VoIP (Voice over Internet Protocol) Definition

VoIP Is Steadily Replacing the Public Switched Telephone Network

VOIP Phone
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VoIP stands for Voice over Internet Protocol. Using VoIP, voice information is converted into digital packets and sent over the internet (or private networks), and then converted back into analog signals before reaching the phone receiver at the other end.

This differs from the traditional Public Switched Telephone Network (PSTN) or "landline" service which is the global telephony network that has been in use since the late 19th century. The PSTN uses the standard "twisted pair" cabling for each line to a residence or business. Unlike VOIP, each call on the PSTN is a single, non-shared, discrete connection link from caller to receiver.

Because VoIP information is packetized and individual packets may take different paths over the internet, VoIP technology makes use of compression and encoding technology to make sure that packets are correctly ordered when they reach the recipient; otherwise, the transmission would be garbled.

VoIP Hardware

There are a variety of ways to connect with VOIP services. There are adapters to connect a standard phone to the internet—some of these are supplied by the vendor when you sign up for a VoIP service such as Vonage.

A more expensive option is to purchase an IP Phone. These are special VoIP phones designed to be directly connected to the internet. There are also wireless IP phones available.

Hosted (also know as Managed) VoIP is rapidly becoming a popular option for businesses - the service provider hosts the hardware and service software in the cloud and routes calls to/from the customer's existing phone systems, thus saving the customer VoIP equipment and management costs.

VoIP From Your PC

Specialized hardware (or even a phone) is not necessary to make VOIP calls - there are a number of software-based VoIP phone services available. The only requirements are a laptop/pc with a headset and an internet connection. You can sign up for the service, download and install the software, and begin making VoIP calls to phones or other computers. Skype is one example - along with the ability to make video calls from PC to PC for free, you can call non-VoIP landline or mobile numbers very inexpensively. 

Advantages of VoIP

  • Cost - voice information sent over the internet avoids using the fixed circuitry of traditional telephony networks – avoiding the tolls charged by traditional telephone service.
  • Features - With lower costs VoIP service providers can offer features such as free or low-cost long-distance calls as well as including additional bundled features such as caller id, voice mail, messaging, and even web conferencing. To counter this traditional PSTN providers have frozen or lowered the cost of their services, and now also offer bundled services at attractive prices.
  • Installation/ScalabilityMaintenance - VoIP is much easier to install, configure, and maintain, for example, adding a new VoIP user is a simple software change rather than physically installing a new line as is required with PSTN systems.
  • Integration - because it is internet based VoIP easily integrates with Customer Relationship Management (CRM) software and other business applications such as Microsoft Office.

Disadvantages of VoIP

  • Reliability of service is one of the primary disadvantages of VoIP versus the PSTN. PSTN services have a 99.999% uptime and because electricity is supplied by the phone line it can still function in the event of a power outage. VoIP requires power and a reliable internet connection - if the internet connection goes down for any reason VoIP services will be unavailable.
  • Quality of service - VoIP data is compressed, packetized, transmitted over the internet (along with all other internet traffic), and decompressed on the receiving end. Any internet connection problems or issues with bandwidth can translate into call interruptions, delays, echoes, and static. When you make a call via the PSTN you have a direct, private (non-shared) connection between the caller and the receiver.
  • Security - Because it is internet based, VoIP is subject to the same security issues as other internet technologies, including viruses, malware, spamming, phishing attacks, etc. Most VoIP vendors provide measures to counteract security threats.

VoIP From Cable Providers

Cable providers such as Comcast in the U.S. and Shaw Cable in Canada compete directly with PSTN providers by offering a VoIP-based service which uses their internal managed cable networks to transmit VoIP data rather than the internet. The result is a much higher level of reliability and quality of service than internet-based VoIP services. However, the cost is nearly equivalent to PSTN services.

The Future of VoIP and the PSTN

VoIP is steadily replacing the PSTN, which is already in decline due to the growth in the use of mobile devices. Converting to VoIP has major cost advantages for telecom providers, as the PSTN requires dedicated and costly switching hardware whereas VoIP uses relatively inexpensive servers and software and operates over existing broadband networks. However, given the huge installed base of existing PSTN infrastructure, complete replacement of the PSTN is probably decades away.