By Susan J. Campbell, TMCnet Contributing Editor

VoIP (Voice over Internet Protocol) technology has been around for a while, but adoption is rapidly increasing as companies and individual users recognize the benefits. The growing popularity is driven by the fact that it makes calling our friends, family, and business partners much cheaper. Likewise, VoIP technology is also a nice fit for the company that chooses to open a virtual office in lieu of traditional workspace. 

The latest issue of Consumer Reports details why many businesses are switching to phone systems with VoIP technology, according to this Phone.com (News - Alert) blog. VoIP offers features that traditional phone systems can’t offer, and basic communications are available at much lower rates. Consumer Reports took a look at 25 different companies offering telephone service to as see how they rated.

Not surprisingly, many of the companies with low rankings were landline providers. And, of all of the top rated companies, 100 percent were using VoIP technology. The write up was limited in that it only provided a comparison of home telephone services. And, of those surveyed, almost a quarter have no home phone service at all, choosing instead to stick with just a cell phone. 

VoIP was originally made popular in the consumer market by the likes of Skype (News - Alert) and MagicJack. Skype offers a means to communicate via voice and video over the computer with other Skype users anywhere in the world, and its basic services are free. Such benefits make sense for those operating the virtual office.

A Skype call to a landline is still much cheaper than traditional rates – a true bonus for those with friends or family residing in another country. MagicJack offers VoIP plans that replace home phone service for as little as $19.95 a year. 

VoIP also makes sense for business lines, especially as more and more people are working from a virtual office space or in front of their home computer. Plus, standard telephone lines are just not able to do what VoIP technology can. And, VoIP technology can be administered over an existing Internet network such as cable or fiber, eliminating the cost of having a separate network.

As with Skype, another benefit for those doing business in a virtual office environment is that the cost of calling internationally is greatly reduced. VoIP technology allows for multiple calls to come across one line. And, the capacity to request a particular local number regardless of one’s location in the world is a definite plus. 

VoIP users should take note, however, that not all plans are created alike. A comparison of two plans for small businesses reveals that there are some serious cost differences. An unlimited plan through Phone.com consisting of two lines costs about $380 annually. A similar plan through Pure Play costs upwards of $600 a year. It pays those doing business in a virtual office environment to do a little research to maximize cost savings.