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Voice over IP (VoIP)

VoIP and IP telephony are becoming increasingly popular with large corporations to consumers alike. Internet Protocol (IP) is increasingly viewed as more than just a way to transport data, but also as a tool that simplifies and streamlines a wide range of business applications. Telephony is the most obvious example. VoIP—or voice over IP—is also the foundation for more advanced unified communications applications that can have an increasingly transformative effect on the way you do business.

VoIP Terms and Technology

Understanding the terms is a first step toward learning the potential of this technology:

  • VoIP refers to a way to carry phone calls over an IP data network, whether on the Internet or your own internal network. A primary attraction of VoIP is its ability to help reduce expenses because telephone calls travel over the data network rather than the phone company's network.
  • IP telephony encompasses the full suite of VoIP enabled services including the interconnection of phones for communications; related services such as billing and dialing plans; and basic features such as conferencing, transfer, forward, and hold. These services might previously have been provided by a PBX.
  • IP communications includes business applications that enhance communications to enable features such as unified messaging, integrated contact centers, and rich-media conferencing with voice, data, and video.
  • Unified communications takes IP communications a step further by using such technologies as Session Initiation Protocol (SIP) and presence along with mobility solutions to unify and simply all forms of communications, independent of location, time, or device. (Learn more about unified communications.)

Public Internet phone calling uses the Internet for connecting phone calls, especially for consumers. But most businesses are using IP telephony across their own managed private networks because it allows them to better handle security and service quality. Using their own networks, companies have more control in ensuring that voice quality is as good as, if not better than, the services they would have previously experienced with their traditional phone system.

Using VoIP

Chances are good you are already making VoIP calls any time you place a long-distance call. Phone companies use VoIP to streamline their networks. By routing thousands of phone calls through a circuit switch and into an IP gateway, they can seriously reduce the bandwidth they're using for the long haul. Once the call is received by a gateway on the other side of the call, it is decompressed, reassembled and routed to a local circuit switch.

Although it will take some time, you can be sure that eventually all of the current circuit-switched networks will be replaced with packet-switching technology (more on packet switching and circuit switching later). IP telephony just makes sense, in terms of both economics and infrastructure requirements. More and more businesses are installing VoIP systems, and the technology will continue to grow in popularity as it makes its way into our homes. Perhaps the biggest draws to VoIP for the home users that are making the switch are price and flexibility.

With VoIP, you can make a call from anywhere you have broadband connectivity. Since the IP phones or ATAs broadcast their info over the Internet, they can be administered by the provider anywhere there is a connection. So business travelers can take their phones or ATAs with them on trips and always have access to their home phone. Another alternative is the softphone. A softphone is client software that loads the VoIP service onto your desktop or laptop. The Vonage softphone has an interface on your screen that looks like a traditional telephone. As long as you have a headset/microphone, you can place calls from your laptop anywhere in the broadband-connected world.

Most VoIP companies are offering minute-rate plans structured like cell phone bills for as little as $30 per month. On the higher end, some offer unlimited plans for $79. With the elimination of unregulated charges and the suite of free features that are included with these plans, it can be quite a savings.

Most VoIP companies provide the features that normal phone companies charge extra for when they are added to your service plan. VoIP includes:

  • Caller ID
  • Call waiting
  • Call transfer
  • Repeat dial
  • Return call
  • Three-way calling

There are also advanced call-filtering options available from some carriers. These features use caller ID information to allow you make a choice about how calls from a particular number are handled. You can:

  • Forward the call to a particular number
  • Send the call directly to voicemail
  • Give the caller a busy signal
  • Play a "not-in-service" message
  • Send the caller to a funny rejection hotline

With many VoIP services, you can also check voicemail via the Web or attach messages to an e-mail that is sent to your computer or handheld. Not all VoIP services offer all of the features above. Prices and services vary, so if you're interested, it's best to do a little shopping.

Now that we've looked at VoIP in a general sense, let's look more closely at the components that make the system work. In order to understand how VoIP really works and why it's an improvement over the traditional phone system, it helps to first understand how a traditional phone system works.

Advantages of Using VoIP

VoIP technology uses the Internet's packet-switching capabilities to provide phone service. VoIP has several advantages over circuit switching. For example, packet switching allows several telephone calls to occupy the amount of space occupied by only one in a circuit-switched network. Using PSTN, that 10-minute phone call we talked about earlier consumed 10 full minutes of transmission time at a cost of 128 Kbps. With VoIP, that same call may have occupied only 3.5 minutes of transmission time at a cost of 64 Kbps, leaving another 64 Kbps free for that 3.5 minutes, plus an additional 128 Kbps for the remaining 6.5 minutes. Based on this simple estimate, another three or four calls could easily fit into the space used by a single call under the conventional system. And this example doesn't even factor in the use of data compression, which further reduces the size of each call.

Let's say that you and your friend both have service through a VoIP provider. You both have your analog phones hooked up to the service-provided ATAs. Let's take another look at that typical telephone call, but this time using VoIP over a packet-switched network:

  1. You pick up the receiver, which sends a signal to the ATA.
  2. The ATA receives the signal and sends a dial tone. This lets you know that you have a connection to the Internet.
  3. You dial the phone number of the party you wish to talk to. The tones are converted by the ATA into digital data and temporarily stored.
  4. The phone number data is sent in the form of a request to your VoIP company's call processor. The call processor checks it to ensure that it is in a valid format.
  5. The call processor determines to whom to map the phone number. In mapping, the phone number is translated to an IP address (more on this later). The soft switch connects the two devices on either end of the call. On the other end, a signal is sent to your friend's ATA, telling it to ask the connected phone to ring.
  6. Once your friend picks up the phone, a session is established between your computer and your friend's computer. This means that each system knows to expect packets of data from the other system. In the middle, the normal Internet infrastructure handles the call as if it were e-mail or a Web page. Each system must use the same protocol to communicate. The systems implement two channels, one for each direction, as part of the session.
  7. You talk for a period of time. During the conversation, your system and your friend's system transmit packets back and forth when there is data to be sent. The ATAs at each end translate these packets as they are received and convert them to the analog audio signal that you hear. Your ATA also keeps the circuit open between itself and your analog phone while it forwards packets to and from the IP host at the other end.
  8. You finish talking and hang up the receiver.
  9. When you hang up, the circuit is closed between your phone and the ATA.
  10. The ATA sends a signal to the soft switch connecting the call, terminating the session. Probably one of the most compelling advantages of packet switching is that data networks already understand the technology. By migrating to this technology, telephone networks immediately gain the ability to communicate the way computers do.

It will still be at least a decade before communications companies can make the full switch over to VoIP. As with all emerging technologies, there are certain hurdles that have to be overcome. We'll look at those in the next section.

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