VoIP-PAL.com, a telecommunications products, announced the termination of an agreement between it and Big Apple Consulting USA.

“We have had many inquiries asking us if we have an investor relations firm working with us,” said Richard Kipping, chief executive officer of VoIP-PAL.com. “So to clarify, we thought we should announce that VoIP-PAL.com, Inc. suspended its agreement with BigApple Consulting USA on October 17, 2007 for a three-month period pending clarification on certain matters relating to the agreement. After an internal review we decided to terminate the agreement.”

VoIP-PAL and WorldTel Xchange Inc. announced an alliance in April. The two companies will be jointly marketing an “exciting new product” through VoIP-PAL’s Niche Sales Channel, according to a news release.

Steve Lipman, pesident of WorldTel Xchange, Inc., said, “The combination of VoIP-PAL’s relationship with the Airline Points Program and WorldTel’s new ‘1ButtontoWiFi’ patented cellular/VoIP 1-touch technology will have a tremendous impact with consumers that have accumulated thousands of unused miles.”

The new product aims to capture the “untapped market of 3.2 billion cell phones worldwide,” and is purported to turn any cell phone, PDA or Smartphone—including the iPhone—into a WiFi phone.

VoIP-PAL.com offers local and long distance voice over IP phone services for both retail and business customers, as well as turnkey solutions through its Partners for the Loyalty Transactional platform, according to officials.

BT announced the release of its MarketPulse product, designed specifically for delivering VoIP service to the trading room on the Radianz Shared Market Infrastructure.

BT MarketPulse integrates data, voice and other multimedia applications in open session initiation protocol. Users can coordinate point-to-point connections used to deliver calls to the trading room.

A human voice is essential in the trading room, and IPC Systems and Orange Business Services as well as BT are among the top makers of data integration systems especially for the high-tension atmosphere.

Compatible with all platforms currently used in the market, BT’s MarketPulse provides real-time self-provisioning of new clients or trading positions via a directory-driven customer portal; the ability to immediately route sessions to alternative locations in the event of a business affecting incident; the ability to support a hybrid TDM-IP environment, easing the upgrade to IP; and the ability to support unified communications technologies and applications.

 ”The market has been slow to take up VoIP services for the trading room due to concerns with its quality, reliability and security. This innovative service takes VoIP to a new level by offering the flexibility of BT’s SIP capability together with the reliability of the Radianz Shared Market Infrastructure,” said Phil Mottram, Managing Director, Radianz and Trading Systems at BT.

“Although VoIP in the trading room has been around for several years now, not all financial institutions have made the leap to IP for various reasons. Combining the strength of IP in the trading room with a robust network backbone can potentially change the market’s perception of VoIP and truly increase its adoption,” said Sang Lee, Managing Partner at Aite Group.

We’ve already talked about the VoIP growth rates in the United States, which are somewhat driven by the uncertain economy. But Canada is seeing growth in numbers of VoIP users, as well.

Up to 44 percent of voice subscribers in Quebec were VoIP customers by the end of last year, according to a study by Leger Marketing. Only 1 year before, that number was only 16 percent.

“We were surprised when we saw the results,” said Najoua Kooli, a project director with the Montreal-based research firm. “Traditional phone use was expected to drop in the coming years and we’re already starting to see it.”

VoIP technology is relatively new in Quebec, having become available in 2005. Industry professionals attribute the growth to demographics and says the growth is similar across Canada.

“As Generation Y increases its influence on the market these numbers will only continue to grow,” commented AR Communications technology analyst, Carmi Levy. “The understanding of what phone service is is very different among the generation that has grown up among the Internet.”

Lower cost and included features makes VoIP attractive, as current users well know. Traditional phone providers are suffering from the decreased market share.

 “Eventually everything is going to be VoIP,” said VoIP analyst, Jon Arnold, of J Arnold and Associates. Arnold also noted, however, that “it’s going to be a long time before that happens and the telecom companies … will want to milk the landline business as long as they can.”

Initial troubles with call quality may have slowed adoption rates. Dropped calls, echoes and static plagued calls.

However, for those willing to give it another chance, recent improvements in software and equipment have vastly improved call quality. Some still balk after those initial problems as well as unfamiliarity, and Vonage Canada vice-president Joe Parent called sales an “uphill battle.”

