Bringing VoIP in house

For business, IP telephony and voice over IP is starting to displace conventional phone services. According to industry analysts Forrester, as many as 47% of businesses in Europe and the US have either deployed, or are rolling out, an IP-based phone system. Around a third of companies are using VoIP for voice communications between their sites.

The voice over IP market is maturing rapidly. Consumer VoIP applications – such as Skype, Vonage and BT’s Broadband Talk – have been available for a number of years. Large enterprises have been using Internet telephony over their wide area networks, to connect sites and to cut the cost of international voice calls. But the last two years have really seen the options open up for small and mid-sized companies, as a result of better and more affordable equipment, and more reliable and faster Internet connectivity.

Introducing the IP PBX
Until around five years ago, the standard SME business phone system used ISDN for inbound and outbound connections. Now, though, the main manufacturers – Nortel, Avaya, Samsung, Panasonic and Aastra (formerly Ericsson), as well as voice-capable routers from Cisco and other IT vendors, support IP-based connections for both extensions and trunk lines.

This gives businesses the options of using either IP telephony in combination with conventional lines, via SIP trunks (see The backbone of IP telephony) or even using a purely IP-based system for calls to the public network.

Importantly for many clients, IP-based systems do away with the need to install or maintain separate internal cabling for telephony, as extensions can share existing Ethernet infrastructure. This can bring considerable savings in infrastructure costs.

Some businesses might want to install an all-IP system, with both IP trunks and IP extensions. Others will want to use IP trunks, either alone or in combination with conventional digital extensions; some businesses will want to keep their existing connections to the PSTN but move to IP-based extensions.

In most cases, unless a business is ordering phone services for a greenfield site, the best option is likely to be a combination of both IP and non-IP services, often described as a hybrid solution.

“It is rare now for us to deploy non VoIP platforms, although there is still demand for it from some clients,” says Tony Corlett, head of ICT solutions at Azzurri (, a reseller of Avaya telecoms systems. “But it is usually not the move from conventional to VoIP dial tone that makes the difference for the customer, but the applications that come with it, such as unified communications, and collaboration. It allows customers to bring in operational efficiencies.”

Moving on from a hosted solution
For smaller businesses, a hosted IP telecoms system – or IP Centrex – makes a lot of financial and practical sense. There is little in the way of up-front investment, aside from IP-capable handsets or adapters, a suitable Ethernet switch or router, and a monthly subscription to a service provider, which will transfer calls to the public phone network.

However, such systems will not suit every business.
Bandwidth management can be a serious issue, as all calls – even internal calls – need to be routed via the public network to the service provider’s central office. This can put considerable strain on network connectivity, especially for smaller businesses that rely on ADSL connections. A typical voice call will use in the region of 90 kilobits per second of bandwidth, both upstream and downstream. Data transferred will also count towards a business’ monthly data allowance.

For businesses that use one direct dial line per employee, or use conventional Centrex systems such as BT Featureline, this might not be too much of a concern. But for other businesses, which need to manage internal calls and have a higher ratio of extensions to external lines, a fully hosted solution can quickly become unwieldy.

Examples of businesses where some form of on-premise option makes sense include retailers, hotels and hospitality, manufacturing and warehousing: in fact, any installation where clients might want extensions in specific physical locations, rather than routing calls directly to individuals.

A small retailer, for example, might only have one or two external lines, but is likely to need one or two extensions on the shop floor, one in the back office, one in the store room and one in the staff room. In addition, organisations that employ larger numbers of staff might need to maintain direct connections to the PSTN for safety and business continuity reasons, so that they can operate independently, even if links to the central system are down.

Other reasons for running a PBX on site include the need for a central call handling system, centralised voicemail and call recording, conferencing, and direct connections to advanced applications such as customer relationship management (CRM). And there will be some clients who, despite the advantages of hosted solutions, will simply feel more comfortable running their telecoms infrastructure in house.

“Clients are looking for more than cost savings, for example through shared cabling. They might, for example, be looking to plug in remote or home workers to the system via broadband,” says Gary Howard, technical director of Nortel reseller 1st Communications (

A small-scale IP-enabled PBX will cost a client in the region of £800, with reasonable margins for the reseller. At the entry level, the customer will be able to buy a base unit equipped with support for at least four analogue lines or ISDN B-channels and support for around eight extensions, often a mix of digital, IP and in some cases, even analogue 2-wire phones and other equipment.

