by Ronald Manalastas

Created on: July 01, 2010   Last Updated: November 02, 2010

VOIP is the acronym for Voice over Internet Protocol, a transmission technology converting an analog voice signal (e.g. human voice over the phone) to digital format and compressing and translating the signal into Internet Protocol (IP) packets for delivery over the Internet or other packet-switched networks. To complete a 2-way VOIP communication, the process is reversed at the receiving end. When a call is received at the other end, the signal is decompressed, reassembled, and routed to a local circuit switch.

VOIP has proven to be a revolutionary communication solution that has dramatically changed the way people communicate over the telephone as it bypasses the public switched telephone network (PSTN) in the origination, transmission, and termination of calls. VOIP is used interchangeably with terms such as: IP telephony, voice over broadband, broadband telephony, and Internet telephony which embraces the provision of voice, facsimile, and voice messaging applications.

Over the last few years, VOIP has charted an average annual increase of 12% in global adoption rate. More and more people and organizations continue to appreciate the convenience and economic utility of using the service i.e. the unique advantage of avoiding service tolls charged by traditional telephone service providers. In the US, since 2006, the popularity of VoIP services has escalated to a rate of 125% and has engaged a total of 9 million subscribers – 9% of US households, 36% of large businesses, 23% of midsized companies, and 14% of small businesses, which is expected to triple by the end of 2010.

Apart from the main rationale of avoiding toll calls, other VOIP demand drivers include the migration from old plain telephone system (POTS) to IP-based communication solution, the integration of multi-site phone systems under a private network platform, the convergence of voice and data networks, the availability of other web-based services, and the enjoyment of global access and connectivity that will catapult requirements for mobile VOIP subscription from 913,000 in 2006 to 22 million by 2011.

Even phone companies are using VOIP to enhance their communication networks and generate substantial reduction in bandwidth consumption for the long haul. Phone companies route sizable phone traffic through a circuit switch that creates access into a VOIP gateway. For a fee, phone companies provide VOIP services across home and institutional markets with software called soft phone, a facility

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