Productivity Portfolio

VoIP is an acronym for "voice over Internet protocol" but some shorten the phrase to "voice over IP". The IP part refers to the Internet, which is the method, used to transmit your voice. In simple terms, your voice is converted from analog to digital signals that are sent through the Internet and reassembled back into intelligible sound. This type of telephone service generally requires a high-speed internet connections.

Where is VoIP Used? 

Although VoIP may be a new term for some, chances are you've already had phone calls handled in this manner. Phone carriers have been relying on this IP telephony technology for international calls. Many businesses use this technology on their private networks.

You may also have used VoIP with some popular IM (instant messenger) programs. As example, Yahoo! Messenger offers the ability to place voice calls from your PC to any phone in the world.

IM clients aren't the only ones using VoIP, as there are other "soft phone" solutions. A soft phone is a software application that allows a computer or PDA to operate as a phone regardless of location. Some popular softphone applications include Skype  and FWD. Typically, if you are calling someone using the same service, the cost is free. Some of these services also sell special USB or Wi Fi phones.

Although soft phones are popular, recent attention has turned to companies such as Vonage, VoicePulse, Packet8 and Lingo. These companies provide or need other hardware such as a router or analog telephone adapter (ATA). These companies don't consider themselves to be phone companies, but many states and municipalities want to regulate them as utilities. This may help the states with revenue, but it may cause some players to drop out, as the compliance costs may be too high. Besides these trailblazers, we're also seeing phone and cable companies offering VoIP services.

Advantages of VoIP Service 

These companies offer voice plans for a fixed monthly fee based on minutes, calling area and features. While the cost savings appeal to many users, these services offer many other features. The list varies based on company and plan, but include such features as:

• Caller ID
• Call transfer
• Call blocking
• Scheduled DND (Do Not Disturb) times
• Scheduled callbacks
• Pick your area code
• Locate Me services
• Distinct ring tones
• Enhanced billing
• Web interface for billing, options and voicemail
• Phone number is not linked to a location and is portable

Disadvantages of VoIP Service

As expected, there are drawbacks to VoIP services especially if it becomes your only phone service.

• Requires an always on high speed Internet connection from a stable Internet provider
• Service may degrade if you're uploading or downloading files
• Disruption of service during power or Internet outages
• May interfere with services or appliances that need a voice grade phone line such as faxes, alarm systems, medical alerts, TiVo and so on
• Limited use of 411 directory information services
  
• 911 emergency services may not map to your location
• Quality of service may be less than standard phone service. For example, there may be a lag time or the caller may not sound as clear
• May have to dial number including 1 + area code

We expect many of these drawbacks to disappear as these VoIP services mature. If you're interested in using one, we suggest you do some research. For example, try to find friends or co-workers that are using one of these providers and ask how they like the service and if it was easy to install. Better yet, see if they will let you try their VoIP service. Also, make sure you have the proper requirements for the service. Some of these companies are particular about where their hardware is placed in relation to the router.