The Rise of Voice Over Internet Protocol (VoIP) in Modern Age Communication

The worldwide VoIP market is estimated to reach $55 billion by 2025. Without any doubt, VoIP technology is here to stay and is rapidly becoming an integral part of world communication. Numerous advantages of VoIP over traditional telephony have led to its rise.

And with business expanding across domestic and international regions, there is a growing demand for cost-effective communication solutions.

As the VoIP tech is better developed and comes with plenty of benefits, commercial and domestic users have started to favor this internet-based phone system.

Keep on reading to learn more about the history of VoIP, how it works, and what are its main benefits. 

How does VoIP work?

Simply put, VoIP is a modern way of transporting audio calls. This technology converts analog audio signals into packets of digital data and transmitted over the internet in real-time. 

In other words, telephone communication is carried out through digital computer networks like the internet. There is no need for infrastructures like wires or any special equipment as existing networks are used for data trafficking. 

This also means VoIP technology saves you money since there are no costly hardware or maintenance expenses. 

How did it all start?

To better understand the VoIP’s beginnings, it’s essential to make a brief introduction. Although inventor Alexander Graham Bell made the first telephone call back in 1876, a hundred years later, long-distance calls were still extremely expensive. 

The cause behind these high prices were the costly analog networks required for traditional telephone systems. 

The hobbyists in the early 1990s have developed the concept of using computers to make voice calls. They were trying to think of a way to avoid pricey long-distance calls and international telephone charges.

The first commercial internet phone for the masses started in February of 1995, by a small enterprise in Israel called VocalTec. The company named its product InternetPhone, and it required a particular software setup so one user could contact another via their computers, a set of speakers, and a microphone. 

In 1998, this company introduced computer-to-telephone and phone-to-phone calling features for VoIP, but the adoption was only 1 percent. Such low numbers were partly due to the advertisements that users had to listen before, during, and after their calls. 

In these early years, VoIP technology dealt with various problems like connectivity issues and low audio quality. 

By 1999, the market was looking for alternative, flexible telephony solutions. The disruptive ads got ditched, while the features like reliability and capability were improved. 

Gaining momentum

In the 21st century, the telephony equipment companies started to realize the benefits of making calls via IP. So, VoIP services got associated with better quality, lower costs, and increases in speed since And by 2003, the quarter of all voice calls were VoIP-based. 

Besides enhanced call quality, VoIP services came with lower costs like decreased fees for long-distance calls. These lower expenses resulted in more corporate implementations and even changed the job market landscape. 

VoIP contact centers overseas were more feasible than ever with this breakthrough technology.

In 2003, Skype was founded in Estonia. It offered free audio-only in-network communications, while the calls via PSTN were charged. When the company added video chat features into its software in 2005, its adoption skyrocketed. 

Going mainstream

In the last decade, VoIP technology exploded. By 2012, hosted VoIP telephone services increased in popularity, with a growth rate of around 17 percent per year. And in the next three years, many companies were about to transition to VoIP calls or already used this kind of technology.

The cost of internet-based calls has encouraged a shift from traditional telephony to greater demand for voice and video calls made via VoIP. 

As a result, there was a boom in VoIP providers, offering different features, packaging, and prices. 

In 2018 VoIP industry was already worth $20 billion in the U.S alone. It was growing at a rate of more than 28 percent between 2016 and 2020 when the Coronavirus pandemic was declared. It led to an increase in remote work and even greater communication needs.

VoIP’s benefits & advantages

Today, VoIP operates via platforms like Facebook Messenger, WhatsApp, Zoom, and Microsoft Teams. It has a vital role in business, but both companies and individuals are using it. 

Depending on your VoIP service, long-distance and international calls are either very low-priced or free. Businesses that switch to VoIP can save 50 – 75 percent in communication services.

And with remote work on the rise, VoIP technology makes it easier for remote employees to stay connected with the in-house teams. 

There are even more perks to this fantastic service that are not available via traditional phone services. 

For instance, the call routing feature enables the incoming call to be transferred to several numbers (e.g., the office and your cell phone) before going to your voicemail. 

Another feature that has become essential for businesses is integration with CRM software. With VoIP and CRM working together, essential statistics and customer information are added automatically as your agents interact with the customer. 

Updates of customer databases happen in real-time, so agents have all the critical information on the screen while making the call. This allows them to personalize the interaction. It decreases the amount of time needed to find the customer’s details that could help during the call. 

Finally, unified communications powered by VoIP technology refer to many modes of digital communication included in a single package.

This means that besides voice calls, video chat, file sharing, instant messaging, video conferencing, screen sharing, emailing, virtual voicemail, and SMS texting are available within one system too. 

The future of VoIP

With flexible features and feasible long-distance and international calls, VoIP’s popularity isn’t going to fade away any time soon. 

Estimates state that there will be 3 billion mobile users of VoIPby 2021, so this fast-growing technology will be an essential requirement for businesses in the future. 

Utilizing VoIP technology has the potential to improve business productivity and provide better customer experience, so there is no doubt that its future is a bright one!