Have you been looking for a good explanation about VoIP?? 

Well here is what you are after….an explanation of VoIP without too much techo babble and not trying to sell you anything.

There are way too many myths about VoIP, where it is going and what it can do for your business. We are passionate about you getting the right information to you. We will probably upset some other providers but you should have all the answers before you invest in a phone solution.

Note: this section is mainly focused on VoIP for business, although the basics of voice is the same for residential. We will update this in time.

What Is VoIP?

Traditionally, your land-line voice calls get from your house or work to the called person via a pair of wires that connect your place to the local telephone exchange. The call then goes across the telephone network to the called person’s local telephone exchange and then a long a pair of wires to their premises.

Voice over IP works by sending your voice (telephone) call across a data network (i.e. the Internet or a private data network). Now, IP stands for Internet Protocol and is the method used for sending data such as emails and other files between PCs and/or across the Internet.

IP works by dissecting the data (say, an email) into small blocks of data, then adding the recipient’s Internet address information to these blocks of data so they are ready to be sent out onto a network. The network devices that form the Internet (or private data network) determine where to send these data packets based on the Internet address.

Similarly, for a voice call your speech is digitised (much like music on a CD is digitised) so it is now data, and dealt with the same way as other data (packetised, addressed and sent).

The difference with a telephone call across a data network compared to sending an email is that the voice call needs to be ‘real time’. You don’t notice if there is a one or two second delay when receiving and email…but get those delays during a VoIP telephone call and the voice data starts to break up and “it sou-nds l-i-k-e th-is!”.

IP was designed for data files…not real time voice conversations. Sometimes within a network the data packets can go missing (if they become corrupted the network devices will simply dump them) and so there are mechanisms built in to tell the sending device (i.e. PC) to resend a packet because the receiving device did not receive it.

This recovery mechanism does not work in a real time situation (i.e. a VoIP call). There is not time to stop mid-sentence (or mid-word) to wait for a missing bit of data to be re-sent.

These are the challenges that VoIP faces…and is the reason why many people have all sorts of problems with a VoIP service. VoIP can be built to work quite well, but needs to be designed and implemented correctly to ensure that it is acceptable.

What Are The Benefits Of VoIP?

By implementing VoIP a business can take advantage of a number of rather cool features, such as:

  • Voice-mail to Email
  • Remote Workers )i.e. phone extension at home)
  • Possible cost savings (see below for more on this)
  • Adds, moves and changes to handsets can be cheaper
  • Can share data cabling with PCs (but not recommended…read on)

If you are thinking of moving to VoIP it is worth analysing what the drivers for this are. Below we talk about costs & savings associated with VoIP. We also look at VoIP system configurations as there are a number of ways of implementing VoIP.

What Are The Disadvantages Of VoIP?

For all the hype that is out in the market place saying that VoIP is the best thing since sliced bread, it certainly does have its disadvantages. It is worth taking these factors on board when determining whether to move to a full VoIP solution.

Disadvantages of VoIP are:

  • Occasional quality issues as described above
  • Phones require external power (either power pack or special data switches means additional point of failure)
  • VoIP Handsets are generally more expensive than other phone system handsets.

Can I Save Money With VoIP?

The short answer is ‘Yes & No’. VoIP providers will sell their wares by saying you can save up to 50% on your call costs by using VoIP, but let’s analyse that a bit closer.

  • Line Rental for a VoIP service is generally cheaper than a fixed line, but remember that the Internet connection needs to be far greater in speed to accommodate voice traffic. If you only have 2 or 3 lines then this is not generally an issue as a good ADSL2+ connection will suffice. Any more lines than this and you are probably best to have a dedicated Internet link for voice traffic, which can often be more expensive than normal line rental. So, for residential and very small business, this is where you can save money on line rental…not necessarily so for larger businesses.
  • Local and long distance calls are generally cheaper and unlimited. This is well and good if you make many of these types of calls and the average call length is quite long. What most businesses fail to realise is that the majority of their costs are calls to mobile phones, and most VoIP providers do not have very good rates for these call types. A good analysis of you your call types is needed to ensure you choose the best option.
  • Suppliers of VoIP phone systems say you can save money on cabling costs by having one cabling infrastructure and/or sharing the same data connection between the phone and PC. In the old days you ran one type of cable for data and another for voice. These days phone systems generally use the same cable type and go back to the same patch panel…so, in reality, there is only one cabling infrastructure.
  • Sharing a data cable between PC and phone is not always a good idea. A phone is predicatable as to what it will send out on a data network…i.e. a 64K data stream of digitised voice (plus the UP addressing, etc.). A PC may sit there idle or be sending/receiving large amounts of data, or it may go haywire and start sending all sorts of rubbish out onto the network…hence it’s data usage is unpredictable.

