VoIP for the Rest of Us

VoIP for the Rest of Us

By Kieren McCobb

What is VoIP? The obvious answer to this question is sending voice traffic utilizing Internet Protocol, instead of sending voice traffic over the traditional circuit switched Public Switched Telephone Network, or PSTN. This is not to say that a voice call necessarily goes over the public Internet; some carriers have a private IP network. And that distinction is merely the tip of the iceberg in deciphering the ins and outs of VoIP.

Voice over Internet Protocol, or VoIP as it is commonly referred to, is not only here, but here to stay. And its getting bigger. Beyond defining VoIP, one can look at it from the network services side, as well as from the equipment standpoint. Knowing these approaches help identify when it is a valid solution for a customer.

What is VoIP?

Strictly stated, VoIP is voice traffic that uses IP technology to transmit a voice session, as opposed to the traditional, circuit-switched process. IP technology is a packet-based method of transmission.

Packetizing is the process of:

Converting analog voice elements into data bits, or digitizing;

Forming an envelope, the packet, of those bits (a group of data bits);

Attaching a header and footer to each packet to identify the origination and destination points; and

Re-assembling the packets into the voice signal the way it was spoken.

At least thats the theory. Reality differs, of course, so you need to pay attention to the potential drawbacks of VoIP, as well discuss.

A quick refresher on circuit switching: From initiation to termination, the call holds the complete attention of circuits dedicated to that call, and only that call.

A typical VoIP installation will consist of a broadband connection, frequently a T1 or higher, to the customers ISP. Multiple location customers, even better VoIP candidates, will have each of their locations equipped this way, with broadband connections to their respective ISPs points of presence. Inside the location, the customer needs supportive equipment in order to work with the VoIP technology. This will usually be a reasonably state-of-the-art, IP-enabled PBX. Since one of the advantages of VoIP is that ordinary Internet and customer data traffic joins voice calls in sharing the broadband connection, there is a high degree of crossover between the voice and data departments. Therefore, aside from equipment to support voice calls, some of the usual MIS customer premise equipment (CPE) will be involved with the overall application and installation.

At the end of the day, a VoIP customer will have a virtual meshed network, with all locations connected to all other locations, but without the need to install nailed-down circuits to do so. In fact, its even better.each IP phone is virtually connected to all other IP phones within the network, since each has its own IP address.

Brad Miehl, president of Atlanta-based master agency Microcorp Inc., points out one turn-key solution offered by an increasing amount of providers: What can be delivered is like an IP-based Centrex, including equipment and management of the system. And with the proper hardware and software (to perform the gateway function) installed, voice mail and any other applications you use at your office can travel with you. With a broadband connection such as DSL or cable modem, or if you are sitting on a network with a faster access like a T1, you can communicate as if you were at your desk.

From the Network Services Standpoint

Perhaps the most obvious advantage of installing a VoIP network is financial; reducing or eliminating fixed and variable expenses. The existing network services expenses of a hypothetical three-location customer, including examples of their costs:

POTS lines: 20 in each office at $30 each is $1,800.

T1 and other types of dedicated lines: Assume each office is connected by a 56K data line at $300 per office, totaling $900.

Internet access: Each office has a DSL connection at $250 per office, equalling $750.

Internal calls: At $500 per office, thats $1,500.

Other per-minute local, long-distance and international voice calls which are not internal: $1,000 per office, or $3,000.00

The cost of all these portions of telephone service adds up to $7,950 per month.

The alternative VoIP proposal changes things, because most POTS lines go away (but you keep a few in each site for backup). The data lines can be cancelled, separate Internet access becomes unnecessary and internal calls become free. The remaining usage-based expense is external calling, and that is at a much less expensive per-minute rate. International rates can be almost breathtakingly less expensive.

Lets look at how VoIP changes our example:

POTS lines: Five in each office at $30 each is $450.

Dedicated lines: None.

Internet access: A full T1 at each office, at $650 per office equals $1,950.

Internal calls: No charge.

Other per-minute local, long-distance and international voice calls which are not internal: Now at a much lower rate, figure $300 per office, or $900.

VoIP costs total $3,300, down from $7,950. Monthly savings: $4,650.

This is a simplistic example, but you get the idea. And when you present numbers like that to a potential customer, no matter how technical they may not be, they get it as well.

Good prospects for VoIP dont necessarily need to have more than one location. One of the greatest opportunities for agents is low-end, switched customers that have a broadband connection and are paying, perhaps, four to eight cents a minute for LD, and/or high intra-state rates, but cant justify a voice T1, says Ted Schuman, president of PlanetOne Communications Inc., a master agency in Scottsdale, Ariz. This could be very attractive for certain of these customers.

