VoIP:

- Copyright: Dr Peter EH Smee, circle-of-excellence.com, 2006

VoIP: Low Cost Telephone Calls

Using A Broadband Internet Connection

Author: Dr Peter EH Smee Date: Wednesday, 28 June 2006 Home: circle-of-excellence.com

Synopsis:

VoIP (Voice Over Internet Protocol) is a way of using computer equipment to make low cost, or even free, telephone calls using a broadband internet connection. This article explains the technology, outlines the options and gives you the information you need to begin to calculate how much money VoIP might save you. It also explains how to make best use of the many opportunities and options that are now available associated with VoIP. With some VoIP telephone services providing unlimited landline calls for as little as £7 per month and calls for one penny a minute to anywhere in the world, anyone with teenagers in the house, or a vibrant business to run, is liable to find the information in the following pages a useful boost to their bank balance. For example, a business using Skype and calling UK National Rate numbers for 1500 minutes and US numbers for 1000 minutes would pay around £40, whilst according to the BT website, the BT landline rates for the same calls would be in the region of £250.

The logos for Skype and Vonnage, who are two leading VoIP providers.


Introduction

Each year many families and businesses spend far more than they need to on telephone charges,

especially if they are regularly communicating with friends, family, colleagues or clients, who are

based abroad. This document explains how an internet phone technology, called VoIP (short for Voice

Over Internet Protocol), can save you a lot of money. It will also demonstrate that behind the jargon,

users of VoIP can get started quickly and easily, even if they are only familiar with a few aspects of

computing. In practical terms, if you can word process, you can use VoIP. In fact, even if you can’t

word process, you will probably find VoIP easy-to-use, as long as you know someone confident

enough to install a couple of pieces of software on your computer. In short, use of VoIP is easier than

typing, easier than programming a microwave, and definitely easier than getting a video to record

your favourite television programmes. And the benefits of VoIP are that if you regularly spend more

than £7 a month on calls to UK landlines, or if you regularly call numbers in another country, VoIP

can save you money. For example, a business using Skype and calling UK National Rate numbers for

1500 minutes and US numbers for 1000 minutes would pay around £40, whilst according to the BT

website the BT landline rates for the same calls would be in the region of £250.

VoIP equals low cost calls to anywhere else in the world. In addition, VoIP enables businesses to set up low-cost virtual telephone lines in almost any major city in the world

VoIP equals free audio or video calls to people on the same network


What you need

VoIP makes most sense to people who already possess both a computer and a broadband service, and

who do so because they want to surf the internet. If you have the equipment needed to surf the web,

then you have all the kit that you will need to get started with VoIP. However, if you do not yet

possess a computer and / or a broadband connection, and if VoIP would make the difference between

you buying or not buying a computer, then the following is some food for thought.

If you need to buy a new machine... If you only want a computer to undertake simple office tasks,

surf the internet and communicate, then you can purchase a desktop PC running the LINUX operating

system from DABS Computers for around £150. This comes with a lot of free software and there is

much more software that you can download, if you need it (see our other articles). Add in the cost of a

large 17” LCD monitor for under £150 and you have a well specified computer for under £300.

Alternatively, for about £100 more, you can get a similarly specified computer with Microsoft

Windows installed (again, see our other articles for advice on free and low cost software that you

might use).

If you need to buy an internet connection…At the time of writing, a fast broadband connection in

the UK is available for between £10 and £20 per month. Such a connection would be enough to run

one and perhaps two separate VoIP phone lines, as well as leaving capacity for some limited internet

surfing at the same time. As a case study example, when talking to friends in business, it becomes

clear that by using VoIP many local businesses could massively cut call charges to customers and

suppliers, especially if those businesses are making a lot of calls to Europe or transatlantic calls to the

USA. VoIP can be up to ten times cheaper than standard trans-national call rates.

In short, VoIP offers lots of savings, but does require a little planning to be useful.

Hence the reason for this article.