“The breakthrough was when the cable companies came into the market [in 2005] and validated Vonage’s business model,” says Mr. Parent. “And also more recently with the deregulation of the residential market in Canada.”

Now, instead of battling hesitant customers, VoIP providers are battling each other.

Big-time computer manufacturer Dell formed a partnership with Fonality that will bring Fonality VoIP to Dell’s business customers.

Dell is looking to capitalize on that trend, and chose Fonality and its Asterisk opensource telephony package. Fonality’s product is “easy to use” and “directly installable,” making it a good choice for PC behemoth Dell to include in its small and medium business packages.

Fonality, meanwhile, can capitalize on Dell’s 28 percent U.S. market share and brand recognition, piggybacking the Fonality name along with Dell’s.

Fonality customized its IP PBX software for Dell, and is made for businesses with less than 150 employees. The system runs on a Dell Optiplex 330 PC, and Fonality’s Dell-specific software is based on its trixboxPro.

Some of the product’s key features include Fonality’s hybrid hosted model. Customer PBXs link back to Fonality for monitoring, administration and support. Fonality’s software for Dell comes with trixNet service—customers who work for other companies using the same system can talk to each other online for free. Fonality also offers a Heads Up Display graphical desktop application for handling the calls.

“Dell customers will plug brand-new Aastra phones in,” Fonality CEO Chris Lyman explained. “Our software will auto-detect them on the network, automatically give them a new extension and reboot them.”  Initially, the system will work with Aastra 9112, 9133 and 480 iCT phones, as well as with the Polycom IP 4000 speakerphone.

Matt Asay’s CNet blog references a Dell’Oro Group group analyst quoted in The Wall Street Journal who estimates that 35 million small businesses worldwide will begin using VoIP in the next three years.

Vonage settled with Sprint in a patent infringement suit Monday. A judge awarded $69.5 million to Sprint in the suit, which claimed Vonage had infringed upon six Sprint-Nextel patents.

Two weeks after the guilty verdict, the price tag is now $80 million:  $40 million for a fully paid future license to use its voice-over-packet services portfolio, $35 million for past use of the VoP license and $5 million in prepayment of services.

Ouch.

We’ve already talked about Vonage’s tough year. More patent litigation with Verizon is still in appeal.  Vonage execs are still trying to put a good face on the settlement, but customer confidence is fading.

“We are pleased to resolve our dispute with Sprint and enter into a productive future relationship,” says Shannon O’Leary, Vonage’s general counsel. “We believe this deal is good news for Vonage, our customers and our shareholders.”

“We view this settlement and licensing agreement as a validation of the strength and breadth of our patent portfolio,” says Harley Ball, Sprint Nextel’s vice president of intellectual property. “This is an affirmation of Sprint’s research and development and a testament to the rich history of innovation at Sprint Nextel.”

It may not be all doom and gloom; the $80 million includes licensing for future use of the patents. Also, oddly, Vonage stocks rose and Sprints’ fell after the decision. Stocks were up 123% Monday.

If VoIP isn’t the average consumer’s first choice for telephone service, it may pick up even more speed in the near future. While VoIP user numbers are growing steadily, it’s more popular with small businesses.

911 service continues to make potential VoIP users leery; stories of misrouted emergency calls have made recent headlines. With new FCC www.fcc.gov regulations that require providers to offer Enhanced 911, however, that stigma may quickly fade.

Anyone who’s ever read their phone bill closely for traditional phone services may remember feeling surprise and annoyance—or shock and rage, depending on their personality—at the multitude of fees and charges that inflate the bill to nearly double what the actual service costs. Add to that the fact that voicemail, caller ID and other features cost extra, but are usually included in the package price of VoIP, and it’s clear why land lines are quickly becoming obsolete.

The real reason land lines are less and less popular every day is cell phones, however. Again, with calling packages that include long distance, caller ID and voice mail, why would the average consumer pay for both?

Enter VoIP, the perfect low-cost backup phone. Mobile VoIP is expected to radically change the telephone market, but since it’s still in its infancy, VoIP at home is often the service of choice for many.

As consumers of all ages become more and more comfortable with technology, the thought of using the internet to make phone calls won’t seem so odd in a few years. Most of Generation X feels right at home with new technology, and even previous generations accept computer and communications innovations with increasing ease, as our world becomes more and more interconnected and tech-dependent.

