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Technology: Internet Phone Service –Good and Cheap and Here to Stay

What's New in Technology

July 2007

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Technology: Internet Phone Service –Good and Cheap and Here to Stay

A real asset to small businesses, Internet phone service has proved to be both inexpensive and efficient. Despite the legal matters involving patent infringement hanging over Vonage, who first introduced the technology behind Voice-over-Internet protocol (VoIP) to business owners and consumers, there are plenty of other options. This is good news for the many small business owners who have become enthusiastic proponents of VoIP. If you don’t already use Internet phone service and are considering it, here are a few of its advantages:

    • Internet phone service is cheap because it requires no expensive network equipment, and can share other Internet applications like email.

 

    • Internet phone service is here to stay. Voice quality, which sometimes used to be an issue in the pioneering days, is now close to the caliber of analog service.

 

    • In addition to substantial savings, Internet phone service also provides small businesses with services that previously were available only to large companies. These services include handy options like call forwarding, “follow-me” functions that allow calls to be automatically forwarded to other numbers at certain times of the day, and “do not disturb” features.

 

  • For subscribers who want to know ahead of time what their monthly bill will be, most Internet phone service providers offer a fixed monthly fee for all U.S. calls. Check rates for international calls which usually are very reasonable .

There are three options for those who want to take advantage of the cost savings:

    1. The method that Vonage pioneered involves a special converter that is attached to a traditional analog phone. The converter is a box about six by four inches and has a power cable plus a network cable. For one or two business lines, the converter is usually provided free-of-charge with a one-year contract. Prices range from around $50 a month to an annual fee of $200. The big phone companies including Verizon (Voice-Wing for Business) and AT&T (Call Vantage) offer service, as do most of the cable companies.



    1. Another option requires a computer and a special headset to make and receive calls. The PC runs the software and must be connected to the Internet in order to transmit or receive calls. Skype for Business services offers a PC-based service geared towards businesses. Yahoo, Microsoft Messenger and America Online offer voice options but these are more appropriate for sole proprietor business or individual consumers.



  1. The final option is most appropriate for larger businesses with 25 or more phones in their office. This option requires more investment in equipment: Internet phone-switching equipment (IP-PBX), special digital phones and high speed Internet connections. With this option, it pays to use a technical expert with expertise in VoIP to assess viability and determine if existing data networks and systems are compatible with VoIP technology.

Once the latest thing in telephony, Internet phone service has evolved and is now a well established option for consumers and businesses. Some industry experts expect it to become the telephony option of choice for business in the near future.

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These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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