The history of VOIP and internet telephony

If you’ve ever made a call over the Internet, then you’ve used VoIP — which stands for Voice over Internet Protocol. VoIP technology is widely used and has drastically improved the way we communicate today. This extremely valuable technology has humble beginnings that revolutionized telecommunications.

Read on to learn more about the history and benefits of VoIP.

What we will cover:

What is VoIP?
The Humble Beginnings of VoIP
How VoIP works
Here’s How VoIP Was Created
The Rising Popularity of VoIP
VoIP Today
Why Your Business Needs VoIP

What is VoIP

In simple terms, VoIP converts a traditional voice signal into a digital signal that travels through the Internet. VoIP technology uses packet-switched protocols, meaning it transmits the caller and the receiver’s network addresses and voice signals into packets.

One of the biggest advantages of choosing VoIP over a traditional legacy network is that VoIP offers companies the ease of integrating their phone and data services under their existing network.

The VoIP systems of today use a traditional telephone line hooked up to an Internet connection allowing users to call any telephone number.

The humble beginning of VoIP

Before getting into how VoIP started, it is important to acknowledge two fundamental technologies that came first: the telephone and the Internet.

The first telephone call was on March 10, 1876 by the gadget’s inventor Alexander Graham Bell. Fast forward 100 years to 1976, and the cost associated with making a long distance call was still an extremely expensive commodity. That’s because traditional telephone systems were run through costly analogue networks. It was the development of the Internet that truly revolutionised the scope of communications. Experts at the time accurately predicted how computers and the Internet would, more than any of its predecessors, set the stage for global integration capability and the mass dissemination of information.

The concept of using your computer to make voice calls first originated in the early 1990s when hobbyists began tinkering around with the idea as a way for PC users to avoid expensive long distance telephone calls.

In the early years of VoIP technology, both callers were required to have a computer equipped with the same software, a sound card and a microphone. These VoIP applications were also riddled with a variety of problems including poor audio quality and connectivity issues. Still, this moment opened the doors of promise, with small players and big brands researching and investing on ways to use VoIP technology to enhance business communications.

The major breakthrough in the world of VoIP began in 1995 when major hardware manufacturers started developing functionalities that previously had to be handled by a computer’s CPU. One primary example is the act of “switching,” which is the process of changing a voice data packet into something that could be read by the telephone network and vice versa. Once this function was able to be replicated using external devices, VoIP hardware became less computer dependent and more affordable. This opened the door for larger companies to implement VoIP on their internal IP networks.

How VoIP Works

VoIP offers an alternative to the electrical signal sent by traditional phone lines, and instead creates a digital signal that can be sent online.

In a nutshell, VoIP takes an analog voice call and transmits it over a digital network. Commonly referred to as IP telephony (IPT), VoIP eliminates the need for a traditional analog phone line and has become second nature in business today. While the Internet isn’t always necessary when it comes to using VoIP, the technology utilizes the same protocols or rules that the Internet uses to communicate.

To keep things simple, think of VoIP as a sophisticated version of the technology you use to record a voice memo on your computer. When you record a voice on the computer it sends a limited frequency range and uses simple CODECs to convert analog signals to digital audio. The computer might also compress the voice file so it takes up less space.

For VoIP, the process is the same, but the CODECs are more sophisticated, compressing the file for bandwidth.

After the audio is recorded by the computer, the audio samples are collected into groups and placed into data packets for transmission over the IP Network.

According to VoIP experts, a single data packet contains ten or more milliseconds of audio, with 20 and 30 milliseconds being the most common.

Here's how VoIP was created

The man responsible for transforming the telecommunications industry through the creation of VoIP technology is Israeli businessman Alon Cohen. In 1989, Cohen founded VocalTec Inc. He would later invent the audio transceiver that laid the framework to make VoIP possible.

VocalTec is hailed as the pioneer of VoIP after launching the world’s first VoIP commercial application in 1996.

“You could just download it; you didn’t need to buy any hardware,” Cohen explained.

“Then suddenly it all became clear. All the technologies we created initially, to deal with packet loss and jitter, all that was needed to make this work. Without these, it would not work at all.”

The clunkiness, however, of the early VoiP technology restricted its widespread use. Communicating with users that received service from other providers or using traditional phone lines was a major drawback.

Imagine today having a cell phone where you could only make calls to people who have the same provider as you. Want to call you doctor on a landline? Not possible. Want to reach a contact who uses a different provider? You can’t do that either.

