Voice over Internet Protocol (VoIP): Is it right for my small business?
A White Paper from BellSouth
Voice over Internet Protocol, or (VoIP), is a fast-growing alternative to traditional telephone service. It is a digital
technology that allows customers to make telephone calls using a broadband Internet connection such as cable-
modem or DSL instead of a regular (analog) phone line.
How does VoIP work?
VoIP converts analog phone signals into digital data packets and sends them over the same broadband
connection used for e-mails or web browsing. The packets are decoded back into voice when the recipient
answers the call.
To achieve the analog to digital signal conversion, customers either need special IP phones or an analog
telephone adapter. A network device – typically a router – is also required for the broadband line. The recipient
does not need special equipment to receive a VoIP call.
Telephone Wiring at the Office
Router Wall Jack
The Future of VoIP
VoIP has been touted as a “revolution” in the telecommunications industry. Tech Trends predicts there will be
more than 19 million VoiP access lines by 2007. (1) By combining voice and data over the same network, the
service may help businesses reduce long-distance charges and enhance operating efficiency. With voice and
data converged on one network, VoIP can also offer new features and benefits such as:
• Online feature management – change feature preferences online, while away from phone
• Online call logs – keep track of all incoming, outgoing and received calls
• Call filtering – create special rules for certain incoming calls, including forwarding to voice mail or
• User profiles – set up unique user profiles for individual lines or the same line allowing various call
filtering rules and other feature preferences
• Additional phone numbers – assign additional phone numbers to one phone line
• Virtual phone numbers – assign out of area code phone numbers to one phone line
• Mobility – users can take their ATAs with them, and plug into any broadband connection. Once set
up, can use phone line as if it were in the office
• Cheaper Long Distance – in the VoIP space, a minute is a minute. No more unique billing for local
vs. long distance
Is VoIP right for my small business?
While VoIP can provide additional features and benefits to businesses, it is a new technology with some
limitations. All calls -- local, interstate and intrastate -- will travel over the Internet as packets of data. As a result
the technology will deliver a dial tone, but the quality and reliability will be more like cellular service. Sometimes
the transmission may be garbled, or calls may be dropped.
According to a Consumer Reports survey, almost one-third of VoIP users had at least one dropped call or
difficulty in making or receiving calls within a week of the study. Some also had occasional problems hearing
callers or being heard. (2)
An additional consideration should be 911 service availability. Although the U.S government required all VoIP
providers have fully functioning 911 service by September 2005, many companies have requested an extension.
If you purchase VoIP, make sure you know if your service will work in emergency situations.
If you have an alarm system in your place of business, VoIP may also interfere with its monitoring abilities. Most
monitoring systems use technology that requires a land line to communicate from the customer premise to the
alarm company. In addition, if it does work over VoIP and the power goes down, so will the security system.
Be a smart shopper…
If you decide that VoIP is right for your small business, it pays to be a smart shopper. Look carefully at each
provider’s offering and determine exactly what is included in packages and bundles. Most important, before
making a purchase decision, evaluate the total cost of ownership, and determine the impact on your customer
service if quality and reliability are compromised.
What are some advantages of VoIP? What are some limitations?
• The service can lower costs by • Phone service will be lost during a power
bypassing long-distance and other outage or if DSL Broadband Internet
charges access is interrupted
• Customers may increase business • Broadband users may experience
efficiency through the use of new dropped calls or voice quality not on par
features and applications on a with their current service
• 911 service not always available in all
• Many security companies require a
traditional phone line for the security
system service to work
By converging voice and data over one network, VoIP can help some small businesses lower their operating
costs, increase productivity and benefit from new applications. The decision to purchase VoIP should be weighed
carefully against the need for quality and reliability found with traditional telephone lines.
For additional information, contact your BellSouth account representative.
April 10, 2006
1 VoIP Begins to Take Off, TIA’s TechTrends, May 2004.
2 “Best Phone & Plan For You.” Consumer Reports, January 2006; 29.