Voice over IP (VoIP) telephony Research Paper Example | Topics and Well Written Essays - 1250 words

Voice over IP (VoIP) telephony - Research Paper Example In simple words it can be said that using VoIP applications a caller will be able to avoid paying long distance international call charges and also save expensive telecommunication hardware and infrastructure (Hallock, 2004, pp.5-8). The principles of VoIP are similar to traditional digital telephony in that the former also involves channel setup, signaling, conversion of analog voice signals into digital signals, encoding and decoding. The difference with traditional digitized telephony is that the encoded VoIP digital signals are transmitted over packet-switched networks as Internet Protocol or IP packets instead of being transmitted over circuit-switch network. This concept of packet-switched data transfer is based on the principles of time-division multiplexing networks. The early business service provider models of VoIP were based on traditional telephonic networking only with difference on how the data would transfer across channels. The second generation providers of VoIP incl uded the concept of closed networks for enabling private communication between secured user bases. The Skype is one of the most popular second generation VoIP service providers whose technology offers their users free calls. But the business model of Skype charges connection or access charges to customers to use private networks or public switched telephone networks (PSTN). The advantage of such model is that user’s requirements for hardware or software compatibility would be minimized and independent. The third generation of VoIP, mainly popularized by Google Talk, allows dynamic interconnection between any two user domains on the internet (Bianco, 2006, pp.365-367). Analysis of Existing Applications and Market Trends The main reason for the growth of VoIP over the years is due to its popularity as a business data networks application. With the application of VoIP a business enterprise will be able to reduce its service and hardware costs by increasing productivity through c ustomized telephony applications. VoIP technology ensures secured and consolidated telecommunication network for business enterprises. As the prices of bandwidth are falling, the internet telephony is increasingly becoming popular and more accessible to global customers. With the help of VoIP business critical information could now be telecommunicated without any significant delays (which were more prominent in traditional international telecommunications) and hence increasing the efficiency of the company. Thus, one of the major reasons for quick acceptance of VoIP was cost efficiency that the companies could realize from the implementation (Bergstrom, 2004, pp.17-18). (Source: Tele Geography Research, 2008) The traditional telephone lines are replacing the medium of communication between business enterprises as well as households. A research has found that only the North American residential VoIP services has grown over 31% CAGR (compounded annual growth rate) and it was a $1.25 b illion VoIP service industry in the year 2005. (Source: Word Press, 2011) The main drivers for the tremendous growth of VoIP can be attributed to some important VoIP characteristics including cost savings, reliability and easier functionality. SWOT Analysis The VoIP technology allows customers to make