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Published May 2006

Why biz owners love
phone service via Internet

Dear BizBest: My business is growing, but our phone system is stuck in the dark ages. Since weíre considering a complete telephone overhaul, should we switch to Internet phone service? I hear itís cheaper and the technology has really improved. ó Phone Dead

Dear Phone Dead: The move you may want to make is to ďvoice over Internet protocol,Ē or VoIP, ó a system that lets you make and receive your phone calls via the Internet.

VoIP began as a curiosity a few years ago but is now going mainstream. But if you still havenít heard of it, donít worry. A recent Harris Interactive poll found that 87 percent of Americans still canít define VoIP, and 20 percent think itís a hybrid car from Europe, while 1-in-10 believe itís a low-carb vodka.

VoIP is gaining popularity among small-business owners for good reasons:

  • It costs less than conventional business phone service ó often a lot less. No more multiple phone lines or paying extra for features like conference calling. And no more paying for calls by the minute. Most VoIP service works on a flat monthly fee, so bills are more predictable. Plus, you can make calls from anywhere as if they were local. Forget roaming charges.
  • Itís less complex and easier to maintain. Your voice calls run over the same network you already use for e-mail and Web access. So instead of having to buy and maintain separate voice and data lines, you have just one system. And if you select a VoIP-hosted service, you wonít need any in-house equipment at all. If you add or move employees, just plug the IP phone into the data network.
  • It offers more advanced features. You can select area codes other than your own for your business number and receive calls or voicemail to your laptop or IP phone while traveling, as if you were at your desk. You wonít need a separate cell phone and number.

VoIP concerns
Using the Internet for phone calls isnít all roses. Audio quality still isnít perfect, but it is much better than a few years ago, when VoIP calls required both people to be at a computer.

Now you can make VoIP calls with regular phones or new, feature-rich, high-tech IP phones, and many users report no difference in quality. Depending on the number of employees you have, you might need additional bandwidth to handle VoIP.

Plan ahead if you intend to switch to VoIP. Find out if your current phone number can be switched to VoIP. You may want to keep a conventional phone line as a backup, and also to assure your business a listing in the local phone book. If power goes out, VoIP service can go down, so consider a power backup as well.

The lack of 911 emergency access through VoIP also has been a concern, though that, too, is disappearing as VoIP service providers find ways to add this feature.

VoIP resources
n Vonage is a leading VoIP provider. The firm has a $50-per-month Small Business Unlimited plan that includes calls to anywhere in the United States, Canada and Puerto Rico, along with voicemail, a dedicated fax line at no additional cost and many other features. Visit www.vonage.com or call 800-980-1455.

n Covad provides voice and data communications in 44 states. The company will review your current service and recommend the best upgrades. Visit www.covad.com or call 877-751-8393.

n Cisco Systems offers a full line of telecommunication products and services for small and midsize companies. Cisco Systems Capital also offers attractive leasing plans that can help you acquire the technology your business needs now, while still preserving your cash. Visit www.cisco.com.

n Other VoIP service providers to consider include: Quintum (www.quintum.com), Net2Phone (www.net2phone.com), Virtuoso Net Solutions (www.virtuosonetsolutions.com) and Intelecom Solutions (www.intelecomsolutions.com).

Daniel Kehrer (dan@bizbest.com) is founder of BizBest (www.bizbest.com), which publishes ďThe 100 Best Resources for Small Business.Ē

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