VoIP guide: Voice over IP in Australia

Tired of paying the phone bill? You don't have to be tech savvy to make calls over the internet. This Australian guide explains all that you need to know about using VoIP (or Voice over Internet Protocol) services.

What is VoIP and how does it work?

If you find yourself groaning every time you open your monthly telephone phone bill, there's a technology that can help you to significantly slash those hefty call costs.

Since it first appeared in the mid 1990s, VoIP (Voice over Internet Protocol) has been used by growing numbers of people to avoid pricey phone calls. It does this by sending calls over the internet rather than traditional phone networks.

Making use of the internet in this way means the cost of calls can be significantly below that charged by phone companies. In some cases, calls can even be free.

The technology underpinning VoIP was initially developed in the late 1970s, but it took almost 20 years to evolve from a computer novelty into a household service. It's now used by hundreds of thousands of people every day.

VoIP works in a relatively simple way. Each time you make a phone call your voice is converted into a stream of data. Then, rather than being sent over the phone network, this data stream travels over your broadband internet connection.

Each data packet is labelled with its destination address (the person you're calling) and moves through the internet in the same way as web pages and file downloads. When they get to their destination, the packets are reassembled and converted back into sound waves. When you have this process happening simultaneously in two directions, you've got a phone call.

If the person you're calling is also using a VoIP service, your call will remain on the internet for its entire journey. However, if you're dialling a conventional phone, the call will be carried as far as possible over the internet before being handed back to the relevant phone network.

Most VoIP services also come with an allocated landline phone number which allows other people to call you. In these cases the call will be routed to the nearest handover point (called a POP or point of presence) and then travel over the internet to your VoIP phone or computer.

The benefits

The biggest benefit of VoIP can be summed up in a single word: cost. Because VoIP service providers avoid carrier phone networks, they're able to keep their charges for calls very low. In fact, if you're calling someone who uses the same VoIP service, the call is likely to be free.

Local and national calls tend to be offered for a single per-call charge, rather than being time based. This is achieved by carrying the call over the internet to the local area of the person being called before handing it back to the phone network. That way it's treated as a local call by the phone carrier.

International calls are typically charged in increments of cents per minute. Some VoIP service providers even offer all-you-can-eat international calling plans to selected countries.

As well as cheap calls, most VoIP providers also offer a smorgasbord of included features. This is possible because VoIP calls are essentially a stream of data and can therefore be processed and stored in a range of interesting ways.

For example, many VoIP providers offer a free voice mail box that can send you an email alert each time a message is left. Other features on offer include caller ID, caller blocking and call diversions to another nominated phone number.

Some service providers also offer three-way calling, where you can set up a mini-conference call with two other people, as well as do-not-disturb and follow-me functions where calls divert to another number if not answered within a pre-determined period of time.

The end result is a telephone service that can be far more flexible than a traditional offering, and is comparable to sophisticated business systems costing many thousands of dollars.

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