For someone on the move, a £400 WiFi enabled laptop from Acer, plus a £30 Logitech camera with microphone, plus the free Skype software gives you a mobile telephone that is much cheaper than your mobile

phone. In addition, you can use it to video conference.

+


Hardware

The first hurdle related to VoIP, and the hurdle that probably causes most people to delay adopting a

VoIP-based telephone service, is the connection. A landline telephone connects to a simple socket

and is always ‘connected’ until you unplug it. We are familiar with this concept and it therefore

appears simple to us. In comparison, the connection options for a VoIP-based service can appear a

little bewildering. The following are the most common options from which you can choose.

Assuming that you have a computer and a broadband service, the cheapest VoIP ‘set-up’ can be

obtained by purchasing a £5 microphone and plugging it into the ‘microphone in’ port on your

computer. All you need to do then is to register with a free service, such as Skype, and download and

install the appropriate software (which in many cases is also free). You are then eligible for free or

low cost calls to other users on your network and inexpensive calls to everyone else.

If you want to be more sophisticated, for a little more investment in time and money, you can use

slightly more expensive wired headsets, or you can use one of the many significantly more expensive

wireless or bluetooth headsets. Whichever option you decide to adopt, the pros and cons are relatively

similar. If your computer is switched on, you can gain free and easy access to VoIP services, such as

Skype (more about which later). However, the downside with this plan is that if your computer or

your internet connection is switched off, your telephone service is effectively disconnected.

Thus, if you want to make use of a computer as your VoIP ‘gateway’, it is best to think of VoIP as

supplemental to your main landline, rather than your main service, unless your computer and your

internet service can be relied upon to be ‘always on’.

For advice on headsets, there are many articles at http://www.fineheadsets.com

If you use a computer as your VoIP gateway, then if you are communicating with other computer users you can engage in free video conferencing. VoIP provides opportunities for businesses to set up video networks

between themselves and their suppliers and clients. Remember that both audio and video calls between VoIP users on the same network are (normally) free.


In terms of increasing sophistication, the next kind of VoIP technology that may be of interest

concerns anyone with a PocketPC, such as an IPAQ or Palm, and anyone with a Play Station Portable

(PSP). Many VoIP services provide software that enable PocketPCs to act as a telephone. Some are

about to release software that will enable a PSP to act as a VoIP phone. Hence, if you have (or can

obtain cheaply) a WiFi enabled PocketPC or PSP, you will be able to use it as a telephone whenever

you are in the vicinity of a WiFi network, either at home or in the office or when you are on the move.

Given that many WiFi enabled PocketPCs are also Bluetooth enabled, this means you can use your

mobile phone’s Bluetooth headset with the PocketPC as an alternative to making expensive calls on

your mobile phone when out and about in a built up area. At the time of writing, many towns and

cities are in the process of rolling out area-wide WiFi coverage. Thus, over the course of the next

decade, many cities will have WiFi as a very real alternative to the mobile phone network.

In addition, if your PocketPC has the option to add a camera, you will be able to turn it into a

videophone. Plus, if it has a memory card slot, by adding a couple of gigabytes to memory you will

make your PocketPC into an effective phone/file storage device/media player.

Give your PocketPC a new lease of life as a video phone, file storage device and media player. Always bear in mind that games machines like the PSP are also mobile computers.

(See skypetips.internetvisitation.org, geekzone.co.nz and Skype.com)


Many towns and cities are planning extensive WiFi coverage. Free WiFi is available in Portland, USA, Rome Italy and Penzance in the UK.

.

Even now, many areas in which people meet have WiFi coverage. While coverage currently comes at a cost, expect this expense to diminish as city wide WiFi becomes a reality.

In South Korea, who lead the way in broadband coverage, 100 meg connections are not uncommon, and increasingly provision of free WiFi is seen as a way to entice additional business.


Two other ways to connect to VoIP services which do not rely on the use of computers, are as follows.

