Technology Survey

Internet Telephony and VoIP

by Brendan Ryan, Louise Harte, Mary Howlett and Richard Howlett

Overview of Internet Telephony

At present telephony predominantly remains the main source of inter-business consultations, and is widely considered a fundamental component in the on going growth of effective customer service. The Internet today is changing every industry, with telephony being no exception. Traditional telephony is now being accompanied by IP based telephony in order to primarily reduce the cost of telecommunications and effectively provide more communication options. Indeed Internet Telephony has evolved to become a key platform for realizing the long promised benefits of voice/data convergence and the merging of the PSTN (Public Switched Telephone Network) with the Internet. Internet Telephony (Voice over IP) essentially means a voice message transmitted using the Internet Protocol. It is a term used in IP telephony for a set of facilities for managing the delivery of voice information using the Internet Protocol. Basically this means sending voice information in digital form in discrete packets as opposed to the traditional circuit-committed protocols of the public switched telephone network.

Interconnection of Internet and PSTN
Interconnection of Internet and PSTN


Originally the PSTN was used for voice communication. Over the years however the data traffic used in the telephone system has encountered a notable increase. By the turn of the new millennium it was estimated that data traffic had overtaken its voice counterpart, suddenly many operators became highly interested in transmitting voice over their data networks. Gone was the need for additional mediums to carry voice, which led to many companies embarking on a novel means of making a lot of money. Thus voice over the Internet came into being.

Protocol Standards


In order to incorporate the idea of voice over the Internet into the real world, many people stumbled upon the realisation that a new set of standards was paramount to this much needed change. The International Telecommunications Union (ITU) recommended using a new standard known as H.323. Unlike most protocols, H.323 is more of an architectural overview of the Internet, using many of its existing protocols in use today, in the implementation of functions such as call setup and transportation of data. It fundamentally uses a gateway connecting the Internet to the telephone Network, whilst using both the PSTN and H.323 protocols. Terminals are free to communicate with one another provided they are within a specified zone (controlled by a gatekeeper) of the Local Area Network. H.323 systems must be able to support many other protocols such as G.711, H.245, and Q.931. These protocols provide the functionality required to carry out a session between two terminals, such as encoding and decoding speech and establishing a path of communication between two end users

SIP-Session Initiation Protocol

Many people began to feel that a new standard needed to be devised in order to overcome the complexities of H.323 and represent voice over IP in a more modular fashion. The result led to the application layer protocol SIP (Session Initiation Protocol). This is a single module protocol whose beauty lies in the fact that it can also work extremely efficiently with existing Internet applications. SIP's functionality ranges from ordinary telephone calls to multicast operations and indeed to multiparty telephony sessions. SIP puts forward an abundance of services with sessions that contain audio, data and even video. SIP also makes effective use of other existing protocols such as UDP (User Datagram Protocol), TCP (Transport Control Protocol) and RTCP (Real-Time Transport Control Protocol).

Components of Internet Telephony
Components of Internet Telephony

Evaluation of Protocols

The two protocols previously discussed are similar and different in various aspects. H.323 and SIP allow multiparty connections between two users, support encryption, parameter negotiation and Real-Time Transfer Protocols. H.323 is a typical telephone standard and is generally incompatible with the Internet, however it is the most broadly used protocol with regard voice over IP. It is basically a massive architectural protocol containing strict criteria specifying what can and cannot be done. Each layer is well defined but unfortunately it may not be hugely successful in conjunction with adaptation to future applications. In contrast SIP is highly compatible with the existing Internet, always making necessary use of protocols in existence. However it is a lightweight module and is merely used for setup. Despite this, SIP is still quite flexible and could be used in adaptation with up and coming ideas and influences which may encourage this as a preferred choice for future applications.

Critical Analysis of Internet Telephony


The best selling point in Internet telephony is its cost effectiveness. Since Internet access is readily available, the cost of the telephone service becomes minimal. The long distance fees can be reduced significantly by trading-off the sound quality. The integration of data network and voice can also reduce the number of lines needed to access both services. Besides, the fact that there exist a large number of vendors competing for this potential market will also result in a minimal feasible price. Since modern compression technology is used to compress the voice signals, the bandwidth can be reduced to many times smaller than that of a normal voice call. This reduces the bandwidth requirement and can use the existing bandwidth more efficiently (conflicting opposing views discussed in section below). Thus more voice calls can be handled on a line as opposed to the traditional circuit switching network, enabling long distance capacity to be increased with much lower cost. Since voice and data can now share the same transfer channel, they can be combined, hence providing real-time applications such as interactive meetings, long-distance learning, and white-boarding. Multimedia applications can now be incorporated into commercial service more readily. Digital technology is highly flexible with additional features integrating themselves into Internet Telephony, for example combining email boxes and voice messages provides ongoing convenience and flexibility for its end users.

