One of the main reasons for the explosive growth in VoIP service is the available cost savings. This cost savings comes from a number of advantages that VoIP has over traditional phone service. In this article, we will explore some of these cost-saving advantages.
The most obvious and most talked about advantage of VoIP service is the fact that calls can be sent over the Internet much more cheaply than they can be sent over the traditional telephone networks. The main reason for this is the fact that the network already exists – VoIP is simply taking advantage of a huge network that is already available – the Internet. Another reason for this advantage is the way that a call travels over the Internet as compared to the traditional telephone networks.
When you place an end-to-end call that uses the regular PSTN, an actual connection has to be maintained between your phone and the phone of the receiving party. This connection is dedicated to that call, and cannot be used for anything else while the call is still in progress. This process is called circuit switching – your call is routed through a series of switches in order to make a dedicated connection from your phone to the receiving phone. This dedicated connection costs money – and it has to be maintained.
VoIP, on the other hand, does not require this type of dedicated connection. VoIP provides a way of sending analog voice signals in digital form using packets. These packets can be split up, routed the fastest way, and put back together at the other end. This process is known as packet-switching, and is made possible by the “protocol” portion of VoIP. This protocol provides a way to disassemble and reassemble these packets fast enough to carry the voice signal without interruption. This allows more efficient use of the available bandwidth, resulting in lower costs.
Another reason for the lower cost of VoIP when compared to the traditional phone service is the fact that VoIP service providers are not classified by government regulating agencies as phone companies. This means that they and their service are not subject to the special fees and taxes that apply to most traditional phone companies. They can pass this savings along to you in a couple of ways. First, they are not required to charge you for any special fees or taxes. Secondly, their cost of doing business is lower, and they can pass this along to you in the form of a lower basic rate.
Other cost savings are possible when using VoIP because of its rich feature set. One feature that adds convenience as well as savings is a virtual phone number. Most VoIP service providers allow you to choose an area code anywhere they provide service, regardless of where you are physically located. If you normally place a lot of calls to a particular long-distance area code, this feature can be used to save almost the entire cost of those calls. By choosing the area code for your VoIP number to be a local call for that area, you will not be charged any long-distance fees when calling that area code – it is for all intents and purposes a local call. By the same token, callers who call you from that area code will not be charged for a long-distance call, either.
As you can see, the reasons for staying with your traditional phone service are disappearing rapidly. As VoIP technology continues to evolve, you can expect more cost saving features to become available.
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