Expansion will be via internal cards for additional lines or extensions, or via an expansion chassis. Most entry-level business systems can expand to between 20 and 50 users, and the volume manufacturers offer larger units with extension capacities in excess of 200 users.

In addition, systems can be configured to work in tandem with a central unit, typically housed in a company data centre or hosted environment, passing calls on to remote users or smaller systems. Such networks are often used in retail or financial services, where companies want to handle in-bound calls centrally but maintain some local control over outbound calls, or preserve often scarce bandwidth to the branches.

As well as the main system, however, clients will have to budget for handsets – which can be in the region of £100 per user – cabling, and quite possibly an upgrade to their router and switching infrastructure, if they are using IP extensions.

Routers and gateways: preserving PBX investments
Not all businesses will want, or be able to afford, a complete upgrade to an IP-based infrastructure. There are several ways that a business can preserve its investment.

Some IP PBX systems, or IP-capable phone systems, allow end users to keep their existing handsets and wiring, either alone or in combination with IP-based phones. Nortel’s BCM series (, for example, is backwardly compatible with more recent phones from the Meridian range of digital phone systems; Panasonic allows users to mix and match phones on some of its systems, as does Avaya.

Alternatively, businesses might decide their existing PBX infrastructure still has a few years’ life left. In that case, wholesale replacement of the PBX, wiring and extensions might not be practical or sensible. Instead, suggest they introduce IP telephony via a gateway to the existing PBX, which can be hardware or software.

As long as the host PBX has spare line capacity - or capacity can be freed up by replacing conventional lines with SIP services - a gateway allows customers to preserve much of their existing infrastructure investment but still take advantage of IP features such as lower line rental and call costs, and support for call centralisation and out of area numbering.

A company could, for example, install a fully-featured IP PBX at head office or in the data centre, and route in-bound calls to branches over IP into an IP gateway. In addition, gateways allow businesses to route calls from closed IP systems, especially Skype, to existing hardware.

Companies without extensive on-site telephony infrastructure, or that are not concerned about preserving investments in older systems, could also look at VoIP-capable routers.

Both small office and higher-end routers now offer support for basic phone services, including quality of service (QoS), prioritisation for voice traffic and support for V-LANs, to segment voice and other traffic. At the bottom end of the market, the better ADSL routers support one or two FXS or conventional phone ports, as well as support for several IP-based handsets.

At the upper end, routers from suppliers such as Cisco can be upgraded to support VoIP, in the form of SIP trunks, as well as direct connections to the PSTN via expansion cards as well as other functions such as voicemail and support for off-site extensions for remote or mobile workers.

Such options give considerable flexibility, and offer cost savings in terms of fewer devices and so lower energy costs. However, the cost of upgrading a business-grade router to support IP telephony is typically as high, or higher, than that of supplying a standalone IP PBX with a similar specification. The decision of which system to recommend will ultimately depend on a careful analysis of the client’s existing infrastructure, their likely future needs and their requirement to integrate additional applications with their voice systems.

Network issues
A further consideration for anyone aiming to sell IP telephony services to their clients, is the capability of the client’s network, both internal and external.

The quality and reliability of voice telephony services is critical to the efficiency and reputation of a business. As a result, some resellers are reluctant to recommend entirely IP-based solutions, unless the client has enough bandwidth to cope.

The first step is to look at the client’s internal network infrastructure. This might need to be upgraded, to support higher speeds, QoS, V-LANs or possibly, Power over Ethernet (which is needed by many IP phones, unless you connect each handset to a mains power supply).

Upgrading internal network connections will usually be a question of installing the necessary hardware, and setting up the router and switches to reflect the new demands on the LAN. Perhaps more important, but also more complex, is the issue of external bandwidth.

A standard ADSL connection will be sufficient in most cases for a lone remote or home worker but not for an office, shop or factory. Some businesses will need to upgrade to SDSL or perhaps metro Ethernet or a leased line; others will be able to run multiple ADSL or SDSL connections, with one optimised for voice connections.