Both are attractive options because neither relies on your computer being ‘on’, hence, both options

more closely mimic a normal landline telephone (though, of course, they do rely on an ‘always on’

broadband internet connection). The first option is to connect a normal landline phone to network

adaptor, which plugs directly into one of the network ports on your internet router (assuming that you

have one). The second option is to purchase a WiFi enabled phone that can connect direct to your

WiFi enabled router (again assuming that you have one).

But first, a few words for readers who have not previously come across the concept of a ‘router’.

If you have a broadband internet service you will have a modem provided by your service provider.

This may be an ADSL jack, which connects (ironically) into a telephone socket and which keeps your

computer broadband electronically separate from your landline telephone conversations. Alternately,

if you have a cable connection via the optic cable that brings your cable TV into your house, you will

connect your computer equipment into a cable modem which keeps your television, landline and

computer connections separate within a single optic fibre cable.

Experienced computer users normally place a device called a router between their machine and the

ADSL jack or cable modem, provided by their ISP. The router provides at least two facilities that a

cable modem does not. First, a router usually contains a hardware firewall that prevents the external

world from ‘seeing’ if you have a computer and prevents hackers from sensing whether that computer

is switched on. Second, a router contains a line of network sockets into which additional computers or

network adaptors for VoIP phones can be plugged. This enables several computers, VoIP phones and

other network devices to use the same internet connection. Third, if your router is WiFi enabled, it

enables other WiFi devices to connect to the internet. For example, laptop computers, IPAQ

PocketPCs, PSP games consoles, WiFi web cams and WiFi VoIP phones.

A photo of the Sitecom Router that we use. Bought from maplin.co.uk, this model was less expensive to buy

than the next expensive rival. It also came with two WiFi cards, which its rivals did not. Plus it only took a few minutes to get a secure, password protected WiFi network up and running.


To connect a landline phone into an existing routr, you need a phone to network adaptor. Of the

many adaptors available, one that has good reviews on the web is the Linksys Phone Adaptor 2-Ports

for VOIP @ £45. As the name suggests you can connect two phones into this adaptor, which means

you can use it to give access to two separate VoIP services. Any landline phone can be used with the

adaptor but as an illustration you might consider the Panasonic KXTCD 430 DECT Digital Cordless

Phone (@ £15), which can be bought for a bargain price in a number of outlets.

In short, you can have a single fully functional, cordless VoIP system for around £60. Or you can set

up two VoIP telephone lines for a total investment of £75. Alternatively, if you want to go beyond

voice and enter into the world of video phones, products such as the Visufone are entering the market.

Such video phones connect directly into a network socket and provide video as well as audio chat but

without the need for a computer. However, the additional video functionality does not come without a

cost. At the time of writing, the Visufone has a price point around $400 in the US, with a UK price yet

to be determined.

Left: cordless phones can connect to VoIP network adaptors. Right: the Vuzufone brings both voice and video conferencing

without the need for a PC, but does so at a price.

Moving focus away from wired network connections to WiFi network connections, again, at the time

of writing there already exist a number of VoIP WiFi enabled phones, with more about to be released

onto the market over the next few months. Netgear is about to launch a WiFi phone that is Skype

compatible in the summer of 2006 (for £140), whilst Accton are racing Netgear to the market with the

VM1185T WiFy SkyFone, at a slightly lower price point. At the same time, at the high end of the

market Philips is preparing to launch its VP5500 in the autumn of 2006. This is a phone system which

includes a camera and links to a television for video conferencing, without the need for a computer

(price has yet to be announced).

Left, the Netgear WiFi phone, as available from Skype. Right and Centre, pictures of the Philips VP5500, which brings wireless audio and video.


