Calling common sense

VoIP benefits are evident to those who take it up, so why are large companies so slow to give it credit?

commentary VoIP benefits are evident to those who take it up, so why are large companies so slow to give it credit?

The benefits of Voice over Internet Protocol (VoIP) have been widely known amongst consumers for some time now. While uptake within the business community may seem sluggish, pockets of success stories among private and public entities embracing this technology have been encouraging.

Return-on-investment analysis for these organisations has been extremely compelling. Most hope to eventually slash around 50 percent in total call and infrastructure costs.

Online directory service Sensis rolled out its VoIP solution for 1500 employees in under 12 weeks, while the State Revenue Office of Victoria has implemented the technology over two sites involving 450 staff.

In terms of VoIP applications, after IKEA and meatballs, Skype is probably Sweden's next best export. Its CEO Niklas Zennström -- who co-authored the software for the notoriously popular Kazaa file-sharing network -- has been aggressively targeting the big end of town. About a third of its customers use Skype for business purposes but the product is not meant to replace the PABX entirely. It is instead meant to complement it.

Despite the obvious plus points, bigger firms are slow to adopt VoIP solutions.
At the moment, Skype is perhaps the most well-known VoIP consumer product around, with tens of millions of users to date. However, big names such as Microsoft and Yahoo are hot on Skype's heels. Instant messaging applications from Microsoft and Yahoo have integrated VoIP functions which let users all over the world call each other for free. There is no extra charge for using this software -- simply ensure you have a headset and a connection to the Web.

As it is, traditional telcos such as Telstra are feeling the heat. On the consumer end, wireless broadband provider Unwired teamed up with VoIP technology provider Freshtel in August to offer Web-based telephony services. Both companies hope their service will create a huge dent in Telstra's revenue mix.

As Telstra executives recently admitted -- despite recording its best annual profit of $4.45 billion -- fixed-line earnings are on the decline. CFO John Stanhope says customers are increasing their usage of low-margin services such as mobiles and broadband at the expense of its traditional voice offerings. It's therefore imperative for the telco to seek new sources of revenue.

If two parties have the same Freshtel VoIP application (called Firefly), there's no charge. Unwired boasts a flat rate of 10 cents to other Australian cities compared with Telstra's $1.50 for the first 20 minutes and 25 cents per minute after. International call charges almost mirror widely used IDD call cards at under four cents a minute to the US while Telstra charges between 21 and 39 cents for the same amount of time.

Some IT managers I've spoken to hope to convince their bosses that VoIP is the way to go. Many are Skype users at home, and want to extend the advantages of Web telephony to the office.

Sensis voice and technology solutions manager Mark Turkington says his his biggest challenge is the VoIP "naysayers". These are colleagues within the same IT team who don't want extra machines to administer. "They were stuck in a mental paradigm that all telephony happened under the 'black magic' of traditional PABX systems and should have nothing to do with normal network traffic," he says. But in the end, he says their fears are laid to rest so they come around.

Despite the obvious plus points, bigger firms are slow to adopt VoIP solutions. To the thousands of SMEs, however, it's a great opportunity to vastly reduce telephone bills and ultimately improve their bottom line.

Are you investigating VoIP solutions for your business? What challenges have you encountered? Send your feedback to me at

Fran Foo is ZDNet Australia managing editor and Technology & Business contributing editor.

This article was first published in Technology & Business magazine.
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