WHAT IS VoIP?

VoIP is an acronym for Voice over Internet Protocol (IP), which simply refers to sending telephone calls over data networks such as the Internet instead of the traditional telephone network. What makes VoIP so exciting to telecommunications engineers, technology buffs and smart small businesses is its potential for delivering new services that will combine voice and data, and its ability to offer some traditional telephone services, such as long-distance calling, without telephone company charges.

That potential comes from the efficiency of IP networks, which deliver information differently than the traditional public switched telephone network (PSTN). When you make a telephone call on the PSTN network, you’re using a dedicated circuit. IP networks, on the other hand, transmit your call efficiently in separate small packets that get reassembled at the receiving end. And because the packets carrying voice calls are delivered over the same IP network as data, VoIP will allow users to streamline their network requirements. IP telephony opens doors to cost savings on long distance and a new world of services that converge voice and data.

Moving data on IP networks is efficient, but one of the challenges presented by IP telephony is connecting the devices that turn voice into IP packets and vice versa. Specialized telephones, Internet voice gateways, telephone systems and other devices bridge the gap between the IP network and your ear. To foster a unified platform for VoIP equipment from different manufacturers, the telecommunications industry has established standards such as the widely adopted Session Integration Protocol (SIP). IP networks use the Internet Protocol, and VoIP devices use SIP.
 

Why is VoIP good for small business?

The most immediate benefit of VoIP for most businesses is savings on long distance charges. Companies equipped for VoIP can place long-distance calls over the Internet rather than the PSTN and avoid paying long distance charges. Since most companies already pay for broadband Internet connections, the only additional requirement is the equipment that connects telephones to the IP network.

In addition to the cost savings, bringing voice and data together on one network opens the door to new services. Advanced conferencing, unified e-mail and voicemail messaging and dialing calls by selecting from a computer contact list are just a few of the new service possibilities.

The benefits of VoIP can go beyond free long distance calling and new services. Because VoIP integrates voice calling with the IP network, small businesses of the future will only need one network to operate, rather than separate telephone and computer networks. A single integrated network is cheaper to install and maintain, and there would only be one network service bill to pay.

But fully converged networks are a long way off for most small companies. Today, traditional PSTN telephony is still crucial for the vast majority of small businesses. Since most of the telephone calls for the majority of small businesses come from local callers using the traditional telephone network, small businesses need to maintain their traditional PSTN links.