VoIP Overview

What is VoIP

Voice over Internet Protocol (also called VoIP, IP Telephony, and Internet telephony) refers to technology that enables routing of voice conversations over the Internet or any other IP network. The voice data flows over a general-purpose packet-switched network, instead of the traditional dedicated, circuit-switched voice transmission lines.

A Bit about VoIP

Voice over Internet Protocol (VoIP) is the fastest grown IT sector. It is not really a new technology however it is only now emerging as a viable business capable alternative to the Plain Old Telephone System (POTS).

In some parts of the world savings for VoIP over POTS is up to 87%, however in Australia we have found that between 30% and 50% is much more likely. It should be noted that VoIP prices have dropped incredibly over the past year and so great savings can be expected as the market expands and the more carriers vide for the consumer dollar.

A large number of people are offering VoIP solutions and a number of large providers of Session Initiation Protocol (SIP) [the protocol used to start a voice call] providers are coming into the market. Unfortunately many of them are not experts with the technology and are rolling out "it should be right" networks. This has lead to some people getting a less than satisfactory experience with VoIP.

It should be noted that a trade off of 30% to 50% reduction in phone bills comes at the cost of a drop in call quality. VoIP is effected by the Internet and therefore a business quality VoIP solution should always have monitoring and a capacity to drop back to POTS, if necessary.

General Information on the Convoitec VoIP System

Over the past several months we have built and deployed a full VoIP solutions capable of being easily deployed into the SME marketplace. We have tested the technology and it is currently being used by our first major client who has 2 sites. The main one is in Brisbane and they have a small branch office in Victoria. The business does between 300 and 400 minutes of calls per day.

The business was paying approximately $4,500 for telephony over both branches per month. Current estimates will have the cost average under their new VoIP system at between $2,500 and $3,000 per month.

This is a per year saving to the SME of between 33% and 55% or $18,000 and $24,000! It should be noted that currently the average saving of a VoIP system over a POTS (plain old telephone system) is approximately 33% in Australia. It should also be noted that as more technology is deployed and more SIP (Session Initiation Protocol) account providers come into the market the savings over a POTS is expected to grow to 80%.

We currently have relationships with a number of the major Australian distributors of VoIP hardware and our technical understanding has allowed us to ensure that these relationships (although only formed over the last few months) are very strong. We therefore have a good foot-hold in the industry.

Our technology has extended to include GSM (Global System for Mobile Communications - cellular phone technology) to VoIP gateways. These gateways allow SME's to take advantage of capped GSM rates (like Vodaphones $149 for $1,200 of calls) which in turn lowers the significant cost of land-line to mobile communications.

Our technology also deploys many of the other advantages of a VoIP PBX (private branch exchange) system over a POTS. These include:

• Voice Mail for all users
• Dial Plans specifically developed for your businesses
• Ability to have an extension to your business PBX anywhere where an Internet connection can be made available. That is, the business owners home, a laptop with a wireless connection, a hotel room (anywhere in the world!)

Some other advantages of VoIP include zero cost calls for people connected via the same SIP Account Provider. This is a massive advantage to networked businesses (not only meaning Wide Area Networked businesses with branch offices but also businesses like franchises, businesses in trade groups etc). In the latter cases they are often making calls between each other and back to common central points.

There is a huge advantages for such groups not only to take up VoIP as on opportunity but also to embrace one common provider. We have the full end to end solution developed and waiting to deploy.

Some Interesting Articles

Australian survey confirms Internet telephony increases competitive pressure on incumbent carrier revenues

http://www.atug.com.au/article.cfm?newsid=344&newstype=2

October 2005

Sydney, 12 October 2005 - In August 2005, a joint pilot survey on Internet telephony, or Voice over Internet Protocol (VoIP), was conducted throughout Australia with members of the Australian Telecommunications Users Group (ATUG) and customers from engin, a leading Australian broadband telephone company. The survey included over 500 respondents, comprising VoIP users, non-users and home and business subscribers.

