Guide to IP Telephony

What is IP?

IP is the communication language that enables a network of computers to ‘talk’ to each other so that we can send e-mails, share documents and other files. It is the underlying mechanism for the worldwide network of computers that make up the ‘internet’ and the language that browser software uses to access websites.

The use of IP is not just limited to communication equipment but is now common in multimedia communication i.e. video. IP is also used with telephone and telephone system to provide an efficient way of making phone calls across the internet. Known as Voice over IP (VoIP), this technology has been used for some time by public telephone operators to maximise the efficiency of their telecommunication networks.

VoIP is increasingly recognised, and is most commonly associated with the new wave of low-cost phone services via the public internet promoted for residential and home use.

Potential Use of IP

As a technology, VoIP has great potential in the business world far beyond reducing call charges.

The use of IP within a company’s private network rather than the public internet has an excellent case for return on investment. IP allows businesses to support their PC applications with the way that their telephone system operates, as both systems are interconnected on the same network.

Put simply, IP acts as the glue that binds together front and back-office applications with a communications server.

To avoid confusion, the use of IP to enable business and telephone applications is referred to as IP technology whereas VoIP is the underlying technology.

The introduction of VoIP and IP telephony applications has major implication for businesses, individuals and providers of telephony services and systems.

• IP enables a single network to handle all communication needs, voice, data and all types of multimedia services across IP networks
• IP telephony is not just for public voice, but an application to be used for in house business systems at and between company sites
• IP telephony is an unstoppable trend. BT has announced it will be rolling out its 21st Century Network Project from early 2006. This is a global solution that will carry voice, data and internet services on a single network.

IP & Cost Savings

The main driver for adopting an IP telephony solution is cost reduction and can be achieved in a number ways.

• Voice calls usually made over the public telephone network can be routed between company sites over IP networks for little or no cost.
• Businesses can use spare capacity on their existing office and inter-office computer networks to transport voice traffic alongside data.

After the initial investment has been made in an office network based on an IP infrastructure, additional capacity and cabling can be added at a low cost. This will provide excellent investment protection and capital savings.

• The cost of managing a converged communication system could reduce by up to 50% less than managing separate voice and data systems. It is easier to set up a new employee with a computer and phone if both devises connect to the same IP-based cabling system.
• Business who regularly make international call or who communication with mobiles, can save a significant amount of money by deploying IP. Business will not recognise significant call savings on their local and national telephone calls, because of the highly competitive nature of the UK market for network minutes.

With call to mobile phones counting for as much as 50% of al telephone costs in some companies, there is scope for using VoIP business. For example while travelling, you can use a laptop as a phone (with software called ‘softphone’) routing calls across the internet at a fraction of the cost of the public phone network from your hotel room.

5 Reasons to adopt IP Telephony

1. Reduce Call Costs
2. Increase IP applications such as unified communication, real time billing, click to dial, speech recognition and self initiated video conferencing
3. Simply and inexpensively add and remove users and rearrange services
4. Self managed communication networks from a single control point
5. Reduce business continuity risks in the event of distribution at any business site in the company

Source: Economist Intelligence Unit / AT&T