How VOIP works
By Mitchell Barker, CEO of WhichVoIP.co.za.
British author Arthur C Clarke famously said that any sufficiently advanced technology is indistinguishable from magic. For many, voice over Internet protocol (VOIP) falls into this magical category.
VOIP - also known as voice over IP, broadband phone or Internet phone service - is a technology that allows users to make phone calls without having a regular fixed analogue phone line or using a cellular phone service, since it happens over an Internet connection.
"Although the technology has been around for a while, and has been allowed in South Africa for a number of years already, many people still don't really understand how it works," says Mitchell Barker, CEO of WhichVoIP.co.za, a directory Web site containing a detailed list of reputable VOIP providers in South Africa. "If more people were to understand it, they would be able to utilise it to their own and their business' advantage. VOIP is having a huge impact, not just on local telecommunications, but globally too, with some predicting that it will eventually surpass fixed line to become the main means of voice communication."
These forecasts are backed up by statistics that recently appeared in a new report from Infonetics Research. Over the course of 2012, the international VOIP market saw significant growth, with increased spending on compatible hardware and services helping to drive revenues to over £41.2 billion, a year-on -year increase of 9%. By 2017, the report says, it is believed that the annual revenue of VOIP will be somewhere closer to £54 billion.
"VOIP has dramatically expanded the telecoms landscape in South Africa as well. Before, the market was monopolised by the country's major fixed-line operator, Telkom, and consumers had no choice but to adhere to its pricing. Then, in February 2005, the Independent Communications Authority of South Africa (ICASA), the country's communications regulatory body, opened the regulation," Barker says.
This allowed for new providers with network licences to inter-connect with other carrier networks and to exchange voice traffic and connect subscribers via the Internet - in other words: VOIP.
So what are the mechanisms behind VOIP and how does it work? "In traditional telephony, the phone company delivers services over a fixed line, or trunk, that connects the private branch exchange (PBX) to the public-switched telephone network (PSTN). This trunk carries the phone calls from your business to the public," Barker explains. "VOIP is a method by which analogue audio signals, such as those you hear when you speak on the phone, is converted into packets of digital data that can be transmitted via the Internet."
It is far easier to get a VOIP phone connection than to install an analogue phone line, since the infrastructure that is needed for VOIP is bundled with your current network architecture and Internet service, so there is no need to hire technicians for installation or to invest in expensive equipment.
"This is part of why VOIP is so cost-effective as well, because the cost of line rental now falls away," Barker says. "VOIP users in South Africa can reportedly save up to 35% on their phone bills. Because, apart from paying the subscription fee to your Internet service provider (ISP), your VOIP service will only require a small additional monthly fee. You can make VOIP calls even if the other party doesn't have VOIP, calling landlines and cellphones too."
Other benefits of VOIP include mobility - since your number stays the same even if you relocate - that the VOIP service can be tailored especially to your exact specifications, and that even those who are outside Telkom's fixed-line infrastructure can now have a phone service. "All you need is an Internet connection. The faster the better," Barker says. "And with the National Long Distance (NLD) consortium recently completing the first 700km phase of its fibre-optic Internet expansion in South Africa, which could boast up to 100 times faster than average Internet speeds, many more South Africans will be able to switch over to VOIP."