Introduction:
Companies and organizations around the world are deeming it necessary to reduce the rising communication costs. Today, when the consolidation of separate voice and data networks is no more an alien concept, there appears to be an opportunity for significant reduction in communication costs. Accordingly, the challenge of integrating voice and data networks is becoming an important priority for network managers. Since data traffic is growing much faster than telephone traffic, a need has been identified to transport voice over data networks, as opposed to the transmission of data over voice networks. This has led to a growing popularity for Voice over IP (Slater, 2001).

Although voice over IP (VoIP) has been in existence for many years, it is only recently that it has begun to take off as a feasible and practical alternative to traditional public switched telephone networks (PSTN). Interest and acceptance has been driven by the attractive cost efficiencies that organizations can achieve by leveraging a single IP network to support both data and voice. But cost can never be the only consideration: cost alone is not enough to complete the evolution; service and feature parity is also very important. Customers will not accept voice quality or service that is inferior to what they are used to with a PSTN and, until now, VoIP fell short in delivery (Voice over IP (b)).

VoIP:

Today, VoIP’s appeal has risen primarily due to the low-cost, flat rate pricing of the public Internet. VoIP allows people to make telephone calls using a computer network, over a data network like the Internet. The technology converts the voice signal from the telephone into a digital signal that travels over the internet then converts it back at the other end so it becomes possible to speak to anyone with a regular phone number. VoIP may also allow the making of calls directly from a computer using a conventional telephone.
However, in order for VoIP to be successful, many components will have to be designed to accommodate these networks, such as the access gateways that link the data and the telephony networks among others. Applications that offer Voice over IP services will have to include a comprehensive technology set that reduces the impairments caused by sending voice over data networks that were not equipped to handle it. Quality of Service needs to be considered by network designers as an important factor. A Voice over IP application meets the challenges of combining legacy voice networks by allowing both voice and signaling information to be transported over IP (Slater, 2001).

Typically there are three styles of Voice over IP calls. VoIP calls can be placed either from PC to PC, or it could be from a PC to phone or from phone to phone. The principal components required for the process are the gateways, which adapt traditional telephony to the Internet. A call connects from the local public switched telephone network (PSTN) to the nearest gateway server, which in turn digitizes the analog voice signal via pulse code modulation, then compresses it into IP packets, and transmits it onto the Internet for transport to a gateway at the receiving end (Dunne, 2001).

Advantages of VoIP:
One of the main reasons and probably the most significant interest in the race to send voice over IP is the cost advantage that this process offers organizations due to the flat rate, low cost of Internet traffic. Generally the benefits of technology can be divided into three categories:

Cost reduction: For long distance communication, reducing telephone costs is always a popular topic and provides a good reason to introduce VoIP, but the actual savings over a long term are still under analysis and debate. These savings from lower prices are however, based on avoiding telephony access charges and settlement fees, rather than actually reducing resource costs. Economies of scale are also created via VoIP as the sharing of equipment and operations costs across both data and voice users can also improve network efficiency, since excess bandwidth on one network can be used by the other (Wright, 2001).

Simplification: It is common knowledge that through the use of VoIP, an integrated infrastructure comes into being that supports all forms of communication. This allows more standardization and reduces the total equipment complement. The economies of putting all forms of traffic over an IP based network will attract companies towards this option, simply because IP will act as the binding factor regardless of the underlying architecture. This combined infrastructure can support dynamic bandwidth optimization and a fault tolerant design (Wright, 2001).

Consolidation: People are the most significant cost elements in a network, so any opportunity to combine operations and eliminate points of failure and to consolidate accounting systems would definitely be a plus point. In the enterprise, SNMP based management with the appropriate MIB structures can be provided for both voice and data services using VoIP. Universal use of the IP protocol for all applications will reduce complexity and provide more flexibility (Wright, 2001).
Transmitting Voice over Internet Protocol is also beneficial for the following reasons.