The short answer is yes, VoIP is certainly the solution most individuals have been seeking for their communications needs, and it’s a perfect fit for many businesses as well—but that’s a discussion for another day.

It’s hard to argue that VoIP use is growing worldwide. Lower costs attract customers across the market, but appear especially attractive to businesses. While growth figures  appear impressive, there’s more to the story.

Less than half of all businesses use VoIP, and numbers are even lower among small businesses. VoIP industry predictions look for huge growth figures in the next three years, but in order for those to become a reality, there are some hurdles that face the industry.

In its eighth annual industry report, iLocus found that “that there were estimated 37.5 million VoBB subscribers worldwide as of end 2006. 16.5 million new VoBB subscribers were added during 2006. US added almost 3 million new VoBB subscribers during 2006. France and Germany added about 2.15 million and 1.16 million new VoBB subscribers respectively during 2006. Other markets which were aggressive in expanding VoBB subscriber base in 2006 include Netherlands, Canada, and Italy.”

That all sounds great. But reliability, quality of service, confusing technology and security hold many businesses back from jumping on the VoIP bandwagon.

Public switched telephone network has been a communications mainstay for decades. Businesses look for the same infrastructure in VoIP, and find it lacking. Expectations of a phone system are high; when there’s no dial tone in the handset, users are frustrated and angry—more so than if their computer went belly up. Businesses depend on a reliable phone network to conduct their daily operations, and the unreliability of a few years ago still stains the perception of VoIP. Today’s VoIP performance outdistances that of a few years ago, but cautious businesses still hesitate to take the plunge.

In addition to reliability, businesses look for network quality of service. “VoIP is far more sensitive to network ‘glitches’ than data transmission is,” says ZDNet Asia. Dropped packets that result in spotty phone service will bring complaints from users on both ends. VoIP is subject to network congestion, corruption of data, delays in packet delivery and packets arriving out of sequence. All of these factors can cause disrupted calls and poor call quality. Additionally, the analog-to-digital conversion can cause distortions or echo effects. These issues aren’t insurmountable; but they do require a little more trouble to manage and a higher level of expertise. Available management solutions add to the cost of the system, lowering the savings that make VoIP attractive to begin with.

The complexity of VoIP communications is another deterrent. Network administrators may not be thrilled about the new terrain found in VoIP networks, and the terminology is confusing as well. That makes it tough for administrators to choose the best setup. IT staff is usually already overworked depending on the size of the business, and adding another burden to their workload may not seem so attractive no matter how much less expensive it may be. There are solutions, though.

Businesses can take advantage of consultants to set up their VoIP network, or use hosted VoIP services. Yet again, this reduces the cost savings of making the switch.

The security of VoIP networks presents an obstacle as well. Reports have circulated that warn of intercepted calls and eavesdropping. Traditional phone communications are not 100 percent secure, but require much effort and physical access to tap into. The routers and servers that VoIP calls must go through provide points where information can be accessed. Encryption can ensure that VoIP is as secure—or more so—than PSTN, but user concerns remain.

VoIP’s growth has been impressive, but in order for VoIP providers to see the market share hey hope for, these issues are some of the foremost they need to address—without cost increases that will push savings-seeking businesses back to a traditional phone system.

Simply put, VoIP refers to the carriage of voice signals over the Internet. PC to Phone VoIP refers to using your ‘Internet-connected’ computer to make calls to conventional telephones around the world. Whereas traditional telephone calls take place over fixed line ‘circuit switched’ networks, VoIP calls are routed through the Internet using a far more efficient method known as ‘packet switching’. Whilst carrying voice data more efficiently via the Internet is a benefit, the main advantage that VoIP has is one of cost. For example, a typical PC to Phone VoIP call to a telephone in the United States from anywhere in the world generally runs at just a few cents per minute. Keep in mind, the clarity/quality of PC to Phone calls is usually as good and in many cases better than that of a comparable Phone to Phone call.

How can it be so cheap?

Herein lies the beauty of PC to Phone calls. By using the Internet to route your calls, long-distance charges imposed upon you by the major telecommunications companies (Bell, Sprint, AT&T, etc) are all but eliminated. Furthermore, many of the governmental levies and fees associated with using the highly regulated ‘traditional’ telephone networks are also avoided. The result? Extremely cheap, long distance calling to conventional telephones around the world with little or no loss of call quality.

