Cost of VoIP Phones and Service

What is the cost of Voice over IP & Total Cost of Ownership
What is the cost of Voice over IP, How VoIP reduces The Total Cost of Ownership.VoIP systems demonstrates greater cost effectiveness than traditional voice networks.

VoIP technology promises to integrate data and voice communication traffic into a single network, reducing the total cost of ownership (TCO) associated with a combined voice/data network. Using VoIP, analog voice signals are digitized and converted into data packets that are sent over IP-based networks. The integration of multiple media types - voice, data, video - into a single network eliminates infrastructure and maintenance redundancies, helping to reduce operational cost.

Another benefit of using a single network for voice, data, and video transmission is that various network elements, such as call servers, application servers (for example, for voice mail storage), and client devices can be more easily integrated.

Advanced client/server services also allow VoIP systems and devices to be managed remotely. Remote management reduces costs, including expenditures, associated with end-user Moves, Adds, and Changes (MACs) and costs relating to updating edge devices with the latest customer applications and services.

VoIP systems are increasingly demonstrating greater cost effectiveness than traditional voice networks. As VoIP technology evolves, the cost-benefit ratio, alongside efficiency and flexibility in implementation, will continue to increase.

The following chart compares the cost of two deployment scenarios for an enterprise of 10,000 phone users, where 50 percent of employees are divided between two large locations and the remainder among 12 branch offices. Analysis shows that replacing the current Private Branch Exchange (PBX) with another PBX increases cost by approximately 48 percent. However, replacing the existing PBX with an IP PBX saves approximately 11 percent of the overall replacement cost.

Savings apply not only to enterprises but to consumers, since network operators can forward the savings resulting from lower network deployment and maintenance costs to subscribers. In addition to lower network costs, consumers and enterprises can experience savings in service fees, bundled services, and long distance charges:

· Unlike local and long distance telephone carriers' existing proprietary voice networks, the Internet is an open network that can be used by any entity with the capability to offer voice services. As an open network, the Internet will encourage competition between service operators, resulting in lower service fees for consumers and enterprises.

· Communication networks such as cable and satellite networks can be enabled to provide VoIP-based phone services. As a result, cable and satellite providers can include VoIP Services with existing data subscription and content access services, such as cable TV subscriptions, and thus offer consumers a range of service packages with new discounts.

The Internet does not recognize state and country borders; with VoIP technology, the distinction between local, long-distance, and international calling largely disappears and callers can save on long-distance and international charges (also known as toll bypass).