Meanwhile, over the horizon, come a number of additional technologies which will be worth keeping

an eye on. For example, there are products and services for enabling a small business to run a VoIP

based switchboard. As an instance of this technology, a quick search in google will enable you to

locate people who can advise how to set up a complete virtual company, complete with virtual

external numbers around the world and a virtual internal telephone system which runs across your

computer network. As another example, Scandinavian company IPDrum have created a cable that

you can connect to an old mobile phone (assuming that like many people you have an old, surplus

mobile in your home). You use the IPdrum cable to connect your old mobile to your computer which

is running Skype. Then, if you were to want to call abroad, instead of having to pay expensive mobile

connection charges to other networks you phone your old mobile at home and your computer forwards

your calls at the cost of your national rate mobile-to-mobile charge, plus the much less expensive

Skype rates (of about a penny a minute). Finally, expect the next generation of mobile phones which

have VoIP and / or WiFi capabilities built into them, so that when you are near a WiFi hotspot

your phone will call out on VoIP, meaning that you only incur high mobile phone charges when you

are out of range of a WiFi transmitter.

The Nokia E series VoIP/WiFi/mobile phones, though Skype has yet to be ported onto the Nokia Symbian operating system, and

internet postings were unclear just how much software was yet available to make full use of these phones.

In summary: to recap the story so far, the absolute least cost VoIP solution is to attach a microphone

of some kind to an existing computer (cost = £10). The next least expensive option is to get a

telephone-to-computer-network adaptor and plug the adaptor into your router, assuming your router

has a spare network socket, then attach a cordless landline phone into the adaptor and you have a

VoIP solution that will work even when your computer is switched off (cost = £60). Other options

worth considering, but which are only low cost if you already possess the equipment, are: (i) making

a WiFi enabled PocketPC into a Skype VoIP phone, (ii) making a PSP (Play Station Portable) into a

wifi enabled VoIP phone, or (iii) renovating an old computer for use as a VoIP/video conference

phone. Finally, (iv) remember that a new desktop PC with the Linux operating system can be bought

for as little as £150 and would be compatible with many VoIP providers, giving you a phone and an

additional computer filled with free office software for very little expenditure (cost = £150).


VoIp Services

In this section the focus will fall upon one of the main ‘players’ in the VoIP market, Skype. As a

comparison, the costs and benefits of Skype will be compared and contrasted with those of another

large VoIP provider, called Vonnage. The overall conclusion is that, like the options that face a new

entrant to the mobile phone market, the best VoIP provider will depend upon the kind of telephone

calls that you make. Each service is optimised for a different client group.

Skype (skype.com). Skype has the great advantage that it costs nothing to subscribe to their basic

service. Using this service, calls to other Skype numbers are free (wherever they are in the world).

Thus, if you can persuade those with whom you converse on a regular basis to also subscribe to Skype

you can enjoy free VoIP audio and video calls, which for well organised families, groups and

businesses can obviously save a lot of money. Where Skype make their money is by selling two

commercial services to their huge user-base. These services are Skype-In and Skype-Out. Skype-In

enables a business to set up a telephone number, along with voice mail, in pretty much any city in the

industrialised world, for a cost of €30 (Euros). In contrast, Skype-Out sells you call credit that enables

you to call any landline in the world for a cost of 1.1 pence per minute, with calls to mobiles being

charged at 21p a minute. As an additional inducement that will be of interest to marketeers and

educators, Skype are testing a service in which you can web cast to100 people simultaneously in a

kind of electronic lecture theatre.

Vonnage (vonage.co.uk). Vonnage has a very different commercial model to Skype. With Vonnage,

you pay a small ACTIVATION price to begin an account, containing a single UK Vonnage phone

number. (However, this price does include provision of a LinkSys phone-to-computer-network

adaptor, specifically customised to work on the Vonnage network, and so is an inexpensive way to

obtain such an adaptor). Then, with regard COST OF OUTGOING CALLS, you pay a flat rate fee

which covers all calls to UK landline phones. The flat fee is £8 for residential customers, £20 for the

first phone in a small business and £10 for each subsequent phone in a small business. At first glance,

the £20 cost for a first line for business might appear high, but there are some additional services that

come ‘free’ with the plan. For instance, a free fax line.

