Double Click
Internet Telephony
Free telephone calls over the Internet may benefit your business.
FROM: MAY-JUNE 2006 ISSUE | BY JOHN W. YU
The first time I encountered Voice over Internet Protocol (VoIP) was at the COMDEX tradeshow about eight years ago, when several telephone companies demonstrated early prototypes of toll-free telephone service using the Internet. The technology involves converting telephone calls from analog signals into digital packets, which are sent over the Internet and then reconverted to voice format at the receiving end.
The early prototypes were very crude and could only support one-way traffic — that is, only one party could speak at a time. There were numerous delays and interruptions during a call, making VoIP a novel but impractical idea. The progress in the intervening years has been spectacular and the sound quality is now as good as that of traditional telephone networks. Best of all, there are a number of free services available, such as Skype (www.skype.com), which was acquired by eBay in October 2005 with great fanfare. Google, MSN, and Yahoo also provide free VoIP services for consumers.
VoIP calls can be made using one of three methods. Calls can be made to PCs or to telephones by:
- using a telephone designed for VoIP;
- using a regular telephone with a VoIP adapter; or
- using a computer with speakers and a microphone.
Consumer Use
Consumer use of VoIP tends to be PC-to-PC. Such calls typically require a one-time download of software and require both users to be on the same VoIP network. For example, Skype allows anyone to download its free VoIP software and to register for its free VoIP service. The PC should have a broadband Internet connection and a headset with a microphone, which can be purchased from any office supply or computer store for about $15. It is possible to use VoIP for PC-to-telephone calls, but these calls are not usually free.
North American cable operators and telephone companies have begun aggressively marketing VoIP services. The four major cable service providers in Canada — Rogers Cable, Shaw Communications, Videotron, and Cogeco Cable — offer low prices for VoIP service, with unlimited calls starting at as little as $19.95 a month. Other companies active in the VoIP marketplace include Telus, Vonage Canada, Voice & Data Systems Inc., Sasktel, Navigata Communications, Primus, and YakWorldCity.
VoIP services offered by telephone companies can be grouped into three types: fixed, nomadic, and foreign exchange. Fixed VoIP service users place VoIP calls from the location where their service is provided, i.e. at home or at work. Nomadic VoIP service users can make VoIP calls from any location connected to the Internet from the same VoIP phone number. Foreign exchange VoIP service users can make and receive calls in an exchange that is different from their physical location. For example, a business in Toronto can have a VoIP telephone number with a Vancouver exchange, and any calls from customers in the Vancouver area to this phone number will be toll free.
VoIP allows multiple parties to conference in on the same call. Another advantage is that users can carry on a voice conversation while concurrently sending chat messages over the same network.
Business Use
Businesses are increasingly capitalizing on the savings offered by VoIP. According to a recent study by Info-Tech Research, a Canadian-based IT research group that focuses on mid-sized enterprises, 50 per cent of small to medium-sized businesses use or expect to use VoIP by 2008. And according to the Probe Group, a New York-based market research group, the market for VoIP will grow to $7.1 billion in 2008. The rapid growth of VoIP spells trouble for traditional telephone companies, many of which are now offering VoIP services, thereby cannibalizing their money-making long-distance services.
Apart from savings in long-distance charges, business use of VoIP has the added advantage of an integrated voice/data infrastructure: instead of maintaining separate sets of infrastructure for voice and for data, VoIP enables businesses to use the same infrastructure, the same technical staff, and the same Internet connection for both services.
Furthermore, VoIP enables a more seamless integration of voice and data, as voice becomes just one application among many designed to enhance a company's productivity. For example, mobile employees can pick up voicemail messages via the Internet from anywhere in the world without paying long-distance charges. Instead of using conferencing services, conference calls can be arranged with just a few clicks of a mouse, at significant savings.
Risks and Opportunities
Despite the cost advantages, there are additional risks inherent in Internet telephony. For example, VoIP is vulnerable to Internet connectivity interruptions and power outages, and VoIP servers are more susceptible to malicious attacks by hackers than existing phone networks. VoIP gateways also risk being hijacked by hackers for unauthorized calls around the world. Even so, it is clear that VoIP is here to stay. Given the many advantages offered by VoIP, don't be surprised if it becomes the dominant form of telephone service within a few years.
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John W. Yu, MSc, CDP, FCGA, has been in the IT industry since 1970 in a broad range of roles in technology and in management. He is vice-president of IT at
CGA-Canada and the co-ordinator of "Double Click."