Monday, May 17, 2010

VOIP or Another Way To Make Phone Calls

This term VOIP has been bandied around for a while now and for those who are not tech savvy it can be pretty confusing. Even those of us who are technically inclined can be bamboozled from time to time. In this post I will attempt to cut through the tech and try to explain what it is and how it can save you a lot of money.

What has this to do with the iPhone? Up until recently Apple has placed severe restrictions on the use of VOIP applications on the iPhone but they have now dropped them and it now makes it far more attractive to use VOIP and thus potentially save you a bunch of money.

VOIP who?

VOIP is an acronym meaning Voice Over IP, or Voice Over the Internet. Many people have heard of Skype and the associated product Skype Out. This has been around for many years and has become quite popular and although it does use a voice over the Internet type system it is not exactly the same. With VOIP you can use a regular phone you buy from K Mart, plug it in to a dedicated box (ATA) and use it much like a normal home phone. Skype uses its own system of sending the voice information but VOIP uses a standard system called SIP that is supported by most network equipment manufacturers.

Many companies now use VOIP on their phones and if you work for a large company chances are you use one at work. Corporations and organisations such as Telstra, IBM, HP, and the CSIRO now either completely use VOIP or are starting to introduce VOIP for their telephone service.

How Does It Work?

Lets look at your average company. Put It In Here Inc (PIIHI) has offices in Adelaide Melbourne New York and London. They use your regular PABX (local office exchange) in each location. The PABX has a yearly maintenance contract and has quite a high cost to the company. Every time the company makes an interoffice call it incurs the regular STD, ISDN charges and outside calls incur normal phone charges.

PIIHI also has computer networks in each office and Cisco provide the network equipment and maintain their network. PIIHI decide to go with a VOIP service. They have to upgrade all of their network equipment to cater for the VOIP service (but it was due for an upgrade anyway). They also have to buy new phones at a cost of about $800 each but this is a fraction of their total Comms budget. But now everyone in the office has a smart desk phone with headset and a computer based phone management system to manage favourites, voice mail and re directions. All of the employees can now redirect their desk phone to any other phone in the company or even to their laptop so that they have full access to their phone service on a headset on their computer. If the employee wants to change desks they simply plug their phone and computer into the network point at the new desk. In fact regular telecommuters can simply plonk themselves down at any desk and have computer and phone available. That is not the best part. Because all offices are on the Internet inter-office calls are now free and outside calls cost a fraction of what they used to cost. All calls to Adelaide, Melbourne, London and New York (where most of PIIHI's customers are) are now free from all PIIH offices. Thus the total Comms bill for PIIHI is now close to zero.

The VOIP service that you an I would use for our personal use does not have all of the fancy features that the PIIH inc service has but it is much more like your home phone but cheaper and more versatile.

OK, I'm Confused. Get to the point...

Fair enough. This has nothing to do with your humble iPhone, or does it. Bear with me.

So VOIP calls are made via the Internet and cost next to nothing, especially if the person at the other end is on the same system as you. How do I set it up?

There are a number of providers who can provide your average punter such as you or me with their own VOIP service, two of which are Pennytel and MyNetFone. There are a number of ways of using this service but I will stick to the three that we are likely to use.

Firstly you can use what is termed and ATA device. Both Pennytel and MyNetFone can supply and ATA device preconfigured. At its simplest the ATA device has a power socket, a network socket and a phone socket. All you need to do is plug it into your home network, plug in an ordinary phone and it just works. You can start making calls immediately. The ATA device costs from about $20 to $100. Pretty simple. Once it is plugged in your new phone works exactly as if it was your regular home phone.

You can also use VOIP it on the computer using some software and a headset. It is similar to Skype here. Again you just make your phone call as if you were using your home phone.

Finally you can get iPhone apps that work exactly as if you were using your iPhone to make a phone call, except you are not using your phone's sim to make a cellular call, you are using your data connection (3G or WiFi) to send the VOIP information.

How Much is The Going to Cost Then?

If you want to only use it at home using your ATA device then it will cost you the ATA device, phone if you do not have a spare and the cost of the calls. Different providers have differing charging structures but they are typically around 10c per call untimed inside Australia and 10c per minute to major international centres.

If you use it on your computer there is no extra charge. The computer software is typically free (but there may be a one off license fee for some parts of the software).

There and a number of iPhone apps varying from free to over $10 and Pennytel does have a free dedicated app but it only works if you are using WiFi. Pennytel are planning an update that will allow it to be used over the cellular network but that is not yet released.

My two favourite providers Pennytel and MyNetFone have differing price structures but the most basic plan is free and costs inside Australia to fixed lines are 8c and 10c untimed. If you want people to be able to ring you on your VOIP service then you need a DID (Direct In Dial) number. This usually costs about $5 per month but this depends on the plans and specials that they may offer from time to time. This is not necessary for Pennytel to Pennytel, or MyNetFone to MyNetFone calls. As a for instance, one of my friends save roughly $2o odd on his wife's first call to the UK. Instead of paying over $20 the call cost about $2.50 using VOIP.

