By Graeme Klass (CEO Klassic Ventures)
You’ve probably heard about Voice over IP. In this edition of s.h.a.r.c. tech review, we will be giving you the low-down on this latest technological breakthrough that can reduce your telecommunications costs and how you can get started.
Simply, Voice over IP (VoIP) allows you to make phone calls over the Internet. IP stands for “Internet Protocol” and it is this protocol that allows you to surf the web and use e‑mail. Your voice (which is analog) is digitised and sent over the Internet where it is transformed back into your original analog voice at the receiver.
Firstly, you will need a broadband connection. You will need to have least a 256Kbps connection to ensure a decent call quality.
Then, there are a few of ways to actually “make the call.”
Skype is a free piece of software that is installed on your computer and connects you with other Skype users. Your computer needs to have a microphone and speaker and be connected to the Internet. The disadvantage is that you need to have your clients, suppliers, co-workers etc using Skype as well. The benefit is that you don’t need a dedicated VoIP provider (explained below).
MSN Messenger has traditionally been used for online chatting, probably something your children are into. The newest versions of MSN Messenger now allows you to both communicate your audio plus video over the Internet anywhere in the world for free (if you don’t count your Internet connection costs). Again, as with the Skype system, your clients, suppliers, co-workers need to have MSN Messenger installed on their machine, but you also don’t need a dedicated VoIP provider. However, MSN is from Microsoft and is therefore available to over 90% of computer users.
Over the past year a few new models of VoIP phones have emerged on the marketplace, some with videophone capabilities. The best part about these VoIP Phones is that it acts like a regular phone – you just punch in the number and you get connected as you normally would. However, in this case you will generally pay a local call charge plus a low-rate per minute rate. You will also need to connect to a VoIP service provider – they are responsible for routing the calls to the correct destination. Some provider charge monthly fee plus call costs - make sure you get the pricing for STD, mobile and international calls – as they are always good deals coming put all the time.
You should also ask whether your VoIP service provider can accept incoming calls, thus allowing you to have the same number for receiving and making calls.
Per minute call costs: call costs are continuously negotiated between VoIP service provider and will change rapidly (generally downwards). However, these costs are now less than the current call costs using existing telecommunications technology.
Line rental: you no longer have to pay a separate bill for your existing telephone phone line, just your Internet connection and your VoIP service provider.
Wiring: You no longer have to install separate cabling for computers and phones, thus effectively halving your costs.
The quality of VoIP systems are comparable to traditional phone systems, provided you have at least 256Kbps Internet connection. This is because the Internet Protocol has been updated so that audio and video signals being sent over VoIP are specially coded and sent through the Internet with a higher priority than other data (eg. Emails, Web Pages). Thus, VoIP service providers are now able to guarantee an acceptable level of service.
Ernst and Young have set up VoIP systems for their new offices in Perth and Sydney. The savings they have made on wiring costs on these two premises alone have allowed them to remove their existing PABX systems in Brisbane, Melbourne, Adelaide and Canberra and replace them with VoIP systems.
KPMG have begun rolling out VoIP systems and will slowly replace their existing telecommunications infrastructure in the near future.
Technology research firm, Gartner, says that companies have seen the benefits of switching to VoIP and now predicts that VoIP systems will be seen everywhere in corporate Australia over the next 18 months.
In conclusion, VoIP is a technology that can radically change the way we communicate with each other across the world. It has the potential to save you money, but as with all things in life, nothing comes for free. You will need to invest time and capital into switching your existing systems to be VoIP capable. Take a long term view and you will receive a decent return on investment.
Comments, feedback or if you want more information on this topic please contact the author at graeme@klassicventures.com