What’s prompting the change? It’s not wireless. The cellular phone system was designed to be tightly integrated with the PSTN. The earliest cell phones were analog, with TDM and other digital multiplexed protocols following. What hasn’t happened yet is the wholesale transition to packet switched voice on the wireline or wireless phone networks.
Where packet switching, notably VoIP, has flourished is on private telephone networks set up by enterprises for their own use and on connections to the PSTN through the Internet to avoid the phone company local loops.
Why is VoIP such a big deal? More and more businesses are migrating their in-house phone systems to VoIP solutions. Part of the reason is the cost advantage of eliminating the separate phone wiring network in favor of using the corporate LAN to connect computers and telephones. Another reason is to avoid long distance toll charges by interconnecting business locations on a converged voice and data network. A third reason is features. IP telephones are really more like computers than the old desk sets. They can be integrated with business applications to provide things like “screen pops” of customer information based on who is calling.
The migration from circuit switching to packet switching was originally accomplished by replacing the traditional PBX (Private Branch Exchange) with an IP PBX. Think of the PBX as a small version of the PSTN switches that handle massive amounts of public traffic. The PBX resides on your premises and does all your in-house call connections so you don’t have to pay the phone company to make a call from one desk to another. You also need the capacity to make and receive calls with the outside world, so your PBX has to connect to the PSTN through one or more outside lines called trunks.
Trunk lines are bundles of telephone lines. Most businesses need more than one outside line. They may start off with a single analog business line and add more over the years. At some point it makes sense to consolidate all those separate lines into a single digital trunk that can carry up to 24 separate phone conversations.
Just because the trunk lines have been switched from analog to digital, doesn’t mean you are using VoIP. Yes, VoIP telephony is digital, not analog. But the digital protocol used by T1 and PRI digital trunks is time division multiplexed switched circuit, not packet switched IP. With an IP PBX, you can switch to IP telephones in-house and connect your IP PBX to the company LAN so that you don’t have to maintain the separate telephone wiring. Your connections to the outside world will still by the same analog or digital trunk lines to the PSTN.
Where you really cut the cord, so to speak, is when you replace those PSTN trunk lines with something called a SIP Trunk. This is a private line connection between your IP PBX and your telephone service provider. That service provider takes the place of the local telephone company and connects to the PSTN at their end. You can still make all the local and long distance calls you want, but perhaps at a considerable cost savings.
The alternative to the SIP Trunk is the Internet. The Internet connects literally from everywhere to everywhere. It is a massive public infrastructure that economy of scale makes very inexpensive. Connecting from telephone to service provider for residential users is done using the Internet. Many small businesses have also taken this approach to minimize costs.
The tradeoff is that voice quality over the Internet varies quite a bit. It depends on the capacity of your connection plus whatever else is happening on the Internet. Traffic jams called “congestion” can degrade voice quality with distortion and delay. One minute everything sounds great, the next minute the caller sounds garbled. If it gets really bad, the call may be dropped.
Many businesses can’t stand this variability of performance. They want the same quality of phone conversations they had with the PSTN, but with the advanced features and cost savings offered by VoIP. The technical answer has been to use a private line connection between your company and the service provider. These SIP trunks can support multiple conversations, even scaled for hundreds or thousands of simultaneous calls.
The latest development is cloud hosted PBX systems. Cloud computing offers businesses the opportunity to avoid capital investments and maintenance costs in favor of paying by the user by the month to use a cloud based infrastructure. Cloud computing has been extended to include telephone service through a cloud hosted VoIP or cloud hosted PBX system. All of your in-house switching and outside calls are handled through the cloud. You have IP telephones on your premises plus a gateway device that connects through a private line to your cloud service provider.
This is great for single business sites, but does the entire setup have to be replicated at multiple locations?
Yes and no. Yes, you still need your IP phones and gateway at each branch office or other location. However, you can route your calls through the same cloud hosted PBX. Now it becomes more sensible to connect all of your locations to your cloud service provider through a MPLS (Multi-Protocol Label Switching) network rather than pay the cost of a private line for each location.
MPLS networks are privately operated, as opposed to the public Internet, and maintain enough resources to simultaneous support the needs of all of their customers. This includes class of service tagging so that voice calls get the priority they need to maintain call quality. Each location simply needs a last mile connection, such as T1 or Ethernet over Copper, to the very large MPLS network. The network takes care of traffic routing between your locations and your cloud service provider where all the switching takes place.
One excellent example of where this approach is optimized is the XO Hosted PBX service offered by XO Communications. XO is also a network operator, so they can provide both the cloud PBX and the MPLS network to connect your business locations in one optimized system. This gives you one vendor to deal with if problems ever arise.
Sounds a little like the old Bell System, doesn’t it? You deal with a single provider who makes the connections to your phones and does the switching. In this case, you have a choice of vendors and a far richer feature set than offered in the old days of phone monopoly. Today’s cloud hosted PBX systems can include your wireless phones as well as your desk phones so that you only need one telephone number no matter where you are.
MPLS is a likely candidate to become the new telephone network. It supports hundreds or thousands of customers without interference or service degradations. Of course, there needs to be a way to interconnect customers on different networks. This is currently done by routing outside calls through the PSTN. Eventually, Network to Network Interfaces (NNI) may allow larger cloud PBX providers to peer traffic so that most of your calls will be on-net and not subject to toll charges. Even the PSTN may evolve to a very large MPLS network based on VoIP technology, abandoning the analog and TDM legacy technologies that have been the standard for the last century.
Is your company interested in more advanced phone services with potentially large cost savings? If so, get prices and features for enterprise grade VoIP and cloud services now.