Internet Telephony


The main advantage of Internet Telephony as opposed to using an ordinary phone is that calls are less expensive. On the other hand, even though Internet Telephony is rapidly progressing, it still has some major issues with reliability and indeed sound quality to battle. These problems are primarily attributed to bandwidth limitation and current compression technology. Most companies fail to mention the limited bandwidth under which most systems operate. They piggyback on top of TCP/IP which does not contain any way of specifying a bandwidth requirement, which leaves you the problem of a data drop out. If this gets severe enough, it quickly becomes impossible to hold any conversation, and the user will be forced to disconnect from the network and try to re-establish a connection when the Internet traffic load has reduced significantly. This problem naturally makes it expensive to use, with most companies wishing to reduce expenses by opting to confine their Internet Telephony applications to the Intranet. The Intranet supplies them with more bandwidth and provides for the support of full-duplex real-time voice communications. Users are enabled to make point to point calls via gateway servers attached to the local area network. With no PC-based Telephony software being required this makes it much more appealing.

The Current Impact of VoIP

As mentioned, VoIP is being deployed on internal corporate Networks for low cost, and in many cases, low quality international calls. But to what extent is this happening and what has VoIP's impact on the telephony market been?

Many big name vendors such as Microsoft, Cisco and Erricson are supporting and implementing SIP as their VoIP protocol. And in terms of service providers, there are a huge number of companies (400 alone in the US) offering VoIP as an alternative to the traditional telephony service [6].

Companies such as Vonage, AT&T and Verizon are all trying to get a stake in the market. Home customers to date have being trading the quality of telephone calls against the cheaper price offered by these providers. Other benifits besides cheaper calls is the introduction of IP telephones and VoIP boxes which means the user can have the same experience as normal telephoning. This means one does not need a headset, microphone etc to make Internet Telephony calls and can make phone to phone calls using IP. But in terms of actual penetration to date, the impact on the market has been more subdued than predicted. When trying to obtain hard and up to date facts about the current state of play it is difficult not to run into figures which primarily focus on the predicted impact VoIP will have. Take for example,

"Market research firm The Yankee Group predicts that 17.5 million US Residents will rely on VoIP by the end of 2008" [7]

The reality is however, only just over 1 million US residents have actually dropped their traditional phone line for one that uses voice over Internet Protocol [7]. Providers and experts alike are it certainly seems expecting an explosion in the number of people using VoIP.

Key to that expectation becoming a reality is dispelling some of the myths that have become synonymous with VoIP. These myths confuse and discourage the consumer from accepting a fantastic new technololgy. Worries about the opportunity for others to 'listen in' on or 'intercept' calls do nothing for consumer confidence. And the reputation that the quality of VoIP can never be as good as the PSTN network also causes damage to the cause. The reality is that in a dedicated network VoIP can offer even better quality Voice calls than normal telephony, and there are many software and hardware solutions offering encryption available.

Between 1998 and 2003, VoIP's share of international traffic rose from 0.2 percent to 13 percent of telephone traffic worldwide, an average annual increase of 177 percent, according to a study by Washington-based international research firm TeleGeography [8].

International VoIP and PSTN Traffic Summary, 1998 - 2003
  1998 1999 2000 2001 2002 2003 CAGR
VoIP Traffic              
(millions of minutes) 150 1,655 5,954 10,147 18,045 24,519 177%
PSTN Traffic              
(millions of minutes) 93,000 108,000 132,027 146,095 155,165 166,615 12%
VoIP Share of International Traffic 0.2% 1.5% 4.3% 6.5% 10.4% 12.8%  
From: TeleGeography 2004
Source: PriMetrica, Inc.

Outside of residential or home use, a large number of companies and Universities are changing over to VoIP. Aerospace giant Boeing, which has some 157,000 employees and offices in 70 countries, announced it would use VoIP to handle all phone calls within the company [9], and now over 8% of British call centre companies soley use VoIP [10].

Schools and universities have also started deploying VoIP, often giving the students an IP phone to use. The University of Notre Dame has signed a multimillion-dollar contract for a hosted voice-over-IP system to serve around 16,000 students, faculty, and staff and the University of California Santa Barbara now use voice over IP technology on their campus [11] along with many other universities throughout America. If this trend continues it won't be long until most schools and universities around the world take advantage of this technology.