When comparing the two VoIP services, an initial inspection makes Vonnage look very attractive. The

strength of the Vonnage price plan is that you know what you will have to pay. However, on closer

inspection you discover that there are a number of hidden extras that can quickly bump up the price

that you will need to pay. If you call mobiles then you are charged an extra: 20p for daytime, 15p for

evening and 5p for the weekend. You are also charged 2p a minute on calls to many foreign countries.

Thus, Skype is better for a business making less than 1500 minutes of landline calls a month because

the monthly costs associated with Skype-Out would be lower than the £20 charged per month by

Vonnage. Over 1500 minutes of landline calls and the choice between the two services depends on the

number of international and mobile phone calls that need to be made, and when. Assuming business

hours, the mobile phone charges are equal and can therefore be ignored from this comparison. On

calls to America, the difference in the rate is between 0.5 and 1 penny per minute (the Vonnage table

of rates did not specify whether VAT was being charged). In the grand scheme of things, even 1000

minutes of calls would only make £10 worth of difference to the final bill and so may not be worth the

time it would take to worry about the price differentials between the two plans. Both VoIP services are

very much cheaper than BT landlines, which for 1500 minutes of national calls and 1000 minutes of

international calls would (according to the BT web site) cost 10p a minute for daytime calls to both

(non-local) UK and US landlines, giving a total spend of £250, compared to the total VoIP cost of

between £35 and £45.

In short, if you have a huge volume of calls, the decision will probably depend upon whether you

value a free fax line, or more importantly, which network (if any) contains the people you are calling,

because typically calls between people on the same network are free, no matter where they are in the

world. If you can get the people you wish to call to subscribe to Skype, then your call charges drop to

zero.


Conclusions

VoIP presents some interesting opportunities for large or extended families and groups of friends,

particularly if they are widely distributed throughout the world. And the future of VoIP looks assured

in urban centres in which widespread WiFi is planned, implemented and maintained. However, it is

businesses that stand to gain most from embracing the opportunities that VoIP offers. For example,

imagine a small business with two or three staff selling small products across the internet to a world

clientele.

A good solution for a small business, with both a national and an international focus, is to use Skype

allied with a LinkSys telephone-to-network adaptor and two cordless phones, each with a separate

Skype account associated with it, one account for outgoing calls and one account for incoming

calls.

On the Skype account designated for incoming calls, the business should purchase Skype-In, with a

virtual telephone number in all the countries containing an existing or a potential customer base.

Skype-In costs around £20 per year per number and, arguably, this is a small price to pay for a

telephone number that immediately communicates to international customers. There is also a

commitment to both sales and after sales service. A national rate number implies a much more

significant ‘presence’ in a country than does a web link.

On the Skype account designated for outgoing calls, the business should purchase a single Skype In

number, along with some Skype-Out credit. This phone can then be designated for national and

international calls. It is also the number that can be given to suppliers and to others that you do not

wish to phone the main, advertised office line. The business can then keep any advertised landlines for

the use of incoming customer orders and customer service, associated with UK customers. The benefit

of this strategy being that the number of costly landlines can then be minimised.

In addition, create two additional Skype accounts, which do not have either Skype-In or Skype-Out

associated with them, and install these on one or more computers. Use one of the accounts as a

private circuit between the business, staff who are off-site in a WiFi enabled location and support

services (assuming that support services would also like to save money by adopting Skype). Use the

second additional account as a video link, advertised on your web site, for clients who would like to

video link to you for free, rather than pay any phone charges at all. (Though you may want to limit the

times that the link is operational, and thus buy a Skype voice mail which both takes messages and

tells callers when the link will next be operational).

In terms of costs, the preceding solution would involve a capital outlay of £75-£100 and a yearly

outlay of around £100-£120 (assuming 5 Skype-In numbers spread around the world). In terms of

benefits, call charges would drop to about 10-15% of their current level. There would be dedicated

lines enabling suppliers and others to call in without disrupting customer sales or customer care lines.