So how does it work?

In a typical PC to Phone call, your computer receives your voice input via a microphone and then translates your voice into a ‘data packet’. This packet of data is then transmitted via the Internet to as close as possible to the physical destination of the telephone you’re calling. Your voice ‘data packet’ is then switched to the conventional telephone network and routed to the phone that you are calling. All of this data transmission, translation and switching takes place transparently and extremely quickly. Chances are that the person whom you’re calling would have no idea that you’re talking to them using your computer.

So what do you need?

In order to start making long-distance telephone calls using your computer, you’ll need a computer that’s connected to the Internet, a microphone and speakers (a headset with a boom microphone is ideal). It’s worth mentioning that although there are several companies that support both the Linux and Macintosh platforms (e.g., www.skype.com), the vast majority of PC to Phone software is designed for use on Windows’ compatible PCs. As far as your Internet connection goes, the faster the better (e.g., high speed Cable or ADSL). However, PC to Phone does also work on dial-up Internet connections (the way I access the Internet).

The next thing to do is choose a PC to Phone Service Provider. These are the companies that provide the software and infrastructure necessary for you to make calls to conventional telephones via the Internet. There are many Service Providers and each have their own benefits and rates so it’s a good idea to shop around. Almost all of them allow for pay-as-you-go usage (i.e., on a per minute basis) however some also offer unlimited calling plans to certain destinations for a low monthly fee. Some of the better known Providers include

net2phone.com

iconnecthere.com

skype.com

Once you’ve chosen a Service Provider, you’ll need to open an account and deposit funds into that account. If you’re reluctant to use your credit card online, many of the PC to Phone companies offer alternative forms of payment (e.g., PayPal, direct deposit, wire transfer, etc.). Next, you’ll need to download the ‘softphone’ application from your service provider. A softphone is merely the interface program through which you dial the number of the person you’re calling and usually only takes a few minutes to download on even the slowest ‘dial-up’ Internet connections. Softphones generally resemble the keypad on conventional telephones and work in much the same way. Depending on your service provider, the manner in which you ‘dial out’ will vary. Typically, the softphone will take into account where you are in the world and adjust the dialing settings accordingly. In other words, you’d dial the exact same series of numbers into the softphone that you would if you were using a conventional telephone.

Once you’ve made a few calls to friends and family around the world using your computer, you’ll quickly realize the fantastic cost advantages of making ‘PC to Phone’ calls versus ‘Phone to Phone’ calls.

So what’s the catch?

Whilst PC to Phone is terrific, it isn’t perfect. There are some disadvantages that you should be aware of and these include:

a) Quality: If you access the Internet via a ‘dial-up’ connection (i.e., through a normal telephone line), you may experience call quality degradation if you are surfing the web and talking to someone via PC to Phone at the same time. In other words, the ‘bandwidth’ or ‘capacity of your Internet connection’ may be limited and this could affect your calling ability.

b) Echo: If you’re using computer speakers to hear the person you’re talking to, that person may hear an ‘echo’ of their own voice. This happens for reasons similar to that encountered with the ‘speakerphone’ function on conventional telephones. At the same time as you hear that person’s voice coming through your computer speakers, your microphone will also detect the voice and re-transmit the signal back to the person you’re talking to. This ‘echo’ can easily be avoided by using either a computer headset or by turning your speaker volume down so as to minimize the chance of your microphone picking up and retransmitting the incoming voice signals.

c) Cost: If you’re calling relatively small and/or remote countries, you should check the rates of the PC to Phone Service Providers’ to those countries before signing up for their PC to Phone service. For example, calling a country like Fiji in the Pacific Ocean is almost as expensive using PC to Phone as it is using a conventional telephone. The reason for these high rates to certain countries is usually due to the PC to Phone Service Provider not having the necessary switching equipment (required for switching your call back to the traditional telephone network from the Internet) physically located in that country. In these scenarios, your calls are routed through the traditional telephone network for a good proportion of the distance they travel and as such they attract many of the long-distance charges that the traditional networks impose. If you’d like to call one country in particular, it’s definitely worth shopping around to find out whether prospective PC to Phone companies have the necessary switching equipment located in that country (and hence, can pass on the savings to you in the form of cheaper rates).

