Voice over IP (VoIP) is the new technology in telephony systems, offering businesses an opportunity to modernize their old landline networks. In 2015, VoIP systems carried 156 petabytes of data and, while the switch to the new technology has been slow, most businesses are aware of VoIP or already have taken the plunge and shifted to a VoIP network.
Before diving into the history of VoIP, let’s define some terms.
VoIP is a form of telephony, which is the broad term used to describe telecommunication systems. VoIP is a new protocol in the world of telephony. Internet protocol (IP), as we know it, is the transferring of data via the internet, while Voice over Internet Protocol (VoIP) is voice data sent over the internet, or, in laymen’s terms, voice over an internet line. This differs from the traditional landline, in which data is transferred in digital format rather than in analog format through a copper wire.
Landlines have been around since their inception in 1876, with limited change to the technological parameters since then. The solid infrastructure of landlines and limited options available, both in terms of technological upgrades and the service itself, renders the platform more expensive than VoIP.
The typical arrangement for IP voice transfer is called packetization, and the transfer of these digital packets across the internet is fast and efficient. As a result, VoIP has one main advantage: it’s cheap. The packets choose the most efficient path to the destination, utilizing the least amount of network resources and making the most of the interoperability of the internet. VoIP uses current internet lines that connect with internet cables spanning the world, and this helps keep costs low.
Landlines, on the other hand, use a primitive but effective technology that has remained unchanged since the invention of TDM systems. However, little or no call drop-outs and a monopoly on services by traditional telephony carriers make landlines a more expensive option over VoIP.
In the beginning, VoIP experienced a range of teething problems that have since been addressed through upgrades and improvements. For example, not being able to use internet and phone simultaneously limited the usefulness of VoIP for business and personal use. Even the introduction of a switch to shift from internet to landline was still cause for frustration among users. The most common way subscribers would resolve this was by adding a second telephone line, but things changed drastically when dial-up was replaced with broadband.
What did the advent of broadband mean for VoIP users? Broadband offered much faster speeds and the ability to use internet and phone simultaneously. With over 200 million broadband subscribers worldwide by 2005, and with an immediate increase in call quality and reliability, VoIP services instantly flooded the market. The expansion of VoIP use due to growing competition, affordable technology due to internet interoperability, easier access to internet cabling and the availability of fast internet triggered a series of events that shaped the history of VoIP.
Once VoIP was utilized on broadband networks as the voice carrier, data features such as unlimited domestic calls, voicemail, web conferencing and a variety of pricing options became part of the VoIP offerings. Applications such as Skype, founded in 2003 by Vonage CEO Jeffrey A. Citron, became the first VoIP service platform to offer free internet calls. Viber, a VoIP phone application initially developed for iPhone, was launched in December 2010, in direct competition with Skype.
Experts touted at the time that 31.4 million US households would use VoIP as either their main or only home phone line by 2012, leaving landline operators with 26% of the home phone market. Since then, the VoIP household and business market share has continued to increase, with a steady annual growth rate of 15.3%. This growth is expected to continue.
When it comes to choosing the right service for your business, it makes sense to opt for a VoIP network when you already have the internet infrastructure available in your area, as this reduces your setup costs. Better still, if you have no telephony infrastructure, you might as well go with VoIP, which is set to dominate the future market.
Another advantage of VoIP is that vendors have a range of price points that help with cost efficiency, and having a variety of options always helps in choosing a good deal. And now, with the ever-increasing use of mobile devices, VoIP services offer a range of features for smartphones including conference calls, video calls and free SMS.
Thanks to the growing demand for VoIP services, mobile calls as well as home and business calls will become cheaper than ever. Both business and home usage will continue to skyrocket, affecting the way we communicate in the future. As VoIP technology improves, calls will become more reliable; and with ongoing rapid changes in the industry, VoIP will eventually replace landlines.