VoIP offers benefits over conventional telephony, and they generally boil down to lower cost, less complexity and more advanced communication features.

If you're a smart businessperson, you're probably always looking for new ways to maximize efficiency and minimize costs. One of the ways you may be thinking about is trying out Internet telephony and VoIP (Voice over Internet Protocol), which lets you use the Internet to send and receive phone calls.

The Benefits of VoIP

VoIP offers benefits over conventional telephony, and they generally boil down to lower cost, less complexity and more advanced communication features.

The technology's most noteworthy advantage (and the one that attracts the most attention initially) is the potential for savings on telecommunication charges. Conventional business phone service can be quite pricey when you consider the cost of multiple phone lines, additional charges for special features like three-way or conference calling, and the fact that most providers bill business calls by the minute, particularly for long distance.

VoIP lets you conduct your voice calls across the same data network you use for everyday applications like Web access and e-mail, eliminating the cost of dedicated voice lines. Even better, VoIP providers typically don't charge extra for those added calling features, and most offer unlimited local and long-distance calling for a relatively low flat fee, while International calls often entail nominal per-minute charges. It's not hard to see how VoIP will usually result in lower and more predictable phone bills for business.

In addition to the lower-cost phone calls, VoIP imparts additional savings by reducing the complexity of your technology infrastructure. For example, when you eliminate dedicated voice lines, you no longer need to administer separate voice and data networks. Since each has usually has its own equipment and vendors, you'll likely pay less for ongoing capital investments and support services. Many VoIP service providers offer hosted PBX services that let you take advantage of advanced VoIP features without buying or maintaining any in-house equipment.

Beyond saving you money, VoIP also has the potential to make you more productive by giving your communications a mobility it's never had before. Mobile phones already let you keep in touch on the road, but what if, instead of a separate phone number, you could take your office line with you when you travel? Take a VoIP phone on the road, and you can place or receive calls as if you were sitting at your desk from almost anywhere. Moreover, since your phone number is mobile as well, you can make "local" calls back home or call around the globe without worrying about cell phone roaming or hotel surcharges.

How VoIP Works

To understand how VoIP works, it's helpful to compare it to how conventional phone calls operate. When you place a "regular" phone call using the Public Switched Telephone Network or PSTN (also known as POTS, for Plain Old Telephone Service) it's known as a circuit-switched telephony, because it sets up a dedicated connection between two points for the duration of the call.

VoIP, on the other hand, is known as packet-switched telephony, because the voice information travels to its destination in countless individual network packets across the Internet. This type of communication presents special TCP/IP challenges because the Internet wasn't really designed for the kind of real-time communication a phone call represents. Individual packets may, and almost always do, take different paths to the same place. It's not enough to simply get VoIP packets to their destination — they must arrive a fairly narrow time window and be assembled in the correct order to be intelligible to the recipient.

To improve performance, VoIP employs encoding schemes and compression technology to reduce the size of the voice packets so they can be transmitted more efficiently. Audio signals are also digitally processed in order to accentuate the voice information and suppress background noise. To conserve bandwidth, VoIP systems stop transmitting during lulls in a conversation and even generate some "comfort noise" to forestall the eerie silence that might make you think the call was disconnected.

VoIP uses a number of compression standards that offer different balances between packet size and audio quality. Generally speaking, the higher the compression the more simultaneous calls you can have, but the lower voice quality will be.

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