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Background about how we got here
VoIP in the Telephone Network
PSTN (Public Switched Telephone Network)
Unknown to most consumers your voice has been sent using VoIP for some years by the very telephone operators who are now threatened by new alternatives. VoIP offers efficiency and therefore economy for the long distance international transport of voice. One of the first widespread uses of VoIP was for international transport between telephone companies.
Calling Card and Other Low-Cost Options
International calling card services have exploited VoIP. One of the first VoIP practices was the terminating of Internet calls. Independent operators set up terminating gateways (interface from Internet to telephone network) targeting countries where the regular telephone rates were very high. In countries where it was illegal such operations thrived until confiscated and new ones were set up. This was one of the first signs that VoIP was inevitable and could not be stopped, but only slowed by institutional intervention.
Wholesale Operations - the man behind the curtain
Behind the scenes to the consumer are numerous wholesale operators/resellers of telephone services. As in any market there is a wholesale market that with deregulation of phone services has grown substantially. Most telephone businesses of the last several years of operated on some kind of arbitrage, buying wholesale services in bulk and selling at less than established retail prices.
These network providers either offered calls from PCs or first generation telephone adapter products. These terminating gateways are much more sophisticated today and an integral part of the telephony landscape. This wholesale business operating behind the scenes is one reason that there are so many different offers of telephone service today. Without much investment, even none, you can be in the telephone business.
If your incoming traffic comes from the Internet, all you need is to arrange a telephone network connection and either own or arrange for a service that will take those calls from the Internet. Similarly if your calls originate from the phone network, as in a calling card business, you pay for telephone line connections into this switching equipment. Depending on the architecture and feature set the network equipment may have different names. You can think of it as a special server with network connections.
After bringing incoming calls into this network equipment, you want to send those calls to phones anywhere in the world. To do this you contract with a terminating service, which has made the network relationships needed to complete any call made.
Of course, this is over-simplified, but the point is important. There are not many barriers to entry in the VoIP phone business and the proof of this is the number of VoIP service providers. The consumer wins with many choices but that also brings confusion.
Continue to the Role of TeleVoce in VoIP »»