Six Reasons To Avoid VoIP

Despite all the marketing hype from Voice-over-Internet-Protocol providers and the trend away from traditional phone services to the IP-based technology, VoIP isn't necessarily the right choice for all companies.

"It's much better than the original IP of five or 10 years ago, but VoIP is still a new technology, so it still has some problems; though they're getting to be fewer," says independent, Atlanta-based telecommunications analyst Jeff Kagan. "In 10 years all [telecommunications] will be VoIP, but right now most of the installations are a combination of VoIP and traditional phone service. I don't know that you'll ever get to a point where you want to drop a traditional phone service."

Though this could change in the next few years, traditional phone systems are still the right choice for certain companies or for certain situations, according to Kagan. He says that companies in the following six situations should still choose traditional phone service over VoIP or at least in combination with VoIP:

Voice quality and reliability are mission critical: While voice communications are critical to all businesses, losing an occasional phone call or having poor voice quality due to problems with a data line is more of a problem with some businesses than with others. As important as computers have become in many organizations, the telecommunications is still the primary business technology, according to Kagan.

It may not matter that a telemarketer selling magazine subscriptions loses a call or two, but a sales person with high-margin clients may not have that luxury. Similarly a medical clinic shouldn't be dropping calls regarding critical procedures. Though traditional phone calls get dropped or lost as well, in most instances, they have better reliability and better quality than most of many VoIP calls."You have to decide at what point good quality takes precedence over the lower cost," Kagan says. "Just like a traditional phone line, when it doesn't work, it's a nightmare. If all a company sells are services and the telephone [VoIP or traditional] doesn't work, then there are going to be problems."

The quality of VoIP differs from market to market, from service to service and sometimes from day to day. The VoIP services offered by cable companies or through phone companies tends to be better than that offered by many of the VoIP start-ups (Vonage, 8x8, etc.), but in some of the more mature markets, there's no noticeable difference between a traditional phone call and a VoIP call, Kagan says.

Power or high-speed Internet connections are unreliable: If outages of power or high-speed Internet connections occur frequently, a traditional phone system may be more reliable. Traditional phone systems still use lines that are separate from electric power lines. So a power outage doesn't mean the phone is out as well. Loss of high-speed Internet also means loss of VoIP capability.

Backup generators can help in the event of a power loss, but the enterprise needs to determine if it's better off using backup power for computers and other systems that don't have any separate source of power, like a traditional phone line.

The enterprise needs features VoIP doesn't provide: The most notable of these today is E-911. The emergency phone service is starting to become available in some markets, but still isn't offered in many others. While many of the VoIP offerings boast extra features (e.g., caller ID) at no additional charge, some don't offer all of the additional features of a traditional phone system.

High-speed Internet isn't available: VoIP doesn't work over dial-up. Though the availability of broadband is growing rapidly, it's still not available in many areas of the country. Cable copies are offering VoIP service in an increasing number of markets, but have yet to extend the service to mid-size and smaller cities."They're going into the largest markets, where they can make the most money, first, then expanding from there," Kagan says.

High-speed Internet usage near capacity: Even if broadband is available to the enterprise, the firm may have maxed out its usage, particularly if it's doing a lot of streaming video or has other bandwidth-cannibalizing applications. This might be able to be solved by upgrading transmission speeds, but this option isn't always available, as mentioned above.

Capital costs: While VoIP promises to save money over traditional phone services, those savings occur over several months as enterprises and individuals avoid the per-minute phone line charges and additional fees for additional features. However, a building may not be wired for high-speed Internet but may already have a telephone connection. The opposite – being wired for high-speed Internet but no phone service – is highly unlikely.

IP-based systems (PBX, etc.) tend to cost more initially than the same systems for traditional phone systems, though they offer computer-based functionality and promise easier installation than their older counterparts. So initial vs. long-term costs is a consideration. A company may not have the capital to make the investment in a VoIP system, but may have the funds to pay the monthly traditional telephone bills. It may also want to delay VoIP installation until some of the other issues with the technology are resolved.