So give PC to Phone a try. You’ve really nothing to lose and have the potential to save yourself a lot of money.

Interestingly, VoIP is not an entirely new thing. In fact, a number of providing companies have been around for some time. But it has only been with the more recent explosion of high-speed internet access usage, that VoIP has gotten any attention. Now the major telephone carriers are setting up their own VoIP calling plans throughout the US, another testament to the potential of the technology.

How VoIP Is Used

While there are a number of ways that VoIP is currently being used, most individual callers fall into one of three categories: ATA, IP Phones, and Computer-to-Computer.

ATA or Analog Telephone Adaptor, is the most common way of using VoIP. This adaptor actually allows you to hook up the phone that is already in your house, to your computer, and then your Internet connection. What the ATA does, is turn the analog signals your phone sends out into digital signals that can be sent over the Internet. Setting up this system is quite simple. It simply requires that you order an ATA (its an adaptor remember), plug the cable from your phone which would normally go into the wall socket into the ATA, and then the ATA gets plugged into your computer, which is connected to the internet. Some ATAs include software that has to be installed on your computer before its ready, but basically it’s quite a simple process. Then you are ready to make some calls.

The next type of VoIP usage utilizes IP Phones instead of your home phone. The IP Phone looks just like a normal phone, with all the same buttons and cradle, the only difference is that instead of having a normal wall jack connector, it has an Ethernet connector. This means, that instead of plugging in your IP phone to the wall jack like you would with a regular analog phone, it gets plugged directly into your router.

This option allows you to circumvent your personal computer, and it also means that you will not have to install any software, because its all built in to the handset. In addition, the fact that Wi-Fi IP phones will soon be available, which will allow subscribing callers to make VoIP calls from any Wi-Fi hot spot, make this option an exciting possibility.

The simplest and cheapest way to use VoIP is through computer-to-computer calls. These calls are entirely free, meaning no calling plan whatsoever. The only thing you need, is the software which can be found for free on the internet, a good internet connection, a microphone, speakers, and a sound card. Except for your monthly internet service fee, there is literally no cost for making these calls, no matter how many you make.

For large companies, VoIP also offers some very unique possibilities. Some larger companies are already utilizing the technology by conducting all intra-office calls through a VoIP network. Because the quality of sound is comparable to and in some cases surpasses that of analog service, some international companies are using VoIP to route international calls through the branch of their company nearest the call’s destination and then completing it on an analog system. This allows them to pay local rates internationally and still utilize the same intra-office VoIP network that they would if they were calling someone in the next cubicle over.

Other Advantages of VoIP

While your current long-distance plan covers you for only one location, say calls made from your office, with VoIP, you can make a call anywhere that you can get a broadband connection. That is because all three methods above, unlike analog calls, send the call information via the Internet. This means you can make calls from home, on vacation, on business trips, and almost anywhere else. Anywhere you go, with VoIP you can bring your home phone along with you. In the same way, computer-to-computer connections mean that as long as you have your laptop and a connection, you’re ready to go.

There are also some nifty benefits to having your calls transmitted over the Internet. For example, some VoIP service providers allow you to check your voicemail via your e-mail, while others allow you to attach voice messages to your e-mails.

How VoIP Works

The current phone system relies on a reliable but largely inefficient method for connecting calls known as circuit switching. This technique, which has been used for over 100 years, means that when a call is made between two people a connection is maintained in both directions between callers for the duration of the call. This dual directional characteristic gives the system the name circuit.

If, for example, you made a 30-minute call the circuit would be continuously open, and thus used, between the two phones. Up until about 1960, this meant that every call had to have an actual dedicated wire connecting the two phones. Thus a long distance call cost so much, because you were paying for pieces of copper wire to be connected all the way from your phone to the destination phone, and for that connection to remain constant throughout the call.

Today, however, your analog call is converted after leaving your house to a digital signal, where your call can be combined with many others on a single fiber optic cable. While this system is certainly an improvement over the past copper wire system, it is still quite inefficient. This inefficiency is due in part to the fact that the telephone line can’t distinguish between useful talking and unneeded silences. For example, in a typical conversation while one person is talking the other person is listening.

