The VoIP Business Case

Traditionally, businesses have used the Public Switched Telephone Network (PSTN) for their business phone needs which is basically a circuit switched network. With this system a telephone call essentially takes control of the telephone line for the entire duration of the call. This is not a very efficient or cost effective way to make calls. In addition the PSTN is a heavily regulated network so taxes are charged on every telephone call.

The migration to VoIP business phone solutions has been rapid over the last few years. There are numerous advantages to VoIP technology over the traditional circuit switched system. For example:

  • No circuit switched Private Branch eXchange (PBX) is required. This is a large and very expensive piece of equipment used by larger companies to connect their internal telephone lines to the PSTN. The capital expenditure and operating costs necessary for a PBX can be substantial. With business VoIP all that is needed is Broadband Internet Access and a router to route each packet based call to the internet. The business VoIP service provider is then responsible for bridging the calls from the internet to their destination, whether that be to another VoIP phone user or the PSTN. This is often referred to as a hosted VoIP, hosted PBX, virtual PBX or IP PBX solution. All of the technology for handling your calls resides at the business VoIP service provider. You can access and change your VoIP features (e.g. adding numbers, forwarding calls etc) simply by accessing a secure website run by your business VoIP service provider.

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  • Business VoIP is a digital packet based system. Therefore numerous Internet phone calls can be made at the same time and can be sent over the same Local Area Network (LAN) that is used for your computer data needs. This is a very cost effective way to make telephone calls.

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  • The voice packets travel over the internet instead of the PSTN. The internet is not heavily regulated like the PSTN so calls are so cheap to make that many business plans simply charge a monthly fee and that covers all of your calls regardless of their destination.

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  • Many larger businesses have multiple locations some of which may be in the next state, others could be on the other side of the world. Usually these locations are connected to a company wide data network (Wide Area Network for example). With a Business VoIP system, extension dialing is such that the location is irrelevant. An employee in Seattle can call a colleague in London through a simple 4 digit extension and at no cost. This is because the call is sent over the company's network on the internet rather than through traditional long distance calling. This feature alone can be very attractive to businesses wishing to save money on their phone bills.

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  • With Business VoIP comes a vast array of features. Receive internet fax, regular fax and voicemail via email or with a web browser. Conference calling. Caller ID. Call forwarding. Going away on business - take your IP phone or Analog Telephone Adapter (ATA) with you and your number goes with you or configure your phone to call-forward. Many more features thrown in as standard.

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  • All telephone and data administration can be handled by one Information Services (IS) department. This can save a business a considerable amount of money.

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  • Business VoIP dramatically simplifies portability and installation. Assuming your IP telephone or ATA is configured for Dynamic Host Configuration Protocol (DHCP), you can move your phone anywhere and still keep the same phone number since it will receive an IP address dynamically. This is like moving your laptop and still being able to log in to your network. It is estimated that it can cost hundreds of dollars to move a telephone in a regular circuit switched network due to labor costs and the cost of reconfiguring the PBX. These costs are not incurred in a Business VoIP system since the IP network does not care about your location.