Is VoIP ready for small business?

The premise of VoIP is a very attractive one for small businesses. It allows businesses to replace their dedicated phone lines – and the costs associated with them – with an internet connection.

The reason it hasn’t caught on in Australia is primarily due to the quality of connection. Unlike a traditional landline, the consistency and security of a VoIP call are reliant on the quality of the internet connection it’s running on. Given that Australia’s broadband is patchy in comparison to that found in 47 other countries globally, the technology was yet to be deemed ‘enterprise-ready. This meant that some businesses decided to use free services like Skype to complement their landlines, while others ruled the technology out altogether.

With constantly improving broadband speeds and the imminent rollout of the National Broadband Network, it looks as though VoIP has already started to become a viable and reliable option for small businesses.

“The nature of our business means we deal with customers all over the world and we have used Skype for years to reduce the cost of international calls,” says Richard Laansma CEO of Property Geek.

“In the past (over 18 months ago) the problem we faced with Skype was dropped calls; particularly annoying when you’ve waited in a phone queue for 10 minutes and then the call drops.”

Laanmasa signed up for a dedicated VoIP service as soon as ADSL2+ was available in his local area.

“Dedicated VoIP was working well, except for calling mobile phones,” explains Laanmasa. “But the quality of those calls seemed very poor and many times it wouldn’t connect. Worse, every time I lost my internet connection (sometimes due to an issue with the provider, sometimes my router), I lost all telephone connectivity for my business.”

Having used dedicated VoIP for a couple of months, Laanmasa decided that Property Geek couldn’t rely solely on a technology that was still presenting problems for their communications.

“So, we went back to the old way. We use a regular telephone number for domestic calls, which are now ‘free’ (included as part of our flat-rate package) and we use Skype for international calls,” admits Laanmasa. “Interestingly, the quality of Skype calls has improved significantly and I can’t remember the last time we had a ‘dropped’ call or poor quality.”

Balraj Hansra, CEO of Pilbara Geology Supplies, takes a more open approach to VoIP. As an entrepreneur, he was a very earlier adopter of the technology with his previous company Sterling Medical in 2007. He completely bypassed Skype altogether, opting for a VoIP plan, and hasn’t looked back.

“Basically it was a lot cheaper to use VoIP in terms of capital start-up costs, than actually getting a separate phone line put in and paying a line rental,” he explains.

The drawcard for Hansra with VoIP cost.

“The main thing was that we didn’t actually have to get a second line installed and pay the rent on a line – it was much cheaper, and much easier for a small business basically,” he says.

“Because we’re based on the east coast and most of our customers or clients are based in Queensland and Western Australia, it was a lot cheaper to actually use VoIP rather than an actual phone line solution.”

The cost and functionality aren’t the only concerns, however. Hansra greatly values the flexibility that VoIP affords him, given that he has to communicate with suppliers interstate and internationally.

“It basically allows us to stay in contact with our customers no matter where we are in the world, for a lot lower price than if we were using global roaming, or something similar,” he explains. “I was recently in China, and it was much easier to stay in contact with my business partner here in Australia, and also with customers.”

On this trip, Hansra turned off global roaming, got a Chinese sim card, and had all his incoming VoIP calls diverted to his new temporary number.

“Some of [the calls] didn’t work; so it’s not a foolproof solution; I suspect it’s probably because of the Chinese side. But it cost me personally 2.9c a minute rather than the global roaming cost, which would’ve been dollars per minute.”

Like Property Geek’s Laanmasa, Hansra does acknowledge that VoIP has presented the occasional complication.

“There have been some issues. Sometimes we were getting a bit of an echo, so the call quality wasn’t up to the normal landline. That has improved, probably because of the new implementation of VoIP codecs, or the line speed on our Internet was also upgraded as well.”

Unlike Laanmasa, Hansra hasn’t found the fact that the service depends on connectivity to present any problems and is convinced VoIP is a vital and valuable tool for small businesses.

“We’ve noticed about three outages over the four years we’ve been using it. So, very few, and it hasn’t really affected us. We’ve never been on the line at the time, it’s just we’ve noticed the internet has gone down, and thus, obviously, the phone has gone down.”

“We find that VOIP is definitely a fundamental small business technology as it allows startups to set up a business line with very low initial capital costs which help when there is a myriad of other capital costs when starting up a business. Just based on the cost to benefit ratio is much higher than if you used the normal landline.”

Given the rapidly improving rate of broadband in Australia, there is immense value in VoIP, especially for cash-strapped startups. It’s open to argument whether or not there is sufficient infrastructure to make the technology ‘enterprise-ready. If the cost saving to quality of service ratio is of concern, it’s best to wait and watch as VoIP improves.