What Makes VoIP So Much Cheaper Than Traditional Phone Calls?

VoIP is now firmly established in business, going from strength to strength every year. All manner of VoIP deals exist for the individual consumer through to small or medium sized businesses and also the largest corporations. One key aspect of the popular rise of this mode of communication has been price.

Fundamentally, calls are far cheaper with VoIP than when using traditional phones due to a different cost base. Costs are shared with the computer network.

Circuit-switched calls associated with typical phone systems have ports at each of the originating and receiving switches that are tied up that are tied up for the calls duration. With VoIP virtual circuits exist that enable available network bandwidth to be more efficiently used. Both voice and data are efficiently integrated, great bandwidth consolidation results.

The equipment that enables the internet to function is taken advantage of by VoIP. VoIP protocols and hardware are typically off-the-shelf, developed by various vendors and interchangeable.

Scalability is far easier with VoIP since traditional phone networks have circuit switches that mean they are geographically limited, each service area requiring a switch. VoIP can involve soft switches installed at a regional level enabling numerous markets to use it, only limited quantities of local equipment being required.

Companies use VoIP so that call charges between their own offices are gotten rid of. This is achieved by the implementation of their own data networks for allowing inter-office calls. VoIP is also used for reducing the costs of calls made outside of the company by carrying them to the nearest network point before transferring them to the PTSN. An alternative to the PTSN therefore exists, and this can be continuously developed and scaled to fit the company's requirements.

Two networks are harder to manage than one. Additionally, exchanges with VoIP are centered around software, not hardware. Software is far easier to configure, alter and maintain. Substantial savings can be made, for example, through fewer required staff and admin costs, changing, adding or moving circuits for telephony heavily improved.

Service providers can also benefit hugely from using VoIP. Where traditional phone services use telephone switches, high specification PC servers run computer applications for VoIP, this allows smaller costs for the company delivering the service.

Albeit there are still certain areas to improve upon with VoIP, e.g. the requirement for good quality equipment and complicated user instructions, this technology looks set to stay and improve yet more in years to come.