Cut Phone Costs - Is VoIP for You?

Using the computer to make overseas, STD and local phones calls uses a new technology called VoIP – it can drastically reduce your organisation’s phone bill – so how can Not for Profit’s get in on the act?

Global online technology experts CNET.com has put together a guide to VoIP in Australia looking at all the pro’s and con’s. The take-up by large corporations is growing in Australia but for small to medium businesses and even Not for Profits the take-up is slower.

CNET’s IT expert and journalist in Australia is Randolph Ramsay. In his detailed guide he outlines step by step how the system works.

Simply put, he says VoIP (or Voice over Internet Protocol) is telephony using your broadband Internet connection. A normal telephone service turns voices into electronic signals which are then converted into sound by your telephone.

VoIP, on the other hand, treats voice like any other piece of information being sent over the Internet — by digitising it into packets of data.

These packets usually have to be encoded into data and decoded back into sound by a computer or another stand-alone device (such as an analog telephone adaptor). And since you’re only charged by how much data is transferred regardless of distance travelled (local, interstate or overseas) as opposed to how long you’re on the line, it is significantly cheaper than normal voice calls.

In the past, technological constraints and slow Internet speeds made the voice quality on VoIP calls rather patchy, but Ramsay says the new systems and the prevalence of broadband has made it a much more attractive proposition.

The cost factor – reducing traditional phone costs by half and often making international calls for free – is said to be the most important driver in any company taking up the technology.

For example Telstra’s STD peak rate is 25 cents per minute compared with VoIP Provider Freshtel’s rate of 6.9 cents per minute. The system also offers portability and being electronic offers services like call logs, call screening, forwarding and multiple phone numbers.

But before you race off to get VoIP, Ramsay goes on to explain just what is needed to get the technology up and running.

And there are some weaknesses. Ramsay says that despite the ability to make and receive all of your phone calls through VoIP, in most cases you’ll still need to have a normal landline phone connected.

Since you need a broadband service for VoIP, and since the most widely available type of broadband in Australia is some form of DSL (which no telco in Australia can currently offer without an active phone line), you’ll still have an analog phone connection alongside your VoIP phone. At this stage, this also means two numbers — one for your normal line, and one that your VoIP provider gives you.

And here’s a statistic worth remembering. Every ten minutes of conversation via VoIP is the equivalent to 1MG of computer download. So it could be affected by your computers capacity or download restrictions.

In simplest terms Ramsay explains that there are two types of VoIP services available. The first is a ‘netphone’ option (often called a softphone), which is essentially a piece of software that turns your computer into a phone. The second needs a piece of hardware, such as an analog phone adaptor or an IP phone, and usually requires some sort of paid subscription to a service provider.

There’s a growing number of carriers in Australia providing VoIP services, with the majority selling analog telephone adaptor (ATA)-based solutions — that is, solutions that turn your normal phone into a VoIP one. Consumers can either go directly to the VoIP carrier and select a piece of hardware, or they can buy branded gear from major manufacturers such as Netgear, Netcomm, Linksys and others, which are tied to a particular VoIP service provider.

Prices for the ATAs vary depending on its capabilities, but should set you back anywhere between AU$100 to AU$250. You’ll then need to sign up to a service, which is where it becomes a little more complicated.

Ramsay says the most apt comparison is with mobile phone plans — while in most cases there’s no lock-in contracts, VoIP carriers take a leaf out of the mobile book by presenting consumers with a range of different plans with varying levels of benefits.

A plan with no monthly fee, for example, may only give you a bare bones service, while a AU$10 a month plan will get you your own dedicated VoIP phone number that people can call. More expensive plans usually bundle in some call minutes, as well as other value adds like cheaper call rates.

To view Ramsay’s complete guide as well as comparison prices from Australian VoIP providers go to: http://cnet.com.au/mobilephones/accessories/0,39025938,40056481,00.htm#1.