VoIP and Equipment Issues

A crucial piece of any decision to install a VoIP network, especially from the customers point of view, is what the network is going to be connected to. An IP-enabled PBX is pretty much mandated. The components needed to take advantage of VoIP are extra-cost options to the basic PBX platform. Together, these costs come to more than what a standard, non-IP enabled switch investment is. Mike Fuchs of MCI in Parsippany, N.J. points out this is not a problem: Customers who have to make the upgrade to a new PBX anyway are more open to looking into VoIP as a technology choice. They are also more apt to seriously consider the higher equipment price as a worthwhile purchase. Customers buy a new system for different reasons, but an impending event certainly can force the issue. Moving an office to a different location is a good time to examine the idea of a new system. Opening an additional, new site is another; so is the expansion of an existing location. Other possible occasions may be around the time of a merger or acquisition. Then, of course, there are the occasions when there is almost 100 percent certainty that a new PBX is going in: The incumbent switch is glaringly obsolete, or maxed out, with no more capacity.

As mentioned previously, phones in these PBXs are actually calling IP address-to-IP address, though it functions as extension-to-extension. Therefore, any device with an IP address (laptop computer, handhelds, IP phone, Dick Tracy wristwatch, etc.) can be called as peer-to-peer, and at zero cents per minute.

The cost of moves, adds and changes is an expense that can run into a considerable sum of money over time. With the convergence of voice and data functions in an office cabling plan, the cost of adding cable runs, jacks and re-wiring to accommodate telephone moves is drastically reduced. In a VoIP location, the extension, or IP address, travels with the telephone set; just bring your phone with you. Telecom managers love it because it cuts down on the administrative costs of managing the PBX.

An interesting benefit of a VoIP-supporting PBX is how you can do more with less, quite literally. The difference in efficiency of usage of a T1 deployed in a traditional PBX vs. an IP-enabled switch is huge, says Allen Borck, president of IP-enabling PBX provider ARC Communications. A T1 is a 1.544 Mb circuit, and most commonly is used to provide 24 channels, or talk paths, of 64 Kb each. These work like tie lines; 24 of them. But thats it, 24, at least in most cases. Bandwidth requirements are lower in an IP environment, says Borck. With VoIP, bandwidth can be dynamically allocated. Since business quality demands at least 25K to maybe 30K of bandwidth, but not 64, a 1.544Mbs-sized piece of bandwidth can be used to carry more than 24 simultaneous calls. For example, if the compression rate slices the T1 such that a voice call uses 32K, you can effectively get 48 calls going through that T1 pipe at the same time. And all while providing and maintaining the needed bandwidth that a business quality call should have.

Important Considerations

For those of us who have tried, or even just heard, a call over the public Internet on a dial-up connection, there is a lot of lingering skepticism regarding voice quality. Said skepticism is honestly earned. Until very recently, and in some cases still today, call quality sounded like it was anywhere from pretty darn good to Satans wife singing off-key. There are lots of reasons for this, but it has gotten much better.

The primary reason it has improved so much is the increase in availability and deployment of high-speed Internet access and VoIP offerings. High-speed access is the most important ingredient of a business quality VoIP experience. And with true, IP-enabled switch platforms, quality is almost not a problem. Now, VoIP is a viable choice for organizations with such equipment.

On the very small end, adaptors used in conjunction with services like Net2Phone Inc. and Vonage Holdings Corp. make VoIP an option for residential users. Consistent call quality is not where the larger systems are at, but neither is the pricing. And QoS tradeoffs (when there even is such an issue) can be easily acceptable, particularly in light of the lower cost.

Another consideration related to quality is how mission-critical each second of each call is. Rick Ribas of PlanetOne points out that certain applications may not tolerate even an occasional problem. For example, say a person reaches a call center and is then on hold for a period of time. After finally getting through he or she cant hear the party on the other end, or experiences echo or clipping. That caller is going to be upset, perhaps to the extent of hanging up and calling a competitor.

As mentioned previously, VoIP requires cooperation between both telecom and data CPE, not to mention between the managers of each of these departments. Those installing a VoIP network want to make sure that all personnel involved play nicely together.

Backup is important; you may want to lean heavily toward redundancy. In a purely VoIP installation, there is only one path in and out: the circuits to your carriers PoPs. If the loops are cut, the carrier goes down or experiences any other downtime at all, its not just the phones that are downits the data lines, fax, e-mail and all other Internet service. Everything. This needs to be thoroughly explained to a customer. If they still refuse to spend for some type of back-up solution, you should run, quickly. Or at least get a release stating that you explained the consequences of no secondary route, and the customer still declined to spend anything for it.

VoIP is a compelling offering in certain cases, but its also a good idea to have some back-up plans yourself, like a proposal for traditional circuit switched services for stubborn VoIP prospects.

This is not an exhaustive look at VoIP by any means, but I hope it helps stitch together some of the bits and pieces around the topic. Your master agent or carrier people are usually very eager to help clear up confusion and answer questions on the subject. Take advantage of their offers to see potential customers with you; VoIP and its benefits become clearer in a real-world setting.

Kieren J. McCobb is president of master agency TeleConfusion Removal Inc. In preparing the article, he interviewed people from equipment vendors, carriers and master agencies. He notes: I sometimes am tempted to believe that the Bell System must have employed at least a vice president-level person, together with that individuals entire department, whose function was Acronym Creation and Proliferation.