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Voice Over IP Explained

VoIP, or Voice Over Internet Protocol, allows you to make telephone calls over your Internet. The technology has been around for almost as long as the Internet itself, but the arrival of consumer friendly products has made it accessible to homes and small business.

What is Voice Over IP?

VoIP converts the sound of a telephone call into data packets. Just as a web site does with written text or YouTube does with video clips.

Once it's done that, your telephone telephone call can be sent across the Internet just like a web site or email.

Is VoIP cheaper?

Generally Voice over IP is cheaper than the Plain Old Telephone System (POTS) because VoIP providers don't need to invest in telephone exchanges, undersea cables and satellites. It just requires a connection to the Internet.

Just how much cheaper VoIP is depends on how you use the service. It can be free or it can only be marginally cheaper than the existing phone systems. Generally most users get substantial savings on their phone bills.

How do I get VoIP?

First you'll need an Internet connection. Next, you'll need to subscribe to a Voice over IP service.

Skype is a free service as long as you talk to other Skype users. If you want to use VoIP to talk to other telephone users you'll have to pay for a service.

If you choose to go with a service like Skype, you'll need to download some software to your computer. You then use your computer as a telephone so you'll need to have a microphone and speaker or a headset.

Other services provide a box, known as a terminator, to connect you to their service. These plug into your Internet connection.

As part of your service, you'll get a user name and usually a phone number. You can receive calls on these names and numbers.

Can I only talk to other VoIP users?

No, you can use a Voice over IP service just as you would a normal telephone. However you'll find calls are free between users of the same services.

Do I need a computer?

No, just an Internet connection. Most VoIP providers will supply a box that will connect your normal phones to the Intenet.

Is it suitable for businesses?

The first adopters of VoIP were big businesses with many branches around the world. By switching their phone calls across the Internet they slashed their telephone bills enormously.

Another advantage with VoIP for business is the flexibility it gives an office's communications. You can switch calls, set up conference calls and integrate messages into your email and messaging systems.

All of these benefits are just as valid for small business as big business.

What are its downsides?

There are some drawbacks and traps with a VoIP service that you need to be aware of. As a consequence, it's not ideal for everyone.

A decent Internet connection

By definition VoIP requires an Internet connection. If you have no connection, then you have no telephone. You need to have a good Internet connection if you want a decent VoIP experience.

A caller to one of our ABC spots on this issue was a farmer using satellite Internet. VoIP is not suited to slow connections or services that can have a long lag time like satellite.

Increased Internet bills

VoIP involves sending data across the Internet. This means when you're on the phone usage is counted towards your Internet plan.

If you have a cheap Internet plan with a low allowance, VoIP many increase your Internet bills which might eliminate the costs savings on telephone bills.

Call quality

Sometimes the call quality is not the best. This can be due to overloading on the VoIP provider's system and, more often, due to issues with your Internet connection.


Internet providers though isn't as reliable as the older telephone networks so they do have more frequent outages.

Also, when the power fails, so too does your Internet connection so it's worthwhile having a backup phone connection. This is one reason why we don't recommend going fully over to naked DSL.

No location information

A serious downside with VoIP is that emergency services can't track your location if you call 000, 112 or 106 numbers. This is another reason for retaining a landline connection.

Voice Over IP is a great way to reduce phone bills and keep in touch with friends and relatives. If you have business or relatives interstate or overseas you can save a bundle by going with ADSL.

We'd encourage all users with a broadband connection experiment to experiment with it. It can save you, your family and friends a bundle.



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