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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.

VoIP for free

While some VoIP services require extra hardware (see Wired VoIP section) and payment of a monthly subscription, there are free options for those looking to get started.

Some examples include:

Skype recently opened a (Credit: Skype)

First launched in 2003, Skype has grown to become one of the most popular VoIP services on the planet. Initially Skype allowed voice calls to be made only between personal computers, however, later versions have included a "SkypeOut" feature that enabled calls to conventional landline and mobile phones.

Once downloaded and installed, you'll be prompted to set up a Skype account into which you can deposit cash to cover SkypeOut calls and text messages.

The software also allows for chat sessions and, if you have a web camera installed, video calling. Skype has concentrated on improving the quality of its video calls and now full-screen, high-resolution video calls are possible.

From its website, Skype also offers a range of headset microphones for PC use. Alternatively, you can purchase a Skype-enabled cordless phone that removes the need for a computer when making or receiving calls.

These phones allow you to choose whether to call out via your existing landline connection or over a Skype link each time you make a call. The handset also allows you to see which of your Skype contacts is currently online and available to talk or chat.

Google's in on the VoIP action too. (Credit: Google)

Google Talk
As part of its ever-expanding portfolio of services, Google has added VoIP calling to its popular Gmail application. Users have the option of downloading a software plug-in to their PC or using a web-based version.

Once Gmail Voice is installed, it's simply a matter of clicking on an icon next to the person you want to talk with. You have the option of conducting a voice call or, if you have a webcam, a video call. Even if the person you're calling doesn't have a camera, you can still have a one-way video and two-way audio call.

If you don't want to download the extra software, Google gives the option of a web-based applet that allows you to set up calls to your contacts. The details of each contact and their current status is shown in a small pop-up window. By clicking on an icon near a name you can establish a text chat session or a voice call.

Mobile VoIP

When VoIP first appeared it allowed computer-to-computer voice calls, but since then the technology has gone mobile. There are two different ways you can take advantage of VoIP on a mobile handset: via your existing carrier's network or by using a Wi-Fi hotspot.

Via your carrier
Because mobile phones use packet-based networks to connect your calls, send text messages and access the internet, it makes them perfect for applications such as VoIP. A VoIP call simply becomes another data transmission to and from your phone.

VoIP over 3G is becoming more common. Skype for iPhone launched in April 2009.(Credit: Skype)

Obviously data transmissions will use up a portion of your mobile data allowance, so it's worth comparing how much it will cost you to make a VoIP call rather than simply dialling over the conventional network.

For example, a 10-minute call on Skype is likely to generate roughly 5 megabytes of data. If you're on a generous data plan this won't be a problem, but if you've opted for a cheaper one with tight download limits it's worth doing your maths homework.

Meanwhile, at least one carrier has embraced VoIP calling over its network by including Skype minutes as part of some of its subscriber plans.

3 Mobile bundles 4000 minutes of Skype-to-Skype calls in its X-Series mobile internet plans. This means customers can make more than 66 hours of calls each month to other Skype users from their mobile handset.

Via a Wi-Fi link
A second option for using VoIP on your mobile is to do so over a Wi-Fi network. A number of smartphone handsets have the ability to be configured to allow VoIP calls to be made and received, letting you bypass your carrier's network altogether.

Check with your VoIP service provider or try an online search for your handset model and VoIP. Detailed instructions on how to configure a service are relatively easy to find and follow.

Then, each time you are within range of a Wi-Fi network, you’ll have the option of making calls over the internet rather than the mobile network. You’ll also be able to answer calls from people dialling your VoIP number.

Wired VoIP

One of the most popular ways of using VoIP services is as a replacement (or supplement) for an existing home phone line. Rather than forking out for expensive interstate and international calls, VoIP users can enjoy rock-bottom rates to virtually anywhere on the planet. Plans vary widely in cost and inclusions so it's worth shopping around (see Australian service provider summary on the next page).

If you regularly call friends or family interstate or overseas, it could be worth putting them on the same VoIP provider. That way all your calls to and from them will be free.

The easiest way to establish a home VoIP connection involves acquiring some hardware. There are a range of choices, depending on the type of equipment you already have and the way in which you want to make and receive calls. There are analog telephone adapters (ATAs), dedicated VoIP phone handsets, and broadband modems that have VoIP capabilities built in.

This packs it all in — modem, router and phone. (Credit: Engin)

ATAs let you use an existing phone handset to make VoIP calls. They're a small box that connects to your broadband modem/router with another socket into which an existing phone handset is plugged. ATAs work with both wired and cordless phones and are an easy way to incorporate VoIP calling into a household at minimal cost. One example is the Linksys SPA2100 VoIP Router from MyNetFone. This unit retails for $69.95 and includes $5 of call credit.

Dedicated VoIP handsets, meanwhile, look like a regular desk phone but plug directly into a broadband router rather than the traditional phone socket on the wall. All the work of converting human voice into a data stream is done by the phone which then sends it out over the broadband connection. An example of such a phone is the IP Telephone unit from networking company D-Link. This model connects directly to your existing broadband modem.

If you're in the market for a new broadband modem/router, another option is to select one that incorporates VoIP capabilities. This allows you to plug an existing phone handset directly into the unit, and removes the need for an extra box and associated cables.

Using a PC
Another option is to make and receive calls using your PC. To do this you'll need a small software application called a softphone. Every VoIP service provider offers their own softphone variant, but all operate in a similar way.

Most have a screen display that looks like a conventional phone. Clicking the on-screen key pad allows you to dial or receive calls. You'll need a headset or a decent microphone and speakers to use your softphone, and the PC must remain on anytime you want to call or be called.

Going naked

Growing numbers of ISPs are now offering what's called "naked DSL" services. These services do away with the monthly rental that broadband users have typically paid for the phone line that carries their service.

If you're thinking about replacing your home phone with a VoIP service, naked DSL makes complete sense as you won't be paying for a phone service that you don't want.

Most naked DSL plans come with an included VoIP service, making the decision even easier. For example, iiNet offers a Naked Home service that includes up to 4GB of data usage and a VoIP service for AU$49.95 per month.

Aussie VoIP service providers

According to research firm Market Clarity, there are more than 300 VoIP service providers in Australia, which means you'll be spoilt for choice regardless of where you live.

Most offer the option of purchasing necessary hardware from them or bringing your own that you've purchased from a retail store (or often even another VoIP provider).

There are a myriad of plans on the market, so it's worth shopping around before deciding on a provider. Some examples of current plans on offer from six providers are:

Minimum monthly Fee $9.95 $9.95 $14.95 $0.00 $0.00 $0.00
Local calls 15¢ untimed 10¢ untimed 300 calls/month 12.5¢ untimed 12.5¢ untimed 12¢ untimed
National calls 15¢ untimed 10¢ untimed 300 calls/month 12.5¢ untimed 12.5¢ untimed 12¢ untimed
Calls to mobiles 29¢/min 27¢/min 100 calls or 500min/month 24¢/min 27.5¢/min 27¢/min
International calls From 5¢/min From 1.9¢/min From 1.7¢/min From 1.9¢/min From 1.8¢/min From 1.9¢/min
Free calls To other iiNet customers To other Engin users To other GoTalk customers To other MyNetFone users To other Freshtel users To other Faktortel users
Inbound number? Included Included Included Optional extra Optional extra Optional extra