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Understanding The Advantages And Disadvantages Of

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Autor:  anton  11 November 2010
Tags:  Understanding,  Advantages,  Disadvantages
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This paper provides an outline to our Learning Team C’s Project, Understanding the Advantage and Disadvantages of Voice over Internet Protocol (VoIP). This outline will cover the following areas: Provide a detail description of what is VoIP; Identify what technology is involved with VoIP; Provide future trends in VoIP; Provide example of companies involvement with VoIP; Identify regulatory issues surrounding VoIP; and identify any global implications of VoIP.

1. What Is Voice Over Internet Protocol (VoIP)

a. VoIP, or Voice over Internet Protocol, is a method for taking analog audio signals, like the kind you hear when you talk on the phone, and turning them into digital data that can be transmitted over the Internet. VoIP is a revolutionary technology that has the potential to completely rework the world's phone systems.

2. Technology Involved With VoIP

a. Once people realized that they could use a computer to send traditional telephone traffic over the Internet, there was no looking back. Voice over Internet Protocol (VoIP) got its start around 1995 when hobbyists started testing the concept ( The VoIP industry didn’t really start until 1998 when the first companies started offering PC to phone service thereby allowing a PC user to call a traditional landline telephone. AS time passed and larger companies like Cisco and Lucent started getting involved in the industry, in 2000 VoIP services accounted for 3% of the voice traffic ( As these larger players came on board there was much discussion and development of competing technologies.

b. There are many varieties of VoIP. A VoIP calls consists of 2 parts. One part is the signaling that will control the call flow like sending a busy message or hanging up the call. Another part is the media, also known as RTP (Real Time Protocol), which is the actual voice part of the call. Each part has many ways to be implemented. While some manufacturers have tried to make their protocol the standard, most follow the guidelines of the IETF (Internet Engineering Task Force) and ITU (International Communications Union). The two prevalent signaling protocols today for consumer use are SIP (Session Initiation Protocol an IETF standard via RFC 3261) and H.323 (an ITU standard) which is constantly evolving. Most companies will use SIP to the consumer location and H.323 protocols for inter Telco (Telecommunication company) communication. As far as media goes, many codecs exists for conversion from analog to digital. These codecs determine the bandwidth and potentially the quality of the call. The codecs in use most today for consumers are G.729 and G.711 ( Other codecs that are quickly becoming widespread are Skype and iLBC (Internet Low Bitrate Codec). Also of note is the T.38 standard for sending faxes. As you can see there are many ways to send a so called VoIP call that most people do not think about.

c. VoIP technology is also used a many ways. We have already explored the consumer market which includes companies like Vonage and Skype. Businesses also use VoIP for interoffice and intraoffice communications. Many products exist on the market to handle this traffic. Two of the most popular are the Cisco Call Manager and the free Asterisk product Linux operating systems. The great thing about the products is that they run on normal computer systems and therefore can be provisioned and monitored by the companies IT department. Another use of VoIP includes communication between telcos. So the customer would place a call from their PSTN through their telco, the telco would convert the call to VoIP signaling and media to send to a vendor for termination. The vendor could receive the call and convert it back to PSTN to send to the dialed number. Once the call is established, part will be PSTN and part will be VoIP, but both ends may never know VoIP is being used.

d. Cisco Call Manager and Asterisk act like a gateways and can handle VoIP calls in a variety of formats. The two PBX systems can link various protocols including standard telephone lines like POTS and PSTN with VoIP protocols like SIP, MGCP, iLBC, SCCP, G.729, G.711, and H.323. These systems also handle traditional services such as voicemail, call waiting, and three-way calling.

e. VoIP technology still has some drawbacks to overcome. The main ones are voice quality and echo. The great news is that there are many companies trying to make it better in terms of quality, price, and integration abilities. You can already see that with the free products offered like GoogleTalk that offer free phone calls to standard phone lines. The future for VoIP and its associated technologies is bright indeed.

