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VoIP – What Is It, How Does It Work, Why You Should Use It and What To Watch Out For!

VoIP, or Voice over Internet Protocol, is simply the process of making and receiving telephone calls via the internet, as opposed to using a standard fixed-line service.

When we talk about fixed-line services we are usually talking about either ISDN-based (Integrated Services Digital Network) services, often referred to as a digital telephone service; or POTS-based (Plain Old Telephone Service) services, often referred to as an analogue telephone service.

Most VoIP services rely on a communications protocol called SIP (Session Initiation Protocol).

VoIP providers will typically promote a product offering known as a “SIP Trunk” for businesses. A “SIP Trunk” will usually mention a number of lines as part of the package, and this is no different to having multiple analogue or digital lines in your existing phone system.
For example: If you have a SIP Trunk with 10 lines, you can have 10 concurrent calls (inbound and/or outbound) at the same time. This would be the equivalent of having an ISDN-10 service, or 10x analogue (POTS) service.

Some VoIP providers will also allow you to attach a larger number of Direct-In-Dial (DID) services to the lines.

A DID is a telephone number. You could have 2x lines, and 4x DID’s; or 10x lines and 100-range DID. In either case you could assign DID’s to each telephone extension or groups of extensions. You could also use the extra DID’s for marketing, so you can accurately count the number of calls that a particular marketing campaign produces.

I should point out that there is often confusion regarding the difference between VoIP and IP-based phone system’s (PBX’s), and the need to have a new IP-based PBX to use VoIP.

Put simply, when we refer to VoIP we’re referring to the communications medium or “trunk” you’re using when your phone system makes the call. In this case we are using the Internet to make the call, as opposed to a fixed line service in your office.

When we refer to IP-PBX’s and handsets, we’re referring to the way in which the handsets communicate with the PBX. In this case we’re using a data network to communicate, where the PBX and the handsets plug into a network switch, as opposed to having cables coming out of the PBX which are then connected directly (via wall socket) to the handset, as is the case of a “digital PBX”.

It is possible to have a phone system with digital handsets that makes and receives calls via a VoIP service. Some digital phone systems are able to be upgraded to support SIP trunks.

There are other ways to make older phone systems support VoIP, including things called “SIP Gateways”. These devices provide an ISDN or POTS socket which is converted to a network connection.

Whilst these do work, they add an extra point of failure that needs to be maintained and so in the most part I would recommend avoiding them.

It is also possible to have an IP-PBX make and receive calls via an ISDN or POTS connection. In this case the IP-PBX would have sockets for ISDN or POTS, or be connected via a “Gateway” device that converts one medium (IP) to another (ISDN or POTS).

The reason I’m telling you all this is to highlight that irrespective of where you are in the lifecycle of your phone system or your telephone contracts, you may be able to take implement VoIP services, or IP-based PBX’s in your business NOW which allow you to expand on in the future.

Alternatively, if your phone system was produced back when Telstra was called Telecom, you might want to consider an upgrade so you can take advantage of some of the features that VoIP and IP-based telephone systems could offer your business.

So why might you want to start using VoIP for your business?

The biggest driver for the adoption of VoIP is in call cost savings. Most VoIP providers will offer local and nation-wide untimed calls for about 10c/call, calls to mobile at around 19c/minute and international calls from 1.9c/minute – which is usually a significant saving over standard fixed-line call costs.

There are also savings to be made on inbound calls if you offer a 1300 or 1800 service. As you’re aware, if you offer a 13 or 18 number service, you pay for the incoming call. If you’re paying standard line costs per minute this can add up pretty quickly! However if you use a VoIP based service for your inbound calls you can benefit from the reduced call rates as well.

Many of the telecommunications providers have attacked the market with aggressive pricing on fixed line (PSTN and ISDN) services to compete with VoIP services, so it doesn’t hurt to shop around and compare what your call costs would be on a VoIP service versus that of one of the new fixed-line service offerings.

Another reason you might consider VoIP is for redundancy. If a telephone line is cut or accidentally disconnected, your only option is to get the provider to redirect the call – if you’ve even noticed!

With VoIP, most providers have built in features where they can automatically redirect calls to another number (for example, your mobile number) in the event that the connection between your phone system and the provider goes down.

If you want additional redundancy you can use a 3G or 4G based mobile service as a “backup internet link” for your phone system. In fact, when we first moved into our new office in 2012 I had our entire office running on a Telstra 3G service, including our phone system, whilst we waited for the big “T” to install our lines!

You may have also heard about “hosted VoIP PBX” services, whereby all the brains of the phone system is provided via the internet, meaning you just need to have handsets in your office. No need to have a box on the wall anymore!

A hosted PBX offers even more flexibility, allowing you to have handsets connected to your phone system wherever there is an internet service. This could mean you have a phone in your home office, which is part of the same phone system as the business one. Or you could have multiple offices all sharing the one phone system.

VoIP is not without its faults however. No doubt you’ve heard friends, colleagues and sales-reps tell you of horror stories with VoIP.

The biggest factor in the success or failure of a VoIP service usually comes down to the internet connection being used to deliver the service. There’s a number of factors that attribute to this, from the actual “speed” of the service, the quality of the service, and whether your VoIP lines share the internet service with your office.

An easy way to test your internet speed is using the free website www.speedtest.net.

As a general rule, each VoIP “line” uses around 100 kbps (kilobits) of bandwidth in both directions (sending and receiving). If you are putting in a 10-line system, you would need to ensure you have an internet service that can provide (at least) 1000 kbps (1 mbps) of bandwidth in each direction.

If you’re using a cheap internet service, expect sub-par results. Cheaper service providers oversell access to their network, meaning there’s no guarantee to the performance you’ll get. If it’s available, get a service from the VoIP provider. If you get an internet service from the VoIP provider your data will go directly from your network directly into theirs, with no interference from outside sources.

The single most common reason I hear of is because the VoIP service is using the same internet service that the rest of the office uses.

I’ve lost track of the number of people who’ve told me how they can implement Quality of Service (QoS) on the router to overcome this, but the truth is that once the data leaves your router all that is ignored!

The reason for this is that when the data leaves your premises and travels onto the internet, you have no control over how it will flow. It’s that simple.

The only sure-fire way of ensuring excellent results with VoIP is to put in a 2nd internet service that’s dedicated to VoIP.

Who should you trust with your business? We’ve had excellent success with MyNetFone’s VoIP services over the last 8 years and whilst I highly recommend checking their offerings out, a little birdie over at OntheNet has advised me that they are introducing business VoIP services and I absolutely love doing business with OntheNet, so I would definitely reach out to them and see what they can offer your business.

Word of warning – Watch out for ridiculously “cheap” services.

I’ve seen a rush for offers from telephone salespeople lately trying to cash in on this market, offering cheap services. For almost all of us, having reliable telephones is an utmost necessity in our businesses – so don’t believe everything the sales person tells you (most don’t understand the terminology they use anyway!).

Ask around, speak to an IT consultant or network expert and get references from other businesses who have been using their services for over a considerable time (6 months or more!). What’s the quality of the calls like? Do they get drop outs? If they have problems how do they find the support team? The last thing you want is to be left high and dry when things go wrong!

Have a technology related question? Either post in the comments box below or drop me a line.

First published in the Gold Coast Medical Association’sMedical Link” magazine, April/May 2014 issue.


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