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March 01, 2004
Dan Phillips - dphillips@its-services.com

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© 2004 Hospitality Upgrade. No reproduction without written permission.

VoIP (sometimes pronounced as “voyP”) stands for voice over Internet protocol. If you are as old as I am, you probably remember some science teacher telling you that sound is carried by waves: the higher the pitch, the more frequent the waves. Well, initially that was how voice was carried over copper wire. In the last 20 years, digital transmission of voice has become more prevalent. VoIP is the latest incarnation of digital voice transmission.

Let us assume that you are going to make a phone call from your home to your friend’s home. You pick up the handset and dial the number. That number goes out over the public network through specific pairs of wires connecting various telephone companies’ switches until it is answered. In essence, this results in you and your friend having a temporary dedicated, end-to-end circuit, meaning no one else can talk on your circuit until you hang up and release it. This is called circuit switching and is how voice is currently carried over copper.

Internet protocol uses packet switching. You may be familiar with this term if you have been using computers with Internet access over the last couple of years. Packet switching is an amazing phenomenon. Let us assume that between you and your friend are hundreds of railroad tracks going every which way. Let us assume that your voice conversation is broken down into small time-segments called packets such that only a few words can fit in a packet and that each packet takes one railroad car. Packet switching takes all of the packets and puts them in different cars and on different railroad tracks and then, generally, has them all show up on location pretty much in chronological order.

Computers are quite adept at receiving packets out of order and perhaps with some packets missing, and still reassemble that data. However, in a voice world, putting parts of sentences in front of parts that were supposed to follow, and then losing a few bits and pieces here and there can be hilarious or disastrous.

VoIP quality has been steadily improving. In fact, you have probably had many phone calls carried in part by VoIP and never were aware of it. VoIP, from both the RBOC and interexchange carriers (long-distance companies), is providing significant savings. Companies such as BellSouth, SBC Communications, Qwest, Verizon, AT&T and MCI are all currently using VoIP and have aggressive plans to employ more of this service in 2004. For example, AT&T will spend $3 billion this year to move its global network completely to IP by 2005.

There are VoIP services that can be used that require no additional equipment, work with the existing phone network and use traditional phone numbers. There are other services that require new equipment to be installed, bypass the phone network and rely on IP addresses instead of phone numbers. The user will have to determine which type of service best meets his demands. Then the user has two different choices in standards to deploy this service: the H.323 standard or using a protocol called SIP (session initiation protocol). The decision on which variation to use can be quite daunting.

There are current advantages to VoIP. These advantages include better control over phone service, lower costs, improving your internal processes and very easy adds, moves and changes. These need to be weighed against two rather staunch disadvantages. One disadvantage is call quality; the other is the government has yet to decide how to regulate this service. 

Dan Phillips is COO of ITS, a consulting firm located outside of Atlanta, Ga., specializing in technology in the hospitality industry. For comment or question, he can be reached at dphillips@its-services.com.

VoIP in Hospitality
Currently, there are hotel management companies with hotels spread throughout the country and the world that are using VoIP. They have either established a corporate WAN or have installed equipment to share bandwidth being used by data applications or Internet access. VoIP then runs over that bandwidth. Primarily, these services are for the administrative staff and not the guests, but this has a dramatic cost savings. Another interesting feature is teleworking or using your VoIP at home just as if you were in the office. Perhaps a hotel could route guest international traffic over a VoIP gateway and advertise greatly reduced rates to their guests (or enjoy a huge profit margin).

There are some hotels that have purchased an “all-you-can-eat” VoIP pipeline. In essence, they pay a flat monthly fee for a T-1 or some form of bandwidth and some peripheral equipment rental. They connect this pipe to their phone system and they get all their domestic long distance for free. International traffic may be priced at just pennies per minute.

It could be said that VoIP today has more applications for the administrative side of the hotel. In reality a vast majority of existing hotels won’t perceive a return on investment on VoIP right now; however, new-build hotels can find VoIP quite enticing. And, in the near future, VoIP, and primarily SIP will find exciting applications in the guestrooms. These new applications will include: next-generation telephones with built-in touchscreens that run HTML and Java applications, on-screen phone books, click-to-talk advertising and integration with a guest’s PDA for speed dialing of contact lists.

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