Telephony pt.2 – VoIP

In telephony pt.1 I talked about the reasons why companies might consider installing their own PBX (Private Branch eXchange). Truth be told, this was typically a decision that was easily made when a company reached a particular size (where the cost of having one external line per internal phone was prohibitive). And usually a company would start with a pretty small, simple and, above all, cheap system that could support maybe 3 or 4 external lines and 8-10 internal extensions. For a budget of £1,000 to £2,000 you could be up and running, and if you chose wisely you could have some expansion capability too. For some companies this is still an easy and right decision to make.

However, the world of telephony is changing. The largest provider in the UK, BT, is committed to replacing it’s aging switched network with an IP-based setup. It has to, the competition is hotting up and BT is no longer allowed to restrict access to its exchanges in order to reinforce their near-monopoly. For the consumer of telephony services, this effectively means any phone point will have the potential to instantly become an internet-access point – no more waiting weeks or months for BT to DSL-enable your line.

The net effect of all this progress on your telephony options is that VoIP becomes the norm rather than an attractive alternative to PSTN. In fact, whilst PSTN will probably remain around for ages, it will effectively be a virtual system sitting on top of the IP network. In time all analogue equipment (phones, modems, PBX’s) will become obsolete. So it would seem sensible, at the very least, to keep an eye on VoIP and the potential cost savings it could offer you.

What are those potential cost savings? VoIP can usually undercut the rates you are receiving for national calls, although it’s very possible that, if you are very good at negotiating with BT or have an agreement with a third party that offers Least Cost Routing services, the saving is minimal. Where VoIP tends to shine, however, is in two particular areas. Firstly, if you have multiple offices and route calls between them over the PSTN, then utilising your internal IP network for those calls is a much more efficient and cost-effective option. Secondly, if you make a significant number of international calls then VoIP will almost certainly offer you considerable savings, because VoIP calls only break out from the internet at a point close to the destination, so you should only ever pay local call rates. Obviously you need to do the maths, but if either of these situations apply to you then it’s time well spent.

So what are your VoIP options? Effectively you have two:

1. Many ISP’s offer hosted VoIP services (sometimes referred to as IP Centrex). For smaller businesses these can be a good route into VoIP as you done incur the cost of installing a new PBX (or adding VoIP capabilities to your existing PBX). The charging model tends to be pretty simple, you pay on a fixed charge per extension in addition to the cost of the calls you make. There are downsides, though. You will probably need to replace all your existing handsets; you will be placing your trust in the line(s) between you and your ISP (a single point of failure); even internal calls will be routed via your ISP, thus tying up bandwidth; and you pay for all extensions regardless of how much or little they are used. You can pay a bit extra for some hardware that removes the need to route internal calls via your ISP.
2. The other option is to host your own PBX. This usually tends to have an higher initial cost, but you don’t have to carry on paying ‘rent’ for the use of your phones. It also affords the opportunity to mitigate the risk of downtime by utilising multiple ISP’s. After all, the general expectation of phones is that they work 100% of the time. If you using a DSL solution for internet access, as many small businesses do, there are usually no guarantees or SLA’s offered by ISP’s. If the line goes down then that’s hard luck! The downside of a hosted PBX solution is mainly the initial cost. There is the cost of the PBX itself, the cost of IP phones, the cost of improved internet access if needed, and the softer costs of training staff in the new functionality. There will be an ongoing need to administer and support the PBX, although being an IT system it may be more feasible for your internal IT staff to do this.  You may also wish to introduce or improve your CTI (Computer Telephony Integration) capabilities.

Personally, I think having your own PBX is a preferable option, although using a hosted system may be a good way of ‘dipping your toes’ in the water. After all, once you’ve purchased IP phones then they can be used whether the PBX is local or not. It is certainly worth taking case over evaluating IP phones, though, as there appears to be great variation in quality and interaction with different PBX’s.

For an internal PBX, you can spend a lot of money on a system from one of the market leaders. I know of one 100-person company that was quoted in the region of £140K for a system, and that kind of cost is difficult to justify in terms of Return On Investment. However, there are alternatives, one of which is an open-source PBX called Asterisk, which will be the subject of part 3 of this series of articles. Don’t go away!