In recent years, there has been a shift in the types of devices people are using for communication. We’re beginning to see a convergence from phones, email, instant messaging etc., to the use of single devices and applications. For example, voice communications and data transfer can be combined in an easy way that will enable new business opportunities. Companies such as Skype (News - Alert) are already exploiting these, introducing Internet telephony applications that utilise peer-to-peer networks, but what are the drivers and inhibitors of VoIP?
The market for VoIP has been driven by a number of factors. Probably the biggest driver of VoIP adoption is the lower cost of communication, both for the provider and the customer. Rather than paying per minute for the phone call as the customer once would have done, the business model has changed and the customer now pays for an integrated package instead. For example, a bundle of services incorporating Internet access with mobile and VoIP telephony are available. In terms of cost, this creates a win-win situation for both the customer and the service provider – costs to run the service are lower for the Internet telephony provider, who can then pass on their savings to the customer, for whom the Internet service charge for unlimited use is cheaper than paying for individual calls.
Another major driver for VoIP take-up is the overall experience for the user. Firstly, ordinary telecom networks are usually location limited, so users need to choose an operator that offers services in their geographical area, which can cause inconveniences when travelling. Internet telephony operators do not face the same restrictions. Also, in terms of functionality, VoIP users benefit from better features such as being able to view online who is available to contact, prior to calling them. The voice quality is also better than with traditional phone lines, when wide band codecs are used – unlike some early VoIP experiences!
It’s not just for private use that VoIP is beneficial – there are a number of business benefits to using VoIP, which have seen it grow significantly in recent years:
- It gives employees the geographic independence to work from their homes
- It allows companies to have increased features without the capital investments, and offers local and long distance calling for a fraction of the previous cost – these new feature sets enable VoIP providers to offer services that are not currently offered by traditional telephony products
- VoIP has greater technological longevity than PSTN – with VoIP, there will not be the need to migrate for at least 15-20 years, whereas the figure is likely to drop to 5-10 years for PSTN
- VoIP is ‘future-ready’; new technologies such as video, are designed to be integrated with VoIP and not PSTN
Traditional phone services can be expensive for businesses to build and must have the capacity to address potential growth, increasing initial costs and creating an under utilised investment. Data in traditional telecom arrangements can only be transmitted at low rates, making it poorly suited for delivering integrated Internet communications or rich multimedia content.
Another drawback with traditional phone systems is that companies must purchase expensive equipment that is scalable to their potential growth, whereas scalability is cheaper for VoIP. Costs involved include hardware, installation, maintenance and dial tone charges, as well as costs for local and long distance calling, maintenance contracts and annual upgrades. On the flip side to this, companies who have invested heavily in their traditional phone systems may be reluctant to move away from this investment, only moving to Internet telephony when their hardware has reached the end of its life cycle.
So what are the inhibitors to VoIP? Some see the biggest inhibitor to VoIP as being the knowledge gap, with resistance coming from people who have a fear of new technology and are happy to continue with telecoms, which has been long-established. This is linked with the point mentioned earlier, that companies who have made significant investments into traditional phone systems will be reluctant to lose this investment by moving to VoIP. That said, we have successfully overcome similar barriers in the past – moving from video to DVD, fixed phones to mobiles, film to digital camera, from vinyl, to CD, to MP3 and so on. So in the long term, this should not be a barrier to people or businesses accepting VoIP.
Another VoIP drawback can include the signalling protocol e.g., session initiation protocol (SIP) working in complex network environments, where problems can sometimes be experienced. For example, getting SIP to work over network address translation (NAT) requires considerable knowledge and effort.
Also, although volumes of traffic are huge, profits are relatively low compared with PSTN. Major hardware investments are still needed to support high numbers of simultaneous users. However, from the end user’s point of view, they receive much better value for money.
Security is another perceived barrier to the take-up of VoIP. To overcome this issue, there is a need to re-educate people. There are a range of technologies available in place that can make VoIP secure. With appropriate best practices and a set of complementary technologies, it can be achieved. Let us not forget that traditional telephone systems had security weaknesses too.
So, in answer to the original question, although VoIP has made significant advances towards achieving its business potential, it has not yet fully achieved this. Moving forward, we will see more people and businesses migrating to VoIP, adopting it as they realise the infrastructure costs are lower and the potential benefits are higher. Through its products and partners, Aculab (News - Alert) is dedicated to helping customers in the IP arena and provides cutting edge enabling technology and personal assistance to achieve this. What are you waiting for?
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