Key findings from the joint survey include:

(i)Customer satisfaction with VoIP service is driven by customer perceived value, specifically savings on telecoms spend.
(ii)The average saving of the respondents surveyed was 33% or $44.20 per month.
(iii)85% of VoIP users would recommend it to others.
(iv)85% of existing VoIP users are satisfied with VoIP call quality.
(v)There is a high probability that if you use VoIP at work you will use it at home.
(vi)The main inhibitors to increased VoIP penetration are lack of convenience, lack of information and an expectation of poor voice quality.
(vii)The survey indicated no clear link between tendency to use VoIP and telecoms spend, ISP provider, speed of internet, or VoIP service features.

These results are largely consistent with the Organisation for Economic Change and Development (OECD)’s Communications Outlook 2005 report, released in August 2005.

Commenting on the recent findings in the Australian survey Rosemary Sinclair, Managing Director of ATUG said: "The results suggest that the Australian VoIP market still has some way to go. By way of example, the OECD ranks Australia 7th and 8th out of 30 in terms of most expensive telecoms spend for business and residential subscribers. Yet average savings delivered by use of VoIP is at 33% compared with the OECD suggested average saving of 80%. There is also little evidence of VoIP making any inroads to savings on mobile calls costs in Australia".

"The results from our joint survey with ATUG suggest that there is a significant opportunity for VoIP carriers to attract more customers through an information and education campaign that demonstrates the high voice quality levels, ease of use, increased savings and convenience offered by VoIP and technology now available" added Ilkka Tales, CEO, engin.

Australian Businesses Move to VoIP, but Scream: No One-Size-Fits-All, Please!

Susana Vidal

http://www.idc.com.au/press/detail.asp?releaseid=184

NORTH SYDNEY, August 26th, 2005 - According to IDC's recent study "Australia VoIP Services and Equipment Forecast and Analysis 2005-2009", migration to VoIP is already underway for Australian businesses and will reach over $850 million by 2009. Despite equipment vendor wars for leadership in the market, there will be no one winning solution in the market in the future. Telecom carriers, VoIP service providers, ISPs, systems integrators and equipment vendors will have to offer a diversity of solutions that fits the financial and communications needs of diverse business sizes and industry verticals present in this market.

According to IDC’s telecommunications survey 2005, one out of seven companies in Australia have already deployed some form of enterprise VoIP system, and the self-implemented VoIP model is still the most popular. This year we have begun to see growth in the managed/hosted IP telephony models, with carrier managed CPE IP PBX (customer premises equipment internet protocol private branch exchange) growing to a penetration level of over 8% from less than 3% in 2004. The reason why companies are installing enterprise VoIP systems continues to be based on lowering operational and hardware costs, despite the push on advanced applications.

IDC provides a few recommendations to the companies that want to capitalize on this growing market:

Refine your target market - Companies that try to be everything for all businesses will have a harder time reaching their customers. Besides large telcos, other VoIP providers will need to choose a specific business size and/or industry vertical to target, to offer them specific bundled packages that fits their financial and communications requirements.

Partner with the one that has the customer base - Reaching the customer is the first challenge new VoIP providers face, but they may not need to spend millions of marketing dollars to reach them. In order to reach small and medium businesses, VoIP providers can create alliances with councils, associations, chambers of commerce, etc that already own the customer base, and market their products via these channels.

Educate your customer first - Lack of education of the benefits of VoIP and the potential security risks involved is still leaving some business on the edge. Help these companies by solving their questions via seminars, roadshows, etc, without the marketing pitch, and then offer your solutions.

Bundle your broadband service with VoIP - For SMBs, bundled communications services is a strong proposition that fits their budget, and simplifies their billing nightmares. By choosing managed VoIP services it will ease their IT resources requirements.

Offer additional value added services - VoIP deployments should not stop in phase 1 with only voice services, since additional value added services like video, presence and integration with company applications are the ones that will increase productivity, and at the same time provide the stickiness to the supplier of these services.

"In 2005 we will see the rise of managed/hosted IP telephony implementations, not only by telecom carriers but by systems integrators, broadband service providers and other providers. Also, enterprise VoIP equipment and services revenues are expected to grow this year over 70% and 73% respectively, and the growth will continue to be strong in 2006 and 2007," said Susana Vidal, IDC Senior Analyst for Telecommunications.