Overall, in the corporate world, VoIP has not experienced the explosion many forecasters predicted. The graph below does however show the trend leading towards a steady growth for VoIP. The next section surveys the future of VoIP

European Corporate Voice Traffic Trends

The Future of Internet Telephony and VoIP

Future help:

It is not just the promises that VoIP hold, such as low cost, that are helping to support the debate that it will have a bright future but the actual efforts being made by many to encourage internet telephony and VoIP.

The European Commission, ITU World Telecommunications Policy Forum ("WTPF"), and the U.S. Federal Communications Commission ("FCC"), have had much debate on what VoIP and VoN services should offer and the implications of these services. Their introduction poses issues such as the collection of universal service funds, the payment charges among carriers and the impact on the revenue of existing monopolies.

To the advantage of VoIP and VoN it has been decided that IP telephony will not be subject to the same regulations as the traditional telephone service. The implications of VoIP are regarded as a good thing as they will reduce the costs for consumers, and the costs of market entry for operators, especially for long-distance and international calls, and it has made them see that existing telecommunications regulations need to be reassessed. Both the EU and FCC agree that the development of IP telephony technology should not be hindered in any way.

Internet service providers (ISP) are making the decision to become voice over IP service providers and join those who are already in the market such as with BT, Qwest and Vonage. This is definitely a big plus for the growth of VoIP into the future for several reasons. ISPs already have their own IP networks to build the voice services and they are already experienced in working with IP and routing traffic. They are also in a position to offer additional services to their customers. For example they could offer free VoIP-to-VoIP calls to their customers and it will mean customers will have a single bill instead of receiving many for all the different services they use. This would make VoIP more attractive to even more customers, keeping VoIP's foot in the future.

Wireless WiFi

With all the advantages and advances in VoIP, it seems logical that the next step for it is to bring it to the wireless world. Wireless VoIP theoretically has many advantages, including reduced cost for calls and higher-bandwidth data transfers compared to a traditional cellular connection. WiFi networks cost much less then what it cost to deploy a traditional cell tower, and it can be done much quicker because a detailed site review is not needed. Theoretically, wireless VoIP would actually improve call quality - especially in residential and built-up areas or office towers where mobile network coverage is not as reliable. Wireless VoIP would mean that customers would have a single device for communication, unlike at present where we have a mobile, home phone and office handsets etc. It would also mean that employees could download software to their devices to allow them to, for example, log onto the companies intranet or track goods etc. Customers would also be able to download videos, movies etc. to their device or even have videoconferences with their friends and family.

Future Problems:

There are a number of problems that VoIP and VoN have to face, however, if they want to be able to make it in the future. Security is obviously a major factor that has to be addressed. All the security problems we have faced with the internet would have to be faced again with VoIP. If it becomes more widely used it will become more attractive for hackers to attack Hackers could eavesdrop on conversations, interfere with audio streams, or disconnect, reroute or even answer other people's phone calls.

They could also launch distributed denial of service attacks, which congest the network with illegitimate traffic. If this happened the network would become useless and would not be able to be fixed without regular telephones. The problems we have had with spam will arise again in the form of "spit" (spam over internet telephony). Sending out telemarketing voicemail messages would be just as simple as sending blanket e-mails. This would not only be annoying for the custommer but would put a huge strain and the service.

Solutions to all these problems, including those mentioned in the dissadvantages section above, for example sound quality, will have to be found if Internet telephony and voice over IP is to be a success.


We chose this topic because none of the group had previously been familiar with this technology. The group is confident that we have covered sufficient material to give the reader a comprehensive overview of the stated topic. We hope you enjoyed learning about Internet Telephony and VoIP as much as we did. We are sure that Internet Telephony will soon become an integral cog in the communication sector and that its future is bright. In its journey it has been presented with various drawbacks but it is fair to conclude that its ongoing advantages greatly outweigh its disadvantages that could be passed off as menial.


  1. Andrew S. Tanenbaum, Computer Networks Fourth Edition, Prentice Hall PTR
  2. Fred Halsall, Data Communications, Computer Networks and Open Systems Fourth Edition,
    Addison-Wesley 1995
  3. "InfoTalk Voice Over IP",

    (20 Feb 2005)
  4. "What is Internet Telephony?",

    (20 Feb 2005)
  5. http://www.learnthenet.com/english/gifs/telephon.gif
    (20 Feb 2005)
  6. "The VoIP's Service Providers List",
  7. "VoIP predictions",
  8. "TeleGeography Research - VoIP Traffic Grew 80%" ,
  9. "Boeing endorses VoIP",
  10. "8% of UK call centers use nothing but VOIP",
  11. "US Universities and VOIP",