International customers would feel more confident because a local phone number would allay fears of

having to make international calls to place orders or resolve customer care issues. Finally, if repeat

customers and other important ‘contacts’ can be persuaded to also migrate to Skype then a proportion

of all call charges, for everyone, will fall to zero, wherever contacts associated with the business are

located within the world.

As a final thought, it would be wise for small businesses to keep abreast of developments with Skype

web casting services with a view to making regular web casts about products and services, which

potential clients can view and to which they can respond. This would be a relatively novel service in

many sectors of business and thus could be used to both directly communicate with clients and

potential clients, but also as a piece of news placed in relevant journals and periodicals, to raise the

profile of the business in general.


ABOUT THE AUTHOR

Dr Peter Edward Henry Smee PhD, MSc, BSc.

Over the course of the last twenty years, I have worked extensively in a wide variety of roles related

to Education and to the design and development of Accelerated Learning Solutions, eLearning

Digital Resources, Interactive Educational Technologies, eBusiness Initiatives, Creative

Thinking Software and Collaborative Meeting Environments. And currently, at the time of writing

this text, I am working as a self employed Independent Consultant and Trainer.

For example, in terms of teaching and educational strategy, I have an interest in researching the application

of Brain Entrainment Technologies, such as those associated with the research groups involved with the

development of Hemisync, Holosync, Brain State Tech and Heart Math, with regard to accelerating learning

and with regard to encouraging more insightful decision making.

In terms of my wider background, I have worked: as a Teacher and Trainer, in a university department that

was twice rated as the Best for Quality of Teaching in Technology in the UK; as an Instructional Designer,

twice nominated for national recognition for my work integrating accelerated learning techniques and

technologies into innovative approaches to teaching and learning; as an Innovation Facilitator, helping

Teachers and Business Professionals to use creative thinking techniques and technologies to design new

products and services and to plan more effectively for the future; as a Conference Presenter, with experience

of successfully addressing large groups of academics, managers and business entrepreneurs; as a Marketing

and Communications Strategist, teaching undergraduate business students how to use the web to promote

ideas, products and services; as an Education Manager, each year responsible for the administration of a

dozen undergraduate modules and for the teaching and learning experiences of a hundred and fifty students; as

a Bid Writer, whose proposals have twice been later used as exemplars for future submissions; and, as an

Educational Technologist, with both national and international-level recognition for my work associated with

the UI (User Interface) and UX (User Experience) Design and Development of Interactive Educational

Technologies, Web Based Communications and Collaborative Meeting Environments.

In terms of career highlights: (i) I have enjoyed success as an Innovation Facilitator, working with corporate

clients; (ii) I was the Lead UI and UX Designer for the first Innovations Laboratory in the South West of the

UK, a space optimised for: Graphic Facilitation, Concept Visualisation, Web-based Anonymous Brainstorming,

Web-based Collaborative Authoring, Computer-Mediated Conferencing, Creative Thinking and Group

Discussion; (iii) I have designed and programmed over a dozen medium sized software applications, including:

a Mind Mapping application, Scribble Pad, Paint Pad, Flow Charter, Gantt Charter, Marking Machine and

Case-Based Discussion Tool; (iv) I have written, designed and illustrated thousands of pages of well-received

electronic books, several thousand PowerPoint slides and over a dozen educational posters; (v) I helped a small

business to utilise e-commerce technologies to increase profits by 500% in three years; (vi) I have contributed

to the UI and UX Design of a suite of computer labs and two institution-wide CMS and VLE; and, (vii) I have

taught over a thousand undergraduate students on modules related to Business, Public Relations, Educational

Computing and Information Technology.

If you feel that you would like me to provide you with coaching, training or consultancy, you can read an

up-to-date CV and access my contact details by visiting: http://www.circle-of-

excellence.com/petesmee_cv.htm. Currently, I live in Basel in Switzerland, which has fast air and train links

with most major cities in Europe.

http://www.circle-of-excellence.com/petesmee_cv.htm

http://www.circle-of-excellence.com/petesmee_cv.htm

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