When you think of early VoIP in those terms and apply it to your business, the inconvenience of the service is glaring.

With international calls, costs and labour also greatly increased.

If, for instance, you were located in the United Kingdom and you wanted to use a VoIP provider to connect calls between the United Kingdom and the United States, the provider would be required to set up and maintain hardware in both markets.

The Rising Popularity of VoIP

Over the past 20 years, VoIP has evolved from being a technological luxury to becoming a vital role in business.

Here are some of the factors that contributed to VoIP’s rise to the top of business communications:

1. No Landline
There is no requirement for a business to have a landline. While landlines restrict call centres to one location, the pricing and accessibility of a VoIP system dominates over the conventional method in every aspect.

2. Free Long Distance Calls
When it comes to large companies, international calls can eat into a large portion of the spending budget. VoIP is much more cost effective and long distance and international calls are either extremely low-priced or even free depending on your VoIP service.

3. Always Connected
For the past decade remote work has been on the rise for many reasons. First, technology like VoIP has made it easier for remote workers to feel connected. Remote work also is proven to increase productivity and decrease overall costs.

4. VoIP Call Routing
There are an array of services offered through VoIP phone providers that you would not receive with a traditional phone service. One of the most popular features is call routing. With call routing enabled, the incoming call will be transferred to several numbers before going to your voicemail for instance the office or your cell phone.

5. Mainstream Adaptation of VoIP
In its early surveys about technology use in 2000, the Pew Research Center’s Internet Project found about half of American adults used the internet, with only a tenth of those internet users placed phone calls using the internet. In 2012, when over 80% of Americans were internet users, the Project found that 30% of them had placed online phone calls.

6. Call Monitoring
VoIP also makes call monitoring extremely easy. This allows companies to monitor inbound and outbound calls for the specific purpose of checking the standard of employees handling of calls. This essentially helps you understand how your business is performing in its customer service or sales calls versus your ideal criteria for these calls.

VoIP today

When it comes to VoIP today, it’s current growth can best be compared to the Internet boom of the early 1990s. As savvy business owners learn more about the many advantages of using in their business, VoIP technology is providing more innovative service for a more cost efficient price.

The ultimate goal in any major business is to provide a product or service to a customer. That’s why successful companies are constantly striving to improve working to seek out all of the technological resources available to ensure superior client interaction. With its various features, a standard VoIP can play a key role in training, evaluations, and making improvements in overall customer service.

The Future of VoIP

The rise in hacking and new developments in blockchain technology has made security a priority for VoIP companies. This will continue in the future of VoIP, adapting to new technologies and anticipating the needs of the client.

The fifth-generation of mobile technology known as 5G technology is expected to cater to the demand and business frameworks needed by and beyond 2020. VoIP providers are already researching ways to integrate this technology.

With remote working on the rise in the UK, 5G will be a game-changer.

Why your Business needs VoIP

As previously mentioned, VoIP has numerous benefits which are frequently causing businesses of all sizes to switch to this technology.

Here are a few of the top reasons companies are switching to VoIP.

1. Easy Expansion
If your company has a clear projection of future growth but doesn’t want to forfeit the budget for a major telephone installation in the present, VoIP is an excellent investment. VoIP’s plug-and-play capabilities make it perfect for increasing the amount of telephones in your office. VoIP allows for the scaling of handsets to suit the present requirements alone.

2. Improved Call Quality
You need a decent, reliable internet connection to get calls through on VoIP. But, the more basic your connection, the lower the quality of your calls will be. If you want to start increasing your call quality, you need to look at increasing the quality of your internet connection.

Simply put; the better your data connection, the better your calls will be. A higher-speed connection will result in a clearer line.

So, what is the best data connection for VoIP? Ethernet probably takes this one. This is because Ethernet is notoriously reliable. The bandwidth is not contended, which makes the connection ultra-fast. When you are transferring voice packets, you definitely want speed and reliability on your side.

3. Built in Backup Plan
Another definite benefit of VoIP is that its plug-and-play simplicity gives your business some welcome peace of mind. VoIP systems have automatic detection, allowing for any issues in the system to be discovered immediately.

Plus, with the ability to easily re-route calls, you can rest assured that your business numbers will always be reachable – even in a crisis.

Looking to find out if VoIP technology is right for you? Here are some questions to ask yourself: