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| Choosing VoIP |
July 21, 2005 |
By Greg Michetti
A small business owner evaluates three Voice over IP services. Read on, before buying into VoIP.
It’s no exaggeration to say the VoIP market is exploding.
In early April, a Sandvine press release noted there are more than 1,100 VoIP providers worldwide, a result which rocked even the company’s president and CEO a little. “I was personally pretty shocked at that number,” David Caputo said. “There is one company starting up per day.”
Waterloo, Ont.,-based Sandvine arrived at the number by analyzing data traffic moving across its global network of ISP customer sites. Many companies which operate VoIP services use high-tech broadband equipment manufactured by Sandvine.
What’s the attraction? Why are most business people in the small- to medium-sized space looking at VoIP? Easy: for too long they’ve put up with high phone rates, goofy multi-page invoices, inconsistent service levels and above all, a lack of accountability from telcos across the country. Finally, somebody has come along and presented a different service offering at lower prices. Now the question is who you should select as your VoIP provider.
Like any other small business owner, I decided to compare VoIP providers and took a good hard look at three of them: Vonage, because in terms of marketing it seems to be the most popular; Montreal-based babyTEL, as it represents one of the gardenvariety VoIP providers; and finally, Shaw Cable, a company that just recently entered the market but will be a big player.
Shaw is well positioned for several reasons. To set up its VoIP, a technician just changes the telephone connection in your home, meaning you keep all your existing phones throughout the house or business. I found the voice quality with Shaw to be better than the pure VoIP carriers, most likely because Shaw runs on its own dedicated “PacketCable” network, which is separate from Internet and cable TV.
While I found the Web-based e-mail support from Vonage and babyTEL to be quick — I received e-mails back within an hour — there’s nothing like talking to a real person who can actually come out to your home. Shaw also has a built-in market with its existing customer base, and many find it convenient to pay justone all-inclusive cable TV/Internet/telephone bill.
Also, people are more likely to sign up to a service with a company they already use and we all tend to favour well-established companies, unless we see significantly lower prices.
On a monthly basis, Vonage and babyTEL are far less costly but every so often the voice quality would fade or dip when I yakked with my sister in Newfoundland. The connection never dropped but it was occasionally flaky. However, the actual connection was indistinguishable from my Telus phone for the overwhelming majority of the time. Still, for business use, you want consistency.
One of my associates, Raja Lamba, of Edmonton-based software development firm Dignity Central, checked out the Vonage hardware.
“I liked the fact that the Vonage box acted like a regular Linksys router. All the unused ports were blocked, and it even assigned its own subnet mask without any set up,” Lamba said.
He also loved Vonage’s Web-based administration and how it tracked calls. “As a programmer, I can see a day when an event model could be set up for the signals coming in and going out. An example of this might be tracking the number of minutes spent per client with each consultant, and automatically having your billing system generate invoices, and perhaps even fax the invoice out.”
One of our pet peeves with Vonage came when a second call came in while on the phone. The “call waiting” beeps were frequent enough that we would have to repeat ourselves several times when asking to put the current caller on hold.
“Continuing a conversation is extremely difficult when call waiting occurs,” said another user, programmer Chris Kerr.
Where does VoIP really pay off?
VoIP clearly has its place and people who make a lot of long-distance calls simply have to compare VoIP costs with the monthly phone bill from their telco to see the benefits. It seems, however, that those who will get the biggest bang for their buck include:
Companies: If your firm is trying to make a global impression, this is a great way to do it, especially if you want to provide North America-wide telephone customer support. VoIP also works well for branch offices that make most of their long-distance calls to a head office.
Figure out the total costs involved, including re-cabling. Also, if you must get a new phone number, how is that going to impact your customer? Some people get nervous if you change your phone number, so do your own “VoIP Impact Assessment” plan here. Check with your staff, too. The way they use the phone is often different from how you use the phone.
SOHO: VoIP is nice for those who work out of a home office and want a second line in addition to a residential line. The incremental cost for one phone is not bad and besides business use, the rest of the family can use it to call Grandma in Kissimmee anytime. It can be used as a home fax line, too. By the way, unless you know how much time you will spend on the phone, always start out with a basic minimal plan, as you can always upgrade. Remember, it’s an e-mail world and for many of us, that’s how we prefer to communicate.
Travellers: If you travel, you may want to bring your VoIP router with you. They aren’t that big and remember, your area code and phone number follow you.
A local phone call from a Manhattan hotel room costs around US$2 but there are city, state and hotel taxes on top of that. By the time you get your Visa bill, it’s close to $5.00 a pop in Canadian dollars. Five of these calls a month pay for your babyTEL VoIP connection.
Summary
After completing my analysis, I have three major conclusions.
First, VoIP telephone services are a lot like handheld PDAs: they are very, very personal, so what works for you may not work for everyone. Besides monthly charges, consider all the costs, including new phone hardware, additional cabling and how it might impact your RIM device and cellphone.
Second, VoIP reminded me of another deregulating business: airlines.
The great pricing is often offset by inconvenience. Want to use your Aeroplan points to fly from Toronto to Vancouver? Sure, you have to stop in North Bay, Winnipeg and Saskatoon, but hey, the price is right.
Third, so far, cable companies like Shaw and Rogers have escaped the price regulations enforced by the CRTC on telcos like Telus and BCE. When that changes, and provided these firms can settle with their unions and lower operation costs, their prices should come down and services should increase.
Remember, Telus is looking at the TV business these days.
The struggle of controlling the information “pipe” into your home continues.
I’ve always had this personal theory that at the end of the day, the winner will be the one with the deepest pockets and, like it or not, that usually means the phone guys.
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