3. Future Trends with VoIP

a. Less than fifteen years ago, internet access was a service provided by our public switch telephone network (PSTN), and today the roles has be reversed; voice has become a service to the internet.

b. When VoIP was introduced to the market there were many obstacles that needed to be addressed. For years the world has used traditional phone lines to communicate with one another. The companies that owned and operated these phone lines have always provided a reliable service. The new VoIP companies would have to establish a reputation of providing the same reliable service.

c. As the VoIP companies began to become established in the market, a new obstacle arose. Consumers using VoIP services were not able to be located by 911 services. In May of 2005 the FCC ordered that all providers offering VoIP services have a solution that enabled a caller’s location and telephone number is available for emergency reasons. If providers did not comply with this, they would have to stop offering services. Since then solutions have been developed for this functionality but are still not widely implemented.

d. As VoIP begins to become reliable and offer more advanced features, more and more consumers are signing up to take advantage of VoIP services. VoIP is offering consumers an inexpensive and reliable method of communication to people all over the world. Both businesses and personal homes are now frequently utilizing these services.

e. With the adoption of VoIP services increasing, many companies have started to offer these services. Cable companies are now offering a bundled package offering cable television, high speed internet and unlimited phone services all in one monthly bill. Many smaller companies have formed offering both businesses and homeowners the option of VoIP services. It is predicted that in the future service providers will begin consolidating or developing partnerships to secure access and continue enhancing services, (Key VoIP Trends to watch in 2006).

f. Many VoIP providers are also working on developing a solution to use cellular phones for VoIP services as well. Companies such as Skype are now offering software that can be installed on your mobile phone. Your mobile phone is then used to dial your PC, which in turn dials out to the person you are trying to reach. This feature will allow consumers to have all the features of a product like Skype and it will also decrease the cost of long distance calls for the mobile phone users.

g. One issue that may hinder VoIP service providers is the fact that in order to provide these services the consumer must have broadband access. Currently approximately 50% of U.S. households have broadband access. Broadband will need to continue to push forward and become available in more households for VoIP to continue growing.

h. Several future enhancements of VoIP will only continue to grow its popularity. Enhancements such as full motion video, video conferencing and continued improvement of the sound quality and portability will become widely used. It won’t be long before everyone will be able talk to their long distance friends and family and feel like they are in the same room together. These continued improvements will allow families to stay closer together and for businesses to provide clear communication from anywhere around the world.

4. Example of Companies Involved with VoIP

a. VoIP has been playing more of a significant role in technology as telecommunication and broadband begin to revolutionize business and industry. VoIP has a real business value, but what or how does it benefit a business. If VoIP is integrated into the business process, then there will be a benefit. Integrating VoIP into vertical applications is key, said Charles McDonough, CTO of SipStorm Inc, a Florida-based VoIP service and equipment vendor. For example, if a vendor promised a dentist a 20% reduction in communications costs, it likely wouldn't be worth the dentist's time. But if you sold that dentist a system that would automatically reassign cancelled appointments, using an interconnected voice and calendar application, "that's money in their pocket," he said. If you can say, 'I can help you save more money or make money' then it's worthwhile for the customer (Ascierto, 2005).

b. President of enterprise systems at Siemens Communications Thomas Zimmerman pointed out that his company had successfully integrated voice with the manufacturing processes for one of its clients, which he didn't name. When a customer called his client for an update on an order, the client was able to automatically look up at what stage in the manufacturing process the order was. "The progress of the order ... is automatically updated on the desktop," he said (Ascierto, 2005). VoIP is beginning to play a role in the integration of software; this integration is streamlining the business process for business owners and for the consumer.

c. A survey taken in 2005 is beginning to show that VoIP is beginning to take hold in the business realm. According to a Harris Interactive poll businesses and consumers are reluctant to embrace VoIP technology. Participating in the poll, an Albany New York based company known as Convergence Technologies has taken the risk to adopt VoIP into their business process. The Harris Interactive poll has indicated that 87 percent of businesses are aware of VoIP technology with only 36 percent of consumers being aware of VoIP. Only 12 percent of businesses admitted to utilizing VoIP while only three percent of consumers admitted to utilizing it. With the technology seeming complicated and unproven most of the businesses and consumers surveyed mentioned that they were going to wait until VoIP has become more of a mainstream. The good news is that the survey pointed out that most of the businesses and consumers who had integrated VoIP were satisfied with the benefits that it has given them thus far (D’Errico, 2005).

