next week, page-7

LIKE a recalcitrant child, voice over internet protocol technology appeared on the scene in the late 1990s, threatening to turn the telecommunications industry on its head.

Maturing: After difficult beginnings, VoIP is growing into a telephony winner offering the prospect of cheap, voice calls, it captured the attention of budget-conscious early adopters.

It seemed that the days of high phone bills and massive carrier profits were over.

Then, with excitement rising, a dose of reality took hold.

Users discovered that the call quality offered by some VoIP services left a bit to be desired.

During periods of peak internet activity, they experienced dropped calls and jittery voices.

Sometimes calls would not connect at all.

Users found the services were fine for chatting to friends and family but not suitable for business use.

It seemed the VoIP revolution was muffled from the start.

For small and medium businesses that have rolled out an internal IP-based office network, taking advantage of VoIP for external phone calls is easy.

By routing calls over an office IP-based PBX to a VoIP service provider, cost savings can be achieved.

There are advantages when it comes to incoming calls as well.

A small business can establish local dial-in numbers in each state, have all the calls routed to an office anywhere in the country, and avoid paying long-distance rates.

Ilka Tales, chief executive of VoIP service provider Engin, says call quality has improved since the technology first appeared on the market.

His company has invested in upgrading its internal systems and improved the way call traffic is handled.

Engin has also arranged peering relationships with major Australian internet service providers.

Peering means that traffic moves directly from Engin to the ISP's own network.

"We peer with most of the larger ISPs, which keeps the VoIP traffic off the general internet," Tales says.

"In fact most voice calls are not travelling over the public internet, which has been people's perception until now.

"Engin began its peering relationships in January and Tales says some 97 per cent of customer calls now do not have to use the internet at all.

"This approach allows us to remove one of two network hops for each call," he says.

"This translates into savings of between 10 and 15 milliseconds, which gives an improvement in call quality.

"Steve Picton, chief executive of Telecorp, which operates the GOtalk VoIP service, says users must take into account the speed of the broadband connection over which their VoIP traffic will travel, as this has a big bearing on the quality of the service.

"You need a minimum speed of 512Kbps, because without that everything else becomes pretty academic," Picton says.

"People on slower connections are going to strike problems.

"Picton is convinced VoIP is rapidly becoming a mainstream tool for business, however.

As complexity is removed and quality improves, the reasons for not using the technology are rapidly disappearing.

"Within two years, people will not even be using the term VoIP," he says.

"It will just be seen as the natural way to make fixed-line phone calls.

"As well as improving call quality, VoIP is becoming more flexible to use.

Rather than being tied to a computer or wired broadband connection, those seeking cheaper phone calls can now go mobile.

This trend is being aided by a growing battle between mobile phone carriers for data customers.

Mobile VoIP has also been given a push by handset giant Nokia releasing a couple of models that incorporate Wi-Fi capabilities.

By using the handset's Wi-Fi link to make calls rather than sending them over the carrier network, big savings are possible.

Working in partnership with Engin, Nokia has released its N80 and N95 handsets, which are designed to make such calls straightforward.

The handsets can be configured to detect and connect to a home or office Wi-Fi network automatically.

When the user is out and about, calls are made in the traditional way over the carrier's mobile network.

When the phone detects that it is within range of the Wi-Fi network, however, calls are automatically made on the Engin VoIP service.

The phones can even be configured to use public Wi-Fi hotspots.

"Studies show that 45 to 55 per cent of calls on mobile handsets occur when you're at home or in the office," Engin's Tales says.

"Having the ability to connect via Wi-Fi means you can save substantial amounts on your mobile phone bills. "

Tales points to initiatives by a growing number of councils and governments to roll out city-wide Wi-Fi networks as another example of how the technology will become even more useful.

Eventually it might be possible to avoid the mobile networks altogether and place all calls over hotspots using VoIP.

In the wired world, VoIP service providers are also winning the hearts and minds of business users.

Although designed mainly for consumers, services such as Google Talk are being used by travelling business people to stay in touch with the office and home.

As with Skype, users download a small software program to their PC, and voice calls can be made and received for free when the computer is connected to the internet.

As quality continues to improve and innovations such Wi-Fi calling become more widespread, the march of VoIP will continue to gather pace.

While its start may have been marred by poor call quality and patchy performance, the future is looking strong and cheap.