Reduction of Redundant Networks: This comes out to be a significant element in the cost-reduction category because typical PBXs (public branch exchanges) are usually also very costly to operate. Hence, use of VoIP would result in substantial savings in infrastructure costs even within a single building or facility (Wright, 2001).
Toll Bypass: It is the general view of the business community that via VoIP, convergence will result in savings on long-distance toll calls. This will be especially true for long distance communication because in international voice calls, a substantial part of the cost is derived from regulatory fees. In most cases, these surcharges don’t apply to circuits carrying data traffic. VoIP would result in a much less expensive way to make voice calls (Wright, 2001).

Diverse Voice Call Routing: Although the telephone services are very reliable, large companies often buy multiple, diverse circuits to the local telephone company’s exchange to act as a reserve system or as backup in times of emergency. However, these circuits are rarely utilized and ultimately result in increased fixed costs and doubling of the cost per month the company must pay for leased-line telephone access circuits. However, with VoIP, if a failure occurs on the primary telephone circuit at one location, the data network could be used to route calls temporarily to PBXs at other company locations. Hence, there is no longer the need for a redundant telephone circuit by leveraging the company’s data network (Wright, 2001).

Facilitation of Adds/Moves/Changes: For a company, it is often expensive to maintain a typical work area that includes data and telephone connectivity, especially when individuals are constantly moving from one desk to another. With a DHCP (Dynamic Host Configuration Protocol, which enables dynamic assignment of IP addresses to devices on a network), moving a PC from one LAN to another will become simpler due to auto-configuration functionality. However, moving a phone extension from one desk to another (or to another building) is not as simple, usually requiring reconfiguration of the office PBX systems. As VoIP is becoming more popular and widely used, a new type of PBX and IP telephone station has entered the marketplace. An IP Phone can automatically configure itself as a DHCP client. Now a desk needs only a single data jack, and the IP Phone can double as a hub or switch to provide a data port for the user’s PC. One or more PCs, or perhaps an IP fax machine, can be directly connected to the IP Phone, and all of them can utilize the local IP network. Moving employees from one desk to another is now less costly and more economically feasible for the organization (Wright, 2001).
Falling IP Equipment Costs: When voice is converted to packets, this puts computing power for data networking equipment near the endpoints of the network, where the packet-switching equipment shows a faster improvement in price/performance than switched equipment. With many companies feverishly developing new features for IP equipment, the price/performance of packet-switching equipment should continue to improve. Packet-switching equipment technology is able to keep pace with the increase in demand for IP.

Data Manipulation: A single network connection on the Web (via VoIP) also allows the Internet to host multiple forms of communication such as voice mail, e-mail and video images instead of using a conventional (and costly) telephone line. Information will be able to be accessed and delivered in several forms.

Internet-based information (such as e-mail and e-commerce) can now be accessed by telephone by using voice commands. A desktop computer (in addition to receiving e-mail) can now function as a business telephone and fax machine. Therefore, because of VoIP, organizations now recognize the potential for closer interaction with their customers (and potential customers). For example, instead of breaking a phone connection to transfer a potential buyer to customer service (or worse, losing them to a competitor’s customer service rep or Web site), a sales representative can access the appropriate customer service rep or Web page and provide the information while maintaining the original connection (Dunne, 2001).

Since the Internet is a packet switched or "connectionless" network, the individual packets of each voice signal travel over separate network paths for reassembly in the proper sequence at their ultimate destinations. This makes for a more efficient use of network resources and more reliability than the circuit switched PSTN (Slater, 2001).
Private voice networks require n (n-1) access links, whereas private data networks require only ‘n’ access links.

Voice has per-minute distance sensitive charge, whereas data on the other hand has flat time-sensitive charges.
Data transmission has no 64 kbps bandwidth limitation, which means that we can provide high fidelity voice transmissions very easily (Wright, 2001).
For the above advantages that VoIP systems offer to organizations, their growth is predicted to be stellar. Research firms estimated that the compound annual growth rate for IP-enabled telephone equipment was 132% over the period from 1997 to 2002. Industry analysts had estimated that the annual revenues from IP fax gateway market will increase from less than $20 million to over $100 million by the year 2000. These forecasts themselves are impetus enough for firms to invest in technologies that involve the transmission of voice over IP (Minoli & Minoli, 1998).