If the network is being shared between voice and data then problems occurring with PCs can cause telephony problems as well (bad quality or loss of phone system). One PC having issues can bring down the entire phone system. Any reputable (and knowledgeable) VoIP supplier would put the Voice and data traffic on separate data networks.

What Is The Best Way To Implement VoIP?

There are 3 VoIP components to look at here:

  • VoIP Lines
  • VoIP main system
  • VoIP handsets

VoIP lines may save some money but this needs to be analysed carefully as discussed above. There is a good chance that you will better off using digital ISDN lines (see How to choose Telephone Lines page). Another suggestion would be to use traditional lines for certain call types (i.e. calls to mobiles) and also have some VoIP lines for other call types (i.e. long distance calls). Most phone systems have the ability to automatically select a particular line based on the number call.

1. VoIP Telephone Systems

There are 3 types of VoIP systems marketed out there in the Telephone System world (so be aware):

A traditional digital telephone system that has had VoIP functionality added to it so they can say they do VoIP (and a lot of times they do not do it very well). A full IP telephone system that has VoIP lines and VoIP handsets (and to connect anything else like standard lines you need additional boxes which leads to more points of failure). A VoIP Hybrid telephone system that can cater for VoIP, PSTN & ISDN lines and VoIP, digital & analogue handsets out of the one cabinet (= more functionality and less points of failure).

A VoIP Hybrid system such as the Alcatel OXO or Avaya IP Office can perform all the functions of a VoIP system yet it can have both digital handsets and/or VoIP handsets. These phone systems can also cater for PSTN lines, ISDN lines and VoIP lines without requirring additional external devices like most pure VoIP systems need (hence, less cost and less points of failure). This is by far the best option for a business. Even if you plan to send all calls out via VoIP line, it would be wise to have some PSTN or ISDN lines as backup, as they are far more stable than VoIP lines.

2. VoIP Handsets

VoIP handsets require data cabling even though the speed required for a voice call is a fraction of the network speed) and also require external power, whereas digital handsets are powered from the phone system and can work over data cable or speaker wire if they have to. So to move from traditional phone system to pure VoIP unit it is generally required that all cabling for the handsets is replaced with new data cable (which can be a huge expense).

It is the phone system and not the handset that performs all the advantages of VoIP as described above. On the Avaya IP Office for example, the VoIP handsets and the digital handsets look exactly the same and have the exact same functionality…

However the VoIP handset is more expensive. A good VoIP solution can be implemented without necessarily going VoIP all the way to the handset…there is no real advantage in doing this.


Do you think about the drivers motivating you before moving to VoIP.

  • Cheap Call rates and line rental – analyse this carefully, or get us to do this for you.
  • Unified Communication and other VoIP features – good idea but do you really need to go VoIP all the way to the handset? Remember, there is no added advantage to this just cost.
  • Open choice of handsets – some people like the fact that they can use any SIP handsets on an open type system. This is cool but you are now limited by SIP itself. A lot of systems have some cool features that are specific to the way they communicate to the main system. These are not neccassarily available with any SIP device.
  • Less cabling costs – yes you can share the data cable between PC and phone but sometimes the initial cost of additional cabling is better than the pain this can cause further down the track.

As mentioned, VoIP can and does work if designed well. We use it ourselves, but are very cautious as to where and how we implement it, as we do not want customers to have a bad experience due to bad decisions.