VoIP in the Residential Market

Perhaps a not well-known fact is that VoIP started in the early days of the information superhighway, how the internet was known in the ’90s. In 1996 a startup company called Vocaltec launched the Internet Phone; introducing us to the VoIP era and Home/Office Phone alternative. Sure it wasn’t like it is today but there’s a long history behind it on his almost twenty years of existence. Fast-forward to the 2000s and a major development that started in 2004 was the introduction of mass-market VoIP services which utilizes existing broadband Internet access. This allows subscribers place and receives telephone calls in much the same manner as they would via the public switched telephone network (PSTN). Full-service VoIP phone companies provide inbound and outbound service with Direct Inbound Dialing. Many offer unlimited domestic calling for a flat monthly subscription fee. This sometimes includes international calls to certain countries. Phone calls between subscribers of the same provider are usually free when flat-fee service is not available. A VoIP analog telephone adapter (ATA) is necessary to connect to a VoIP service provider. If you are wondering what is Vocaltec doing now… in their consumer products roaster is include the award-winning magicJack; launched in the market in 2008 and with over 8-million units sold to the date worldwide. It’s estimated more than 1-million magicJack units have been sold in Canada.
Dedicated VoIP phones connect directly to the IP network using technologies such as wired Ethernet or wireless Wi-Fi. They are typically designed in the style of traditional digital business telephones.

An analog telephone adapter (ATA) is a device that connects to the network and implements the electronics and firmware to operate a conventional analog telephone attached through a modular phone jack. Some residential Internet gateways and cable modems have this function built in.

A softphone is application software installed on a networked computer that is equipped with a microphone and speaker, or headset. The application typically presents a dial pad and display field to the user to operate the application by mouse clicks or keyboard input. There are several ways of implementing VoIP; see example in the picture. The use of a battery backup is a best practice to keep internet and telephone services going even in the event of a power outage.

Skype Revolution
Skype first came to the public’s attention with the launch of beta PC software based in August 2003 and quickly established itself as the de facto standard for internet PC-to-PC voice communications. The Skype application allowed users to make computer-to-computer calls for free and also included a rudimentary instant messenger program to allow text communication. Over time it added conference chat (multipart conversations). Then Skype rolled out new services that allowed users to call landlines and mobile phones from Skype at greatly reduced costs and by the end of 2005 had integrated video chat into its software. With the fundamentals in place, Skype had firmly established as the market leader for cheap calls online and its service was seen as a benchmark for other operators. On October 13th, 2011 Microsoft closed out the acquisition of Skype for $8.5 billion. Microsoft has said plans to keep Skype’s innovation and openness whilst further integrating it with Windows/Microsoft’s products. By end of 2013, Microsoft defunct their own Windows Live Messenger in favor of Skype.
PSTN and mobile network providers integration to VOIP

It is becoming increasingly common for telecommunications providers to use VoIP telephony over dedicated and public IP networks to connect switching centers and to interconnect with other telephony network providers; this is often referred to as “IP back-haul”.

Smartphones and Wi-Fi enabled mobile phones/tablets may have SIP clients built into the firmware or available as an application download. An example of such dialer in Canada is Fongo.

Corporate and Business utilization of VOIP
Because of the bandwidth efficiency and low costs that VoIP technology can provide, businesses are migrating from traditional copper-wire telephone systems to VoIP systems to reduce their monthly phone costs. In 2008, 80% of all new PBX lines installed internationally were VoIP.

VOIP Advantages
There are several advantages to using Voice over IP. The biggest single advantage VoIP has over standard telephone systems is cost. In addition, international calls using VoIP are usually very inexpensive. One other advantage, which will become much more ... ounced as VoIP use climbs, calls between VoIP users are usually free. Using services such as Skype, subscribers can call one another at no cost to either party. By the summer of 2010, the FCC reported there were over 20 millions VoIP customers in the United States; in Canada while the figures aren’t certain it’s estimated to be over 6 million subscribers. What many people don’t realize is that if they have a land-line from a cable operator most of the time that means is an IP based phone. A lot of Canadian users started to move their lines around 2005 when Rogers introduced their Home Phone service as a Home Phone alternative to Bell. In different provinces started to happen the same. In Quebec, the Home Phone alternative to Bell was Videotron (2004), in Alberta the home phone alternative to Telus is Shaw. Now all of them face new competition on the home phone and business phone services as many individuals and enterprises are moving to VoIP. Driven by costs savings and a rich feature set, with no strings attached service.

VOIP in Canada

There are approximate 15 Million landlines phones in Canada,  of which about 40% are using some form of Voice over IP technology. As mentioned above,  Canadian cable operators use a variation of theVoice Over IP technology called fixed VoIP or managed VoIP. The Cable Operators have in total 5,2M of phone lines in Canada. On the other hand, alternative VoIP or not big Telco providers account for 725,000 lines in Canada.  The variation used by alternative providers is often referred to as nomadic VoIP.  Traditional landlines in Canada have been decreasing at a 4% rate year over year; while VoIP lines are increasing annually at a 12% rate and this trend is will not see any decelerating. If anything over the next five years the trend will be faster. Driven by businesses of all sizes moving to Busines VoIP providers which in turn pushes the Home Phone providers renewal.