Go to the links above for more details on the plans but most people can start with the untimed plan and see how they go. After all the basic plans do not have any monthly fees.

My ISP Does VOIP. And what about Naked.

Most ISPs now provide a VOIP service but you should compare the price of your ISP with other VOIP providers. They usually incur a monthly fee, they are more expensive and do not have flexible plans. Also having multiple providers which do not incur a monthly fee is handy. It enables you to use the provider that provides the cheapest rate for each type of number. It is also handy to have a backup provider in case one of them is having technical difficulties which does happen from time to time.

A number of ISPs are offering a naked broadband service, some with included VOIP. This means that you can cancel your home phone and just use the VOIP service as your primary phone with your mobile as a backup. This can save money but do your sums first. What can appear to be a good deal may not turn out quite as good once you add it all up. But going naked is certainly an option, particularly if you can use voip on the iPhone using one service and you have an ATA device with a DID number from another service on your home network. In a last resort people can still contact you via your mobile phone.

What about the iPhone Apps?

You have done your sums, chosen a provider(s) and you are ready to get it onto the iPhone. What options do I have and how do I do it?

One thing I need to highlight is that you can only use one voip service from one location at a time. This is important to understand. For instance, if you have your ATA device at home and you connect to your VOIP service from your iPhone then the ATA device drops its VOIP connection. In fact I believe (but am not sure) that you cannot connect to the same VOIP provider with two differing user IDs over the same broadband connection. In other words, if two people in the same house have two different VOIP accounts with Pennytel they cannot both use it through the same ADSL connection. However you can use the cellular network if this happens.

The following are some of the many VOIP apps that are available and their strengths and weaknesses. These are not recomendations just a very brief overview and you really need to do further research before spending money on any of the paid apps, especially the more expensive ones.


This can only be used with the Pennytel service. It works fine and all that is required is that you put in your UID and password. You will find this in the confirmation email they sent you. Connect to WiFi, open the app, type in the number or choose from your contacts and dial to your hearts content. Pennytel are working on an update for VOIP over 3G.

Pros: Free. Easy to configure. Dedicated to Pennytel. Can receive calls. Very secure.

Cons: Does not work without WiFi, does not have push, does not support other providers.


This is more of a social networking app with IM integration including VOIP. The VOIP part is fairly basic but it is pretty easy to configure. However it requires a Fring account to use and some may see this as a security issue.

Pros: Free, easy to configure, works over WiFi.

Cons: Only supports one account. Not configurable for improved quality. Requires a Fring account which posses a possible security risk.


This is the free version of iSip which is probably the most feature rich VOIP app. See iSip below.

Pros: Cheap $1.19. Configurable for a wide range of options. Preconfigurd for many popular VOIP providers for easy setup.

Cons: See the full version for additional features.


This is the full version of iSipSimple and is one of the more expensive clients but has everything one could possible want. It supports multiple accounts, inbound calls, push notifications of inbound calls, contacts integration, recents, favourites, and can be used over the cellular network.

The push service does not work for some providers and although many people claim that push works fine I am one of the many who have not been able to get push working. I have the latest version and I can receive and answer calls using push but we cannot hear each other when the phone answers. I have also found the inbound calls are somewhat unreliable.

Pros: Works over 3G. Supports Push. Simple configuration for many VOIP providers. Multiple acounts.

Cons: Push does not always work. I have found it somewhat buggy. Expensive $7.99.

V Phone

This is almost as versatile and has many of the features as iSip but without push. I have the 4.0 Beta OS installed and cannot get V Phone woking so I cannot comment on its features but for the price it seems quite good unless you want push notifications.

Pros: Works over 3G. Two accounts. Contacts integration. Simple setup with many pre-configured providers.

Cons: Does not support push.


This is a generic social networking app that also allows voip calls. By default it uses the Nimbuzz voip service but you can configure it to ues your own voip account.

Its features are somewhat limited and has no call history or favourites but for a free simple client that includes integration with other social networking sites is perfectly fine.

Pros Simple, can include other social networking services in the same client, free.

Cons, no push, no favourites or recents.


This is a fully functional client that supports multiple connections, push, favourites, avatars and an in app purchase of G.729 codec. The G.729 codec is licensed so requires an additional purchase for most clients that support it.

It is said to be extremely easy to set up but I cannot confirm this since I have not used it. However from the list of features I cannot see anything missing. However at AU$9.99 it is at the more expensive end of voip clients.

Pros: Push, multiple accounts, favourites and recents, many features, in app purchase of G.729

Cons: The Expsnsive that I have reviewed.


I hope this gives you a better understanding of VOIP ans provides you with the confidence to get your voip account and start saving money on phone calls. For a small number of people VOIP will not really save much money but for most of us we can save a large proportion of our monthly bill with voip.

Go to one of the voip providers, sign up for a free and PAYG account, get one of the free clients from above, set it up and try it out.