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VoIP stands for Voice over Internet Protocol. VoIP involves the delivery of voice information over public and private IP based networks such as the Internet. It represents a form of communication convergence whereby a common IP infrastructure is used to transmit voice, fax, data and multimedia traffic.

How does VoIP work?

VoIP works by sending voice information in digital packets rather than the traditional circuit-committed protocols public switched telephone networks (PSTN).

VoIP takes an analog voice signal and, prior to sending it to the dialed destination, converts it into digital format so that it can be delivered over an IP network such as the Internet.

What are the advantages of using VoIP rather than PSTN?

VoIP’s primary competitive advantages are efficiency and economy.

Telephone calls routed over the Internet bypass a significant portion of international long distance tariffs.

Packet based networks pool data for efficient use of bandwidth (unlike circuit-based networks, which must reserve a fixed amount of bandwidth for each call.)
Packet-based networks are cheaper to build and maintain than circuit based networks.


Where is the VOIP Industry?

The value proposition offered by VoIP service and technology providers, is leading industry analysts to expect an escalation in VOIP technology, creating strong financial growth among VoIP providers in the near future.

VoIP traffic is projected to account for approximately 75 percent of the world’s voice traffic by 2007, according to Frost & Sullivan.

Insight Research adds that the global telecommunications industry will return to historic growth patterns beginning in 2004, says a new market report.

According to the study, worldwide telecommunications services revenue is expected to grow at a compounded annual rate of eight percent from 2004 to 2009.

In North America alone, the market for IP telephony approached $400 million in 2002 and is expected to reach almost $12 billion by 2006.

According to a new study conducted by analysis firm Jupiter Research, Internet telephony is set to account for about 12% of global telephone revenues within the next five years. Jupiter goes on to predict that the VoIP market will account for roughly $32 billion of the estimated overall market of $260 billion by the year 2009.

VoIP brings new revenue-generating opportunities to the telephony market by combining voice services with other IP applications. - Jupiter Research broadband specialist.

According to a Published Jupiter Research Report.

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