Within the last decade, businesses have become increasingly reliant on digital communication to operate efficiently and provide more value to their customers. As a result, VoIP has been leveraged by sophisticated businesses around the world to vastly improve their ability to communicate.
So, what exactly is VoIP?
VoIP, or Voice over Internet Protocol, is a form of modern technology that allows you to make calls over the internet rather than using your telecommunications provider. Put simply, you can make a phone call via the internet using any data-driven device, including laptops, tablets, phones and computers.
Since its introduction in the early 1970s, the VoIP market has grown exponentially, with the industry valued at $145.76 billion by 2024. VoIP is recognised as a valuable asset for a variety of reasons that we’ll explain below.
How VoIP Works
Voice over Internet Protocol works much like a translator, by converting your voice signals into digital data which is then sent through your internet connection. During this process, a program referred to as ‘codecs’ encodes and decodes all of the analogue signals that come from your voice into compressed digital packets, increasing the efficiency of transmission. These digital packets are then translated back into their analogue form once they reach their destination, allowing the person receiving the call to understand the message.
Although all this might seem complicated, this process of translating data occurs all the time in our day-to-day lives without us ever noticing it.
Think of when you send an email: the message you send is translated into code, allowing it to be transported through the internet. It is then decoded into its original version, making the message comprehensible to the person receiving it – VoIP is no different.
How is VoIP different from PBX and PSTN?
Time for some more acronyms: PBX stands for private branch exchange, a phone system that’s been used for decades by businesses for internal and external communication. Its primary strength is its ability to switch phone calls between employees on local lines while allowing all users to share a certain number of external phone lines.
Meanwhile, a public switched telephone line (PSTN), sometimes simply referred to as a ‘telephone line’, is the most commonly used method for phone conversations. Unlike PBX, it operates by using just one line, for one conversation, using one phone number. It’s great for calling family and friends, but this limitation makes the PSTN model an impractical option for businesses with several staff members looking to communicate effectively.
PBX and PSTN have a number of similarities in the way that they’re set up – the main one being that they both operate using phone lines. The key difference is that PBX uses multiple landlines to form local networks, whereas PSTN can only use one.
A VoIP system, on the other hand, is a digitised method of communication that uses the internet to make calls.
What system should I use then?
While each phone system has its pros and cons, VoIP is without a doubt the superior communication technology of most businesses. That’s because it’s cheaper, more efficient and more flexible than systems relying on traditional phone lines.
The winning formula for any successful business is to maximise efficiency and minimise costs. VoIP plays an important role in achieving these objectives by providing a wide range of benefits – let’s have a look at these more closely.
The Advantages of VoIP
- It’s cost-effective. Arguably VoIP’s greatest asset is that it is significantly cheaper than a landline, especially for international calls. Some software, such as FaceTime, can be used completely free of charge.
- Voice quality. Assuming you have a strong internet connection with good bandwidth, the sound quality of VoIP will be at least as good as, if not better, than a traditional phone connection.
- Increased accessibility. A cloud-based VoIP service allows you to make calls from anywhere in the world as long as you have the right credentials to access your account.
- Greater flexibility. When registering for VoIP services, you are assigned a special VoIP number, known as a virtual number. You can then use this number regardless of your location.
- Highly reliable. If, for whatever reason, a VoIP office phone shuts down due to network issues, calls can be forwarded to mobile phones and other devices.
- Easy to integrate with other business systems. Organisations are constantly integrating new technologies to maximise operational efficiency. A VoIP system is easy to install and can be seamlessly integrated with a variety of different business applications without having to make any costly adjustments to the existing IT infrastructure.
The Disadvantages of VoIP
- Strong internet connection is essential. The quality of your VoIP call entirely depends on the quality of your internet connection.
- Latency. A low bandwidth will disrupt the translation of digital packets, causing some calls to lag, delay, or even cut out completely.
- Power outages. All internet connections rely on a power source. This dependence on power can be frustrating for VoIP users in areas that experience frequent power shortages.
Businesses that choose to use VoIP have a much greater chance of gaining an advantage over competitors due to the simple fact of having a far more powerful communication system. The traditional landline is an outdated model for any firm that’s serious about achieving growth.
VoIP offers businesses the opportunity to be more agile, efficient, and flexible. To begin with, firms are able to operate globally due to the minimal costs associated with making international calls. That alone is a game-changer. VoIP allows organisations to make important global connections, a vital step in achieving their aspirations.
Unlike traditional landlines, calls aren’t restricted to a single location. VoIP users have the freedom to communicate via a laptop, phone, tablet, or computer, at any location that has an internet connection or 4G. Although VoIP is totally reliant on an internet connection and bandwidth strength, it’s crystal clear that the pros vastly outweigh the cons. Businesses who don’t utilise this effective form of communication will miss out on the opportunity to reach their full potential and risk falling behind their competitors.