If you’ve heard of VoIP, but do not have a firm understanding of how the technology works, the following primer will get you up to speed on the fundamentals. VoIP stands for Voice over Internet Protocol, and describes the method of taking analog audio signals (what you hear when you talk on the phone) and converting them to digital data (packets), that can be transmitted over the public internet, or over a private network managed by a VOIP service provider.

What does this mean to a business owner? VoIP can leverage a standard Internet connection (Cable, DSL, T1, etc)  to place inexpensive, sometimes free phone calls. By utilizing VOIP, you are bypassing the traditional phone company, and thereby, the fees associated with transporting calls over their switched network.  This legacy network, which includes the poles and wires which run along the side of most streets and highways, is known as the PSTN (Public Switched Telephone Network).

Contrary to popular belief, VOIP is not really a new technology.  VOIP has been around for more than 10 years, but has only recently made its way into the public consciousness.

Many users of VOIP in a residential setting, using managed services provided by companies such as Vonage, iConnectHere and Packet8, use a hardware device called an ATA to connect a standard analog phone to the Internet for use with VOIP.  The ATA converts the analog signal to digital data so it can be transported over the internet.

Many VOIP users in a business setting use specialized IP Phones and an IP enabled PBX (Public Branch Exchange) system.  IP Phones have an Ethernet (RJ45) connection onboard, and are connected to the business LAN (Local Area Network).  The IP PBX is a digital phone system, which is also connected to the LAN, as well as to the Internet so that calls may be routed over the Internet.

VoIP is a powerful and disruptive technology, with the potential to transform the way we communicate in both business and personal settings.  You may have seen television ads from companies like Vonage, a fast growing provider of residential and business VOIP service.  Traditional carriers like AT&T, Verizon and SBC are utilizing VOIP technologies in their networks.  Many carriers now route calls through a circuit switch and into an IP gateway (where the analog signals are converted to digital “packets�), allowing them to utilize their IP based networks for backhaul, which is much less expensive and resource intensive. Once these calls reach their destinations, they go through a local gateway where the call packets are decompressed, reassembled and routed to a local circuit switch.

Over the next few years, more and more of the traditional, legacy circuit-switched telephone network will be replaced by packet switched infrastructure.   More and more businesses are installing VoIP systems, and VOIP technology will continue to grow as it slowly replaces circuit-switched calling altogether.

This entry was posted on Monday, January 15th, 2007 at 5:53 pm and is filed under News & Events. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.