Bandwidth a Key Component of VoIP Services

As new technologies floods the market, businesses across the country are turning to Voice over Internet Protocol to expand telecommunication networks, reported bizjournals.com.

But with every new product introduction, glitches are commonplace, and business owners have to be aware of some of the technology's shortcomings.

"VoIP does not have the universal quality of a traditional phone line," said Tim Searcy, chief executive of the American TeleServices Association. "And you are moving to a heavily software based solution, which means more programmers are involved."

The Indianapolis organization represents the $500 billion call center industry and advocates members' interests on Capitol Hill and in statehouses nationwide, providing professional education opportunities and acting as the sector's information clearinghouse.

Raymond Shaw, president of the Association of TeleServices International, said companies need to be cognizant of bandwidth availability.

If there isn't a dedicated connection between a business and its VoIP provider, he said transmission delays can occur, causing bad reception or jumbled communication.

VoIP services convert voice into a digital signal that travels over the Internet. If a user is calling a regular phone number, the signal is converted to a regular telephone signal before it reaches its destination. VoIP can allow a user to make a call directly from a computer, a special VoIP phone, or a traditional phone connected to a special adapter. In addition, wireless "hot spots" in locations such as airports, parks and cafes allow users to connect to the Internet and may enable VoIP services wirelessly.

Despite some technical glitches, VoIP subscriptions have skyrocketed in the last year. According to the Washington, D.C. research firm TeleGeography, Internet-based telephone services grew 21 percent in the second quarter to 6.9 million users. Overall, the VoIP market saw a 153 percent increase in subscriptions compared to mid-2005, while industry revenues for the second quarter increased 173 percent to $607 million compared to the $221 million in sales a year ago.

"VoIP is rapidly spreading among multiple enterprise solutions which have multiple locations around the country and the world," said Matthew D'Uva, president of the Society of Consumer Affairs Professionals in Business. The Alexandria, Va.-based organization is dedicated to improving and advancing the marketplace for consumers within the corporate structure. SOCAP members include consumer affairs and customer care professionals from more than 1500 different companies -- many of which are listed in Fortune/Forbes 1000.

"Our members are looking for ways to improve and enhance communication with their customers from all angles, and VoIP is one channel to do that," D'Uva said.

While installation and service fees vary by state and provider, VoIP services typically costs less than traditional phone services.

VoIP systems can cost anywhere from no charge up to $200 per month but will generally cost $10 to $50 per month depending on the type of services ordered. VoIP can be free when the service routes a from PC to PC, but the price increases based on the number of local and long distance calls made and the features a company implements.

Today, most business VoIP services can provide a firm with a variety of features, ranging from $20 to $200. Business VoIP provider commonly include a T-1 Internet connection and a guarantee for quality of service which increases the costs.

According to the latest research on ConsumerCompare.org, Virginia-based SunRocket Inc. was given the highest rating of six stars. To get the $16.58 monthly rate for unlimited minutes, businesses must prepay for the entire year, which is $199, but can cancel any time and get a refund for unused months.

Since SunRocket includes all taxes and surcharges, a firm makes the $199 payment up front and then is able to make unlimited local and long distance calls for the next 12 months.

Most other companies charge taxes and surcharges on top of their listed rates. SunRocket also throws in $3 free international calling per month, a free extra phone number and two free directory assistance calls per month with their unlimited plans. The company also is waiving their $39.95 equipment fee when a firm signs up for the $199 annual plan.

By comparison, ITP, Verizon, Lingo, ViaTalk and Packet8 received three stars, which were the lowest rankings. Vonage, Voip.com and VoIP Your Life fell in the middle of the pack. Cox, Comcast, Cablevision, Qwest, and Time Warner are also rolling out VoIP offerings.

Perhaps the greatest benefit of VoIP systems is the flexibility of the Internet versus regular phone lines.

"This flexibility with VoIP fosters greater organizational efficiency, higher productivity gains and increased revenue potential," D'Uva said, but cautioned that VoIP is a relatively new and expanding technology, "so issues of quality, security and even network power still need be addressed as VOIP continues to evolve."