Cost-Saving Advantage of Packet-Switching with VoIP

Posted by Yeva Yesayan on Oct 9, 2015 10:32:04 AM

VoIP differs greatly from legacy telephony, and its advantages are more than evident. The basic principle of voice traffic travelling over IP networks is packet-switching. Not only does it enable voice to be routed via Internet at less cost, but this technology also allows voice to be used in multiple ways which add value to the business communication.

Packet switching technology has two cost-saving benefits. The most evident is transport costs which are reduced to zero. In this regard low cost VoIP can be compared with email. You don`t have to pay for using it, right? Sending or getting mails incurs no costs, we know it. Of course, we are getting a lot of spam, the volume of emails received every day creates a lot of challenges to productive work, but however, email is still one of the most essential business communication tool.

The same can be applied to telephony, and as voice data travels over the same no-cost IP-based network as emails, there is no wonder why Web-based services which are free to users have been so popular for years. By all means email is an efficient tool for messaging and handling information flows. But there is still one more essential feature which makes business communication more special. It`s real-time voice interaction which is the most preferable choice when you need to get in touch with someone.

This is the point where things are getting more complex with VoIP as voice is believed to have such a high value. If you were obliged to pay for using email, by all means you will be searching for other alternatives which are free. Until Skype and the likes came along, telephony was not free as voice has so much utility- and providers incurred high costs for providing these services. Anyhow, telephony is always worth making investments in. Companies need telephony to secure productive and effective functioning, and before to the recent increase of mobile phone technology, there wasn`t any adequate alternative to legacy phone. Nowadays, in spite of free VoIP options most companies prefer to pay for it to enjoy high voice quality and multiple advanced features.

The second essential cost-saving aspect of packet-switching is that it is less costly to establish and maintain as compared with the PSTN. A number of data networks can be used to rout VoIP traffic to any location. IP-based networks have major opportunities to carry VoIP traffic avoiding the PSTN. As IP networks do not require much investments as copper-based PSTN networks there are little obstacles to enter. Legacy-based carriers were maintaining a monopoly keeping prices artificially high prior to VoIP. Nowadays VoIP carriers have two key benefits over them. First are the cheap rates of transferring voice data over IP networks, and second is the low cost of infrastructure and network itself. Aside from that, the same packet can carry not only voice but any other type of data, enabling VoIP carriers to offer a plethora of services besides telephony.

No matter how you slice it, legacy phone networks are meant for voice communication and in this regard are not able to compete with multiple advanced capabilities of IP-based networks. For this purpose the incumbents consider it to be an albatross; and they are in the market for viable alternatives to quit the landline phone business.

Summing up all the above we can say that packet-switching is strongly associated with cost-saving advantages. This innovation is a key reason why VoIP became possible. This technology has not only cut the cost of telephony but also paved way to a broader world of interaction capabilities that adds ultimate value to business communication as compared with legacy services.

Topics: Blog