or sitting on the sidelines?

This month we’ll look into the changing face of telephony in this country and around the world, and sift through the hype to see just what it might mean for your business.

VoIP (Voice over Internet Protocol) is the new hot buzzword in telephony but in one sense it’s old news. A decade ago, I chatted regularly over the internet to people all over the world using a dialup modem. It wasn’t good reception (in fact it was appallingly bad), but it did work and it was notionally free with the only cost being the computer and internet connection. Nowadays, the technology is much better, the quality is far higher, and VoIP has moved on from geek entertainment, into the mainstream. All this begs the questions: how does it work, what do I need to do to use it and, bottom line, what’s in it for my business?

While we may not understand exactly how a telephone call gets routed from Australia to the United States, for example, we all understand the basic process. VoIP is another technology altogether. VoIP replaces the existing telephone service with the internet, so calls are carried by the internet in packets of digital information rather than being initiated via the PSTN (public switched telephone network). However, because many people don’t have computers and aren’t permanently connected to the internet, to be useful VoIP must operate regardless of the ultimate destination of the call, and so it must interface with the PSTN when necessary. Your VoIP service provider ensures that your call ends up wherever it needs to go and, as a VoIP user, this process is transparent to you. After all, you don’t need to know what’s happening, you just need it to work.

When costing VoIP calls, you’ll find internet-to-internet telephone calls can be offered for an extremely low fee (in many cases they are free) and calls that connect to the regular telephone service will cost a fee which is often less than the rate charged by regular phone companies. In addition to the calls, there are hardware and software costs but these, in general, are substantially less than a traditional PABX.

Hooking Up

There are multiple ways to configure VoIP. One is to connect your regular analog telephone to an adaptor, which connects to your broadband internet service. This adaptor converts analog voice data into digital signals suitable for transmission over the internet and it’s typically marketed to the home user. A second method makes use of the computer to deliver the voice data. At the low end, you speak through the computer’s microphone and listen through its speakers; at the high end you speak and hear through a Bluetooth-enabled headset. These connections often use what is called a soft phone, which is an onscreen telephone that is used to make the call.

Another solution is to use an IP phone, which looks very much like a regular telephone but connects to a router. This phone contains all the software necessary to make telephone calls across the internet and, while most IP phones are required to be physically connected to the router, a WiFi phone lets you connect wirelessly. Potentially, this connection could be anywhere that wireless
is available.

A simple VoIP system for a handful of users is quick to set up and use. While an enterprise solution will be more extensive—because it replaces the regular PABX with an essentially software-based solution—it’s easier to install and configure and, in general, it will be scalable, so adding new users will be simpler.

One of the benefits of using VoIP is the add-ons included in the bundle, such as unified messaging and call routing. Even a two-person organisation could implement a VoIP answering system that answers the call and offers options according to what the caller’s needs are. A small company can seem more professional and much bigger when it is using VoIP.

Other benefits include voice mail that is stored on the computer and can be treated as any other computer data—for example, it can be attached to an email. So, if you have a VoIP system and you’re out of the country, your voice mails can be sent via email to you wherever you happen to be.

“It’s a general misconception that a prime reason for a small business to adopt a VoIP solution is to obtain calls at significantly reduced rates by bypassing the regular toll system,” says Mick Regan, chief architect for convergence at Nortel. “Instead, the reasons are more pervasive than that. A VoIP solution offers any business unified messaging, call identification and redirection and, in time, the ability to make and receive calls from anywhere you happen to be, making work a thing we do, not a place we go. It does this with scalable software and without the traditionally large investment in a hardware solution,”

Custom Fit

Another benefit of VoIP is its ability to be customised. Peter Dean, IT supervisor at a local automotive parts manufacturer, says his company plans to replace an ageing PABX with a VoIP solution from i-fone. The company has been beta testing the VoIP solution and expects to have around 100 handsets connected when the move is made. Peter sees the benefits as a significant reduction in call costs, coupled with the actual cost of the VoIP solution being less than replacing the current hardware. In addition, his small IT team can manage the system themselves, and so they foresee greater in-house management. “We can do what we want with it, all the tools are open source,” he says.

The mobility benefit of VoIP will be attractive to more than just casual travellers. Joe Nati, national channel manager for Comsol, challenges SMEs to think about the mobility options offered by VoIP: “I don’t think all SMEs realise that using a wireless broadband connection, a laptop and a handset, anyone can make VoIP calls to anyone else in the world and often at no charge. That makes VoIP a very powerful and inexpensive tool for a mobile workforce.”

VoIP technology is increasingly becoming integrated with other office applications as computers and the phone system converge. As Regan points out, “we see users as wanting more than just another handset. In fact, many will opt to do without a handset altogether and use a soft PC phone instead. By the end of the year you should see a soft PC phone embedded inside your Outlook program, letting you use one application to do all your
contact management.”

One key disadvantage of VoIP is that the technology is still in its early days. It is a field which is growing fast and you can expect new companies to come into the market with new offerings and developments and, inevitably, some companies in the market today may not be there tomorrow. However, when you’re dealing with technology, change is a constant and it’s never been a particularly good reason for not investigating the possibilities.

When considering a VoIP solution for your business, determine what it needs to do and what you expect to achieve from it. Understanding what calls you make, how long and where to, and your current costs of hardware and calls, will help you evaluate the service offerings. If most of your calls are to branch offices then implementing a VoIP solution that has free calls to other VoIP locations could represent significant savings. Also, consider what you’d like your phone service to offer if cost were not a factor—you may be surprised at the benefits that VoIP can offer in terms of better customer service tools.

* Helen Bradley writes for numerous international technology titles and is a frequent contributor to DSB. Contact her at helen@helenbradley.com

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