5. Regulatory Issues Surrounding VoIP

a. Why has Internet telephony attracted so much attention and optimism over the past year? The obvious reason is that it has the potential to significantly reduce the cost of long distance voice communication. Additionally, Internet telephony (or the more generally, Voice over IP) introduces entirely new and enhanced ways of communicating.

b. Traditional telephone service has being regulated for many years, by controlling cost, access and right-of-way. However; new challenges are popping up daily when it comes to regulating VoIP; there as be talks about taxing the internet or even paying something like a tariff when a packet travels through a particular route.

6. Global Implications of VoIP

a. Voice over IP has had an increased use throughout the globe and lately there have been many implications of global use of VoIP. Many companies have started to launch VoIP systems in order to better communicate with other companies across the globe. Exchanging an interconnection for voice and fax traffic internationally is something that is of importance to companies and thus VoIP becomes a key factor for business with other companies. Global VoIP can enable carriers several advantages for its use. Many of the advantages of using VoIP for global business include lowered costs, easier teleconferencing with companies and vendors, and more control over the communication system.

b. There are many advantages in global VoIP. One of the advantages for global VoIP is the reduced cost of international calls. As mentioned earlier, VoIP can enable an easy means of teleconferencing and there are also free options available for using VoIP. This is mainly due to the large increase in usage of instant messaging and VoIP applications such as Google Talk and the increasingly popular Skype program which is now owned by Ebay. These applications can create an easy way to communicate via the computer using voice communications to anywhere in the world. All of this is a very cost effective manner to conduct business and can be invaluable if a company needs to communicate with other clients in another part of the world. Another nice advantage can be the flexible pricing packages available for using VoIP. This goes along with the general reduced cost of pricing since it can save a company more money in the long run for conducting international business and keeping in touch with global clients. One other nice advantage for global VoIP is the high quality of call completions and more route stability. Finally, global VoIP can offer a fully managed solution for provisioning, routing, and also quality monitoring. There are so many ways global VoIP can help a business succeed in international business. Not only can it provide a secure, cost-effective solution to those wishing to expand VoIP portfolios across international markets, but it can also help eliminate multiple private line connections with the use of single IP connections.

c. Research shows that the global VoIP market is increasing rapidly among businesses. There are now just fewer than 19 million subscribers to VoIP services when it used to be just over 10 million a few years ago, constituting an 83% total growth. Also, the total number of people using PC-to-phone calls and retail phone-to-phone calls increased by 10 million within only one year. The United States market more than doubled in the number of subscribers in just one year. Companies such as Vonage continue to be one of the largest VoIP service carriers, but cable companies have recently become a threat. The market is growing all over the world as well, with Europe having a large increase in VoIP usage and France playing the role of the dominate VoIP market user. The Asian market has the slowest growth of VoIP usage due to some regulation barriers among certain countries, but the usage is expected to increase as well. Overall, VoIP is definitely becoming a larger part in the business world and among companies worldwide, and usage can only increase in the near future. Overall, global VoIP communications is a huge benefit for companies to incorporate into business activities. This is mainly due to the quick return on investment. For companies with an established long distance service, installing VoIP at multiple sites has caused a return on investment of only six months or less. While VoIP is still in its early stages, it will quickly become a major factor for the whole telecommunications industry, in local and global services. VoIP technology can only improve and as more companies see the advantages of VoIP in the global economy and in business, then VoIP will become a mainstay and incorporated into more important business processes.

7. Conclusion


Ascierto, Rhonda. "VoIP vendors sketch industry future." Computer Business Review Online 28 Oct 2005 14 Sep 2006

D'Errico, Richard A.. "Harris Interactive poll finds mixed news for VoIP adoption." The Business Review. 15 Mar 2005. Bizjournals. 15 Sep 2006 .

Linderholm, Owen. “VOX for Skype Brings the Power of Skype to Every Mobile Phone in the World.” Retrieved from on September 14, 2006.

Unkown. “Key VoIP Trends to Watch in 2006.” Retrieved from on September 14, 2006.

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