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What Are IP Phones And How Are They Used?

leftIP phones, also commonly called VoIP phones, are becoming increasingly popular in both homes and businesses. A recent study by IBISWorld found that approximately 30 million people in the United States pay for VoIP services and that does not include the number of people who use free services like Google Voice, so the actual number of users is much higher. Here are some facts about IP phones and VoIP as well as some benefits and drawbacks.

What All This Means

IP stands for Internet Protocol. VoIP stands for voice over Internet Protocol. Essentially an IP phone works the same a regular phone, except that instead of routing calls over the public switched telephone network (PSTN), calls go through the Internet. Certain specialized IP phones may use a company’s intranet instead, but these cases are rare. IP phones are separate devices that typically look like the same as traditional phones, which are hooked to a special VoIP modem or to a computer via a USB port.


The biggest advantage of VoIP is that users typically pay a flat monthly rate and there are no additional charges for long distance or international calls. Because of this, VoIP is often less expensive than using PSTN phone lines. While many cell phone companies offer free long distance, they usually charge for international calls. You can also connect your IP phone to a fax machine to send and receive faxes much faster because it uses a broadband connection. Last, but certainly not least, the call quality of IP phones is better than PSTN phones and not subject to the interference or signal loss that cell phones commonly suffer from.


One problem with IP phones is that unlike PSTN phones, they do not work when the power goes out. You also have to have a working Internet connection in order to use an IP phone. The initial costs of IP phones are also higher. The phones themselves cost more because of the sophisticated technology involved. Home users typically also have to buy a special modem for routing their phone calls through the Internet. Businesses have to pay for the phones, installation, additional wiring, and some VoIP companies charge on a per-user basis. There is also a possibility with businesses that they may experience call problems if they go beyond the user capacity of their VoIP equipment.

For most people, the benefits of IP phones far outweigh the drawbacks. The monthly savings offset the initial costs and in case of a power outage, they can rely on their cell phones. VoIP technology is trickier for businesses though. For small businesses that typically deal with local clients, the investment in VoIP may not be worthwhile. In either case, the VoIP industry has grown tremendously over the past five years with no signs of slowing down.

About the Author: Keitha Niedbala loves to use her VoIP phone system to keep in touch with business partners. If you want to try it out, grab a new IP phone and service provider and prepare to be amazed at how efficient your phone service can be.

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