Bear in mind that even business DSL connections are usually shared, or “contended”, even if the contention ratio is lower than for a residential connection. A single ISDN2 line offers two 64kbps connections, uncontended, up and down stream. Unless a client’s broadband connection can at least match this for each simultaneous users, you might be better recommending a hybrid solution with a PSTN connection, for reliability reasons.

The backbone of IP telephony
Most consumer-oriented Internet telephony services either use proprietary hardware or software, or rely on SIP (session initiation protocol) to operate in combination with a central service, usually a registration server. Commercial VoIP services are typically based around a “soft” PBX or switch at the service provider’s central office, which manages connections between users and between the central office and the public switched phone network, or PSTN.

Such services work with standalone IP phone handsets, softphones and even mobile devices that support the SIP standard (including Windows Mobile, BlackBerry and iPhone). But they will not work with the majority of business-strength IP PBX systems. For this, clients need SIP trunks. Without SIP trunks, clients will be able to call other SIP users over the Internet, but not make or receive calls via the public phone network.

A SIP trunk works very much in the same way as a PSTN analogue or ISDN line, but it runs over a client’s Internet connection. But rather than operating via a registration server, the SIP trunk connects directly to a client’s physical IP PBX, soft switch, a SIP to analogue or ISDN gateway or a voice-enabled router such as CISCO’s ISR series. The service provider relies on the connected device’s MAC address for authentication, rather than a user name or password.

If a client has enough bandwidth to and from their site, SIP trunks can be very cost-effective. Several providers charge only a nominal sum for a SIP trunk to their central system and PSTN gateway, and nothing at all for inbound links. The service provider generates its revenue primarily from call charges. Spitfire( , for example, charges £4 a month for a SIP trunk.

SIP trunks are not as flexible as registration-based SIP accounts: users cannot, for example, set up two or more phones, such as an office phone, soft phone and mobile, to ring whenever a call comes in over the SIP service. For businesses that need IP telephony capacity from a fixed location- or prefer all remote workers’ calls to be routed via a central system – SIP trunks will be easier to configure and manage.

According to business ISPTimico (, companies currently running ISDN primary rate circuits (with the equivalent of 30 inbound or outbound lines) can save around two-thirds of their line rental by reducing their ISDN capacity to eight ISDN channels – the BT minimum – and moving the rest of their call capacity to SIP trunks. Such savings should pay for the up-front investment in an IP PBX in a year, assuming that clients are satisfied with the quality of calls over SIP.

SIP trunks are widely available through business ISPs and Internet voice service providers, including many of the companies that also provide hosted VoIP. You can resell services under your own brand, or else receive commissions when you sign up customers to SIP trunks (see Issue 2:

The usual layout of a conventional business voice system, with separate networks for voice and data. Data connections route to the IT equipment, voice over the public switched network to a PBX.
(source: Cisco Systems)

An integrated voice and data network with connections via the public Internet between branch offices and to head office
(source: Cisco Systems)

Connections to a conventional, digital PBX using SIP trunks to carry traffic to the public phone network. The SIP trunks connect to the PBX via a gateway, which uses FXS ports – analogue or ISDN – to provide incoming lines to the PBX.
(source: Timico)

Connections to an PBX using SIP trunks to carry traffic to the public phone network. As the PBX is IP-capable there is no need for a gateway; the PBX uses an Ethernet connection to connect to the client’s switch or router and then on to the public Internet, either over a general connection or an IP connection dedicated to VoIP.
(source: Timico)

Branch offices connected to a central office system via VoIP, using routers and Ethernet handsets; there are no telephony switches or PBXs at the branch office
(source: Cisco Systems)

The essential guide to SIP trunking
This article refers to US providers but is still a good technical guide to what’s going on in a SIP trunk connection:

Business VoIP Service Providers
VoIP Service Providers in the UK who offer full service products aimed at the SMB telephone market:

VoIP News
Specialist communications provider 8el has a useful roundup of news about VoIP in general:

Benefits of deploying Cisco Unified Communications
Although this white paper concentrates on larger firms, the arguments and the architecture are useful when planning systems for smaller customers:

Link to a Relevant FeatureClick here to see the article Unplugging the PBX to sell a VoIP installation or hosted VoIP

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