Guide to VoIP MoneySuperMarket

Voice over Internet Protocol (VoIP) – also known as an internet phone or a broadband phone is a technical term for what is actually a straightforward concept of making calls over the internet. VoIP has expanded in popularity in recent years and is now seen as a genuine and money-saving alternative to making phone calls on a traditional landline.

So could the writing be on the wall for standard phone services? Is VoIP really the future? And how does it all work? This guide to VoIP will explain.

What is VoIP and how does it work?

Voice over Internet Protocol may sound like a new innovation as it has only become popular in homes over the last five-ten years; however, it actually dates back to the 1970s when it was used as an experiment by the US department of defence.

Traditional phone networks use circuit switching – that is when a call is made, circuits are switched in the intervening exchange creating a connection between the caller and the person being called.

By contrast, VoIP employs packet switching – which has typically been used by data networks connecting computers. Within this network, data is divided into small packets which are given identifying information and are then transported across the network. At the end of the line, they are reassembled to provide the information to the receiver.

This process is now applied to voice calls through VoIP. In the past packet switching was rarely used for voice calls because the reassembling of information would seriously deteriorate the quality of the call. However, thanks to improved systems which now give priority to voice calls over data, the quality of VoIP is now arguably on the same level as a regular phone call.

With the emergence of the internet and its incredible boom in popularity, particularly in the late 1990s, more companies began to explore VoIP as a serious alternative to regular landline calls.

There are now a host of companies that offer VoIP services in the UK. These services take a variety of forms:

  • PC to PC – This form of VoIP takes place with a headset and is usually used on an instant messenger service. A common example is Skype.
  • PC to telephone network – This is when only the caller uses a headset. A common example is CallServe.
  • Telephone network to telephone network – When the caller uses an adaptor on the telephone. A common example is BT Broadband Voice.
  • IP phone to telephone network – This is when the phone itself is IP enabled and so there is no need for an adaptor. A common example is Vonage.

It has been suggested that Voice over Internet Protocol (VoIP) could be the long term successor to regular phone calls. So is VoIP as good as it sounds? Just what are the benefits of this new service and are there any disadvantages?

What are the pros and cons of VoIP?

The biggest advantage of VoIP is that it offers significantly cheaper calls than traditional landline services – including, with many services, free international calls.

If you plan to use VoIP to contact other VoIP customers, then call charges are very straightforward – in many cases they are completely free. Clearly therefore, the long term aim is that as VoIP becomes more popular you will be able to contact more and more people using this service, saving significant amounts of money.

Where VoIP is less straightforward is how it pertains to calls that are made or received by people who do not have VoIP. In this case, they are reliant on gateway services.

These gateway providers give you a telephone number which allows you to call people on regular landlines and mobiles, and to receive calls from those numbers too. Unlike VoIP-VoIP services, this type of calling is not free as there is usually a flat monthly fee to pay out.

However, calls made in this manner are generally much cheaper than making landline-landline or mobile-mobile phone calls. This especially applies to the international rates offered by companies such as Skype and Vonage. As the calls are all made over the VoIP data network, it makes no difference whether you are talking to someone in the USA or the UK – the call costs are the same. As a result, most providers offer free international calls to select countries as part of their monthly subscription fee.

VoIP is also extremely beneficial for businesses. Not only does having one supplier for voice and data provide greater efficiency, but it also means computer applications and technologies can be linked which helps to streamline the working environment. If a business operates over several sites, VoIP can make good financial sense as it avoids expensive internal calls – and even if a business operates at just one site, using VoIP can be beneficial when contacting customers.

The major concern with VoIP remains the quality on the lines. However, this fear has greatly decreased in recent years and it is now difficult to tell the difference between a regular phone call and a VoIP to phone network call. Perhaps the biggest problem currently facing VoIP therefore is its lack of familiarity and education on the subject – not enough people know about it to take full advantage of its potential. However, its popularity is increasing and will no doubt continue to do so.

So now you’ve learned about VoIP you might be eager to get online and start making free phone calls. This section of the VoIP guide will put you on track.

What do you need to make VoIP work?

The first thing you need to join the VoIP revolution is a Windows or Mac computer and a broadband connection. For the most basic form of VoIP, getting started from there is easy – all you will need is:

  • An instant messenger service – common examples includes MSN Messenger, Yahoo Messenger, Skype and ICQ. All of these services are free.
  • A microphone or integrated headset.
  • Headphones or speakers.

You should choose your software wisely. Find out what services your friends and family use as you might not be able to call from one instant messenger service to another.

If you wish to take VoIP to the next level and make calls to non-VoIP customers you will require an IP phone. This is connected directly to your modem or router and you can make phone calls without even switching your computer on. IP phones are available for free as soon as you sign up for monthly subscriptions from many providers.

In addition, some providers have now released dual-purpose phones, from which you can make VoIP calls as well as conventional calls via a landline.

What else does VoIP have to offer?

Most VoIP services come with a number of bonus services. These may include:

  • Anonymous call block – Giving you the chance to shut out calls from numbers that are withheld.
  • Caller ID – Allowing you to see who is calling before you pick up the phone.
  • Call diversion – The ability to send incoming calls to other UK phone numbers.
  • Call waiting – The chance to take an incoming call while you’re still busy with another phone call.
  • Do not disturb – Have your calls instantly forwarded to your voicemail without ringing at your end.
  • Emergency calls – Previously lacking on some VoIP services, most providers now allow you to call emergency numbers just by dialling 999 as you would on a conventional phone.
  • Ring back – A feature that allows you to continually call a busy line until you get through.
  • Three-way calling – Particularly useful for small businesses looking to hold conference calls.
  • Voicemail – Not just an answering service on your phone, but one that can be accessed via email or online.

These are just some of the features that may be offered by a VoIP provider.

Hopefully by reading the earlier parts of this guide you now have a greater understanding of what VoIP is and how it works. So should you opt for VoIP internet phone instead of a landline? This section will help you decide.

Which should you c
hoose – VoIP or a landline?

The choice between VoIP and landlines is not as straightforward as it may seem given the huge gulf in costs of landline calls by comparison to the cheaper VoIP services.

The main reason for this is that some VoIP services won’t offer the same features you would expect from a traditional landline. For example, some VoIP providers still will not allow you to call the emergency services and some international destinations are restricted. Furthermore, if you were to suffer a power failure or a loss of internet service you would not be able to use VoIP – or even inform your ISP that the service was down, unless you had a mobile phone.

In addition, as most people have ADSL broadband, you will still need to pay line rental. As a consequence, at this stage, most users cannot dismiss landlines outright – and instead prefer to use VoIP to complement their home phone service.

Certainly VoIP can be hugely beneficial when used in this manner. If you have a family or friend overseas, the ability to call them, free of charge, whenever you want, should not be underestimated.

Think about your current phone bill. Do you make a lot of international or long distance calls? Are your bills high? If so, VoIP could offer you large savings even though you will have to pay a set monthly fee to use an IP phone.

At the moment therefore, it seems that VoIP will be used alongside landlines and not as a direct replacement. However, it’s clear that VoIP technology is already useful and may very well soon be the standard in all homes.

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