A research carried out in 1999 of analysts and IT managers proved that high-quality voice was expected to be placed over data networks in the near future. The research, which looked in to the current state of affairs in the voice-over-Internet Protocol (VoIP) technology throughout the world, found that a majority of the people foresee that 15 to 20 per cent of all voice traffic will be transmitted over data networks within the “near to mid-term.” The report also found that 83 per cent of respondents believe VoIP will be “broadly used” within the next five years (VoIP picks up support from high-tech executives).

A large number of people thought that the most common commercial applications for IP telephony will be voice. Next in the line of popularity would be fax and it would be followed by video.

Respondents were also asked where they thought the “greatest long-term applications of VoIP will take place.” The answer most commonly gotten was large, long-distance or telecommunications carriers (41.1 per cent), followed by major enterprises with remote locations (33.8 per cent), ISPs offering voice as content (17.7 per cent) and competitive local exchange carriers (16.9 per cent). Hence, a large number of people believed the advantages of VoIP to be greatest for long distance communication (VoIP picks up support from high-tech executives).

The regions of the world that are expected to have the largest concentration of VoIP applications in the short terms are the U.S. (74 per cent) and Europe (61 per cent). Asia, Latin America and Africa followed in the same order. Some of the people in the survey had reservations about the use of VoIP technology and these reservations were, the sacrifice of voice quality, inferior service quality to the public switched telephone network and diminishing functionality (VoIP picks up support from high-tech executives).

Less than 20 per cent thought that the problems of initial investment and the challenge of getting voice and data personnel to collaborate were considerable obstacles for an organization adopting VoIP. H.232 was anticipated to be the most likely standard to emerge in VoIP technologies. Lastly, a large majority, more than two-thirds, of respondents expected VoIP to take place directly at the desktop on a user's PC within the next 2 to 3 years (VoIP picks up support from high-tech executives).

Impact of Voice over Internet Protocol:
Beyond the advantages and disadvantages, in the short term VoIP will bring about major transformations in the telecommunications business and in the mid term it will take over from fixed- line calls.

An example of how VoIP will have a strong impact on the sector is the ongoing debate in the United States, where the FCC (Federal Communications Commission) must decide whether to classify this technology as communications or information. This is by no means trivial. If it is eventually considered as an information service, the national telephony companies that use VoIP will be exempt from paying the tariffs that the local telephony companies impose on them for the use of their local communications infrastructures. If, on the other hand, it is considered as communications, then the tariff system will be applied and the growth of IP telephony will be slowed down. Recently, the FCC rejected the application of AT&T, one of the largest American telephony companies, to be exempt from payment of these tariffs on long distance calls made over the Internet. According to the company, had the measure prospered something between 8,000 and 9,000 million dollars would have been saved. In this case the FCC considered that VoIP is a communications service. However, other applications presented before the FCC are still awaiting a verdict so the decision is not completely closed and it will depend on each case (Voice over IP (a)).

VoIP may be the first step towards major changes in the telecommunications market. If they eventually consider VoIP as an information service, the local telephony companies and the traditional sellers of communication equipment will be the ones most severely hit. On the other hand, the new generation of equipment sellers, the TV cable companies and the long distance telephony companies will stand to gain most.

The keys to the future of VoIP lie in the type of regulation applied to the development of new applications around this technology and the alliances forged between hardware and software companies so that they can enter this market in a big way. Undoubtedly, VoIP represents a huge business opportunity that few companies are going to let slip through their fingers; it also poses a serious threat to traditional telephony (Wright, 2001).

Conclusion:
Organizations are increasingly looking to VoIP as an attractive alternative to traditional PSTN. However, deploying VoIP is not as easy as flipping a switch, so it is important that an organization considers all the functionality they are going to require from their VoIP network and are aware of the potential issues that go along with deploying a VoIP network. Just as companies choose various protocols for their data networks, they will choose various protocols for their VoIP requirements, depending on the business and technical requirements at hand. Although the variety in VoIP protocols has caused some confusion in the marketplace, it is precisely this protocol flexibility that makes VoIP-based voice systems so much more useful than legacy voice systems (Mark, 2003).