Thus the current analog system uses roughly half its space sending useless messages like this silence. But there is also more information, even down to pauses in speech, which under a more efficient system can be effectively cut out rather than wasting the circuit space. This idea of only transmitting the noisy bits of a telephone call and saving a great deal on circuit space, is the basis of Packet-Switching, the alternative method to circuit switching that the VoIP phone system uses.

Packet-Switching is the same method that you use when you view a website. For example, as you read this website, your computer is not maintaining a constant connection to the site, but rather making connections to send and receive information only on an as needed basis (such as when you click on a link). Just as this system allows the transfer of information over the Internet to work so quickly, so also does it work in the VoIP system. While circuit switching maintains a constant and open connection, packet switching opens connections just long enough to send bits of data called packets from one computer to another.

This allows the network to send your call (in packets) along the least congested and cheapest lines available, while also keeping your computer or IP phone, free to send and receive messages and calls with other computers. This way of sending information, not to mention data compression, makes the amount of information which must be transmitted for every call at least 3-4 times less for VoIP than the exact same call in a conventional telephone system. For this reason, VoIP is so much cheaper than conventional calling plans.

The Future of VoIP

While most analysts believe it will be at least a decade before companies and telephone providers make the full switch to VoIP, the potential for the technology’s use today is already quite astounding. A report by the Forrester Research Group predicts that by the end of 2006, nearly 5 million U.S. households will be using VoIP phone service. With the savings and flexibility that the technology already offers, and new advances just ahead on the horizon, we can expect those numbers will only increase in the future.

“In terms of new VoIP products, this is definitely the year of the small business,” John Macario, president of Savatar, told CRM Buyer.

Macario has attended several VON Conference and Expos — the voice-data industry’s primary trade show — over the years. At this year’s show, now drawing to a close, he says he heard the words “SMB” and “VoIP” in the same sentence more often than at the three previous shows combined.

SMBs have emerged as an important end-user constituency for VoIP technology, Macario contends.

 

Awareness but not Understanding

Indeed, a number of companies introduced VoIP products specifically designed for the SMB at the VON show. Even prior to this event, though, it was becoming clear that vendors were targeting this space.

Over the past few months, AT&T (NYSE: T), Avaya (NYSE: AV), Lucent, Broadsoft and Sprint (NYSE: S) have all introduced initiatives targeting this end of the market.

That’s the good news. The bad is that vendors still do not seem to understand SMBs — at least, not judging from their product pitches, according to a recently released survey by Savatar.

Savatar polled 560 SMB executives. The vast majority of those who had deployed a VoIP system thought it met or exceeded expectations — but not for the reasons VoIP providers have been touting.

SMBs are primarily interested in the business case VoIP can offer — they want lower total cost of ownership and better system management. Providers, however, are still trying to sell SMBs on features and functions.

Also, Savatar said, not all SMBs are current on the providers and the services that are offered. “Companies that want to sell into this market need to concentrate on education as well as product development if they want to see it take off.”

For instance, of those survey respondents that have not deployed VoIP, 55 percent expected its cost to be “about the same” or “worse,” while 56 percent echoed that sentiment regarding features. These numbers jump significantly for system management (74 percent) and migration (77 percent) issues.

“Are vendors getting the message across about the economic advantages VoIP can bring? The answer is patently no,” Savatar said.

On Display

Products on display at the VON trade show, many of which emphasized cost structures favorable to SMBs, suggest some vendors are starting to catch on.

Switchvox SMB, for instance, emphasized its low price — US$2,495 — for its new IP PBX product. Another vendor, Allworx, highlighted how small businesses with high call volumes can avoid purchasing expensive attendant hardware with its new Call Assistant software application.

Most vendors could not resist showing off new features and functions. Another SMB VoIP offering on display was Whaleback Systems’ new mobile application.

Then there is Microsoft (Nasdaq: MSFT), the world’s most ubiquitous small business application provider. At the show, Blake Irving, corporate vice president of the MSN Communication Services and Member Platform group, detailed the company’s VoIP strategy for Windows Live in a keynote speech.

“Our mission with Windows Live is to deepen people’s relationships with whomever and whatever matters most to them,” Irving said. “We will get there by working closely with the whole ecosystem of telecommunications, Internet  services and hardware manufacturing partners to build a complete presence- and contact-centric communications experience.”