A VoIP solution to fit every budget

In the past five years, VoIP has become easier to implement and use by leaps and bounds—and continues to become more and more accessible. Deb Shinder discusses the latest available options for VoIP solutions, regardless of budget.

The Voice over IP (VoIP) landscape has exploded in the last five years. In its early implementation, Internet-based telephony was a hassle to implement, inconvenient to use, and far less reliable than Public Switched Telephone Network (PSTN) phone service.

Today, our cup runneth over with VoIP services, with pricing and features packages appropriate for everyone from individual/home users to small/medium businesses to the enterprise. VoIP lines can connect seamlessly to PSTN lines and wireless numbers; to the end user, making a VoIP call is no different from placing a call on a cell phone or landline.

VoIP advantages

Early adopters of VoIP were motivated primarily by cost; depending on their phone usage and long distance habits, they could save tremendously on phone bills because:

  • Most VoIP plans don't charge extra for domestic long distance (and some services offer free international calls to certain countries, as well).
  • VoIP services often include, at no extra charge, features for which the traditional telephone companies impose extra fees, such as caller ID, call forwarding, three-way calling, and voicemail.
  • VoIP has not been subject to all of the taxes and government-imposed fees that make up a large portion of the typical phone bill.
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    The big tradeoff in the early days was a lower quality in voice transmission and occasional dropped calls—pretty much the same disadvantages that plagued cellular phone service in its early days.

    However, as VoIP matured, transmission quality and reliability improved to the point where they're now close to that of PSTN. VoIP users are also drawn by other advantages of IP-based voice services, including:

  • Ability to have VoIP phone numbers in the area code of your choosing, regardless of where you're physically located. In effect, this gives you a low-cost way to maintain a virtual "local" presence in cities in which you do business so that customers there can call you without long distance charges, at much lower cost than alternatives such as an 800 number.
  • You can take it with you. With VoIP service, it's possible to make and receive local calls no matter where you're physically located, as long as you have an Internet connection. When you travel, you can take your VoIP equipment along and persons in your original calling area can get you at your local number without even knowing you're gone (much like a cell phone, but without airtime charges).
  • Many VoIP services offer free voicemail services such as e-mail notification when you receive a call (along with a .WAV file of your voicemail messages sent to your e-mail address) that are either not available or cost extra with traditional telephone service packages.
  • VoIP disadvantages

    VoIP technology still has a few disadvantages when compared with traditional phone service. Most notable is the inability to make phone calls during an electrical outage or when the Internet connection is down for any reason. In addition, some services that depend on phone lines, such as monitored alarm services, may require a landline, although there are now some alarm companies that offer service that works over a VoIP line.

    Businesses that must rely on their phone service should take steps to ensure that their disaster recovery/business continuity plans cover their VoIP service. Measures might include maintaining some PSTN lines for emergency use, backup generators, and/or redundant Internet connections with failover capability.

    Finally, VoIP services are subject to the same security concerns as other Internet traffic.

    Selecting VoIP services

    Small businesses may be able to save a lot of money by using VoIP services primarily aimed at consumers, such as Vonage or Lingo. These and other consumer-level services offer small business plans with online account management and may include a separate fax line. A good solution for a small or home-based business that only has two to five employees and needs only a couple of phone lines is to order two VoIP boxes and plug both into a two-line base station system that supports multiple two-line handsets. Each worker can then use either line.

    Larger businesses may need features that consumer level VoIP providers don't offer, such as the ability to transfer calls, put calls on hold, or create conference calls among more than three parties—although in some cases the telephone equipment you choose can allow these activities, even if the provider doesn't offer them. Providers for the SMB market (10 to 500 users) include phone companies such as SBC/AT&T, Speakeasy, and Qwest. Some of these companies offer packages for 10-20 lines at prices ranging from under $200 to over $1,000 per month, depending on such differences as:

  • Feature sets (things such as conference calling, music on hold, call queuing, scheduling and remote office features, fax support, etc.)
  • Whether hosted or on-premises PBX is supported
  • Whether an SLA (Service Level Agreement) is offered
  • Businesses with a large number of users will need IP Private Branch Exchange (PBX) systems to switch calls between internal lines. IP PBX systems are typically software packages that run on PBX servers. The systems also can be bought as turn-key appliances. IP PBX systems are made by Cisco, Nortel, Alcatel, Siemens, and other networking and telecommunications vendors.

    Many of the same phone companies that offer SMB solutions, such as AT&T, can also scale up to the enterprise level. Others, such as Covad, focus primarily on larger businesses.

    IP considerations

    Consumer-level VoIP services will work with broadband connections such as cable or DSL. However, consumer-grade cable and ADSL (Asymmetric Digital Subscriber Line) services often have the upstream connection throttled to as low as 128-256Kbps, even though downstream speeds are 1Mbps or more. For business quality calls, you may need a connection with faster upstream bandwidth, such as a T1 line, a VerizonFiOS (fiber optic) connection, or a business-grade cable or SDSL service.

    For best reliability, use an Internet connection that provides an SLA that guarantees minimum bandwidth and covers other factors, such as packet loss, which affect voice quality.


    Regardless of the size of your company, VoIP is now a viable option to traditional phone service, and may allow you to get more features and a wider scope of calling at a lower cost. In future editions of this column, we'll be looking more closely at VoIP technologies and equipment, new developments and trends in VoIP, and what it all means for your business.

    About Deb Shinder

    Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...

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