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VoIP Feature Article


January 26, 2006

Technology: Internet telephony - Talk is cheap

TMCnet News

(Accountancy Via Thomson Dialog NewsEdge)Can you imagine retreating to a world where you could not communicate via email or do a quick 'Google' when you wanted to find out about something? Well, there will come a time when you will find it just as difficult to imagine not using the internet to make telephone calls. A lot of companies have already made the transition to voice over internet protocol (also referred to as VoIP or 'voice over IP') and over the next couple of years they will be joined by a great many more.

VoIP is a technology that allows you to use your internet connection to make free local and international phone calls, instead of paying to use an old fashioned analogue line. It does this by turning the analogue audio signals that can be heard over the phone line into digital data that can be transmitted online - in the same way as the files you download and the email messages you send.

The technology has been around for some years, but the widespread availability of broadband has helped propel it into the mainstream. There are already millions of VoIP users worldwide and by the end of 2005 over two- thirds of Fortune 2000 companies will have deployed VoIP, according to Gartner; while Frost & Sullivan is forecasting that it will account for about 75% of the world's voice traffic by 2007.

These may turn out to be over-optimistic predictions, but according to Jeff Snyder, vice-president and chief analyst at Gartner, 'organisations have stopped asking why they should implement IP telephony and are now focusing on when'.

Business benefits

It's not hard to understand the reasons why. A move to VoIP promises significant business benefits. These include: better business continuity, better use of resources, improved productivity, improved mobility, operational cost savings (typically 30%) and reduced capital expenditure. But your experience of these will vary depending on a number of factors.

There are lots of organisations providing VoIP services; some are free, some are not - and they all operate slightly differently. Some internet telephony providers restrict your communications to people who are using the same service; others allow you to call anyone who has a telephone number, be it local, long distance or international, land line or mobile. Some services work only over your computer, and operate best with a microphone headset or a USB phone, others require a special VoIP phone and some enable you to use a traditional phone through an adaptor.

Incoming phone calls can be automatically routed to your VoIP phone, so you can receive them anywhere that you can get online, as long as you've got the necessary hardware. With some services you can also forward your VoIP calls to a traditional phone or mobile, so it doesn't cost others any extra to call when you're out of the country.

Skype's the limit

At the moment, with more than 12m users, Skype is the single most popular VoIP provider. 'My cell phone doesn't always work outside the US, so I use Skype,' says CPA Gerrard Ramsay. 'It is a lot more economical than any of the other alternatives.'

This is because as long as you've got a phone and an account with an internet service provider, Skype is essentially free. You do need to pay when you use it to talk to non-Skype users. But as the 'SkypeOut' global rate is d0.017 (0.01p) per minute for calls to most countries, the cost is negligible.

Unfortunately, free services tend to be relatively unsophisticated and many organisations want more than just cheap calls. So, in the next issue of Accountancy, we will look at VoIP providers who specialise in the corporate market. Their services are not free, but they can still offer substantial cost savings and significant business benefits.


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