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Over the last several years, many consumers, small and medium size businesses (SMB) and even global enterprises have flocked to voice-over-Internet Protocol (VoIP) services. And the industry has learned that the old cliche -- you get what you pay for -- rings true. A sole focus on low cost can be costly in many ways.
A lot can be done to optimize the cost of IP (Internet Protocol) phones and other customer premise equipment (CPE), but pushing the limits without considering the system implications can have ripple effects, not only in the performance of the phone, but throughout the network. This can jeopardize the investments made to build and sustain a VoIP customer base, as well as the capital expenditures made on core infrastructure technologies. In contrast, moving too much functionality into each IP phone to reduce the cost and complexity of infrastructure equipment may be a very inefficient allocation of resources, and the resulting high cost of the endpoints could become a barrier to VoIP adoption and growth.
The most cost-effective VoIP network will balance the cost and functionality between core infrastructure equipment and CPE devices in such a way that a compelling and feature-rich user experience is provided at a price point accessible by a vast majority of the targeted subscribers.
Building up a VoIP subscriber base first means competing against services offered over the public switched telephone network (PSTN). As a result, VoIP service providers must provide as good as, or better services than those available on the PSTN. IP-based voice has matured to the point where it is on par with PSTN in terms of clarity and quality of the phone call. The support of high quality or wideband codecs in the system can result in a more superior "high definition" voice quality than is available with the PSTN. IP can also provide significant features and functions over the PSTN. If the capabilities of users' IP phones are severely limited because of very inexpensive handsets, the service provider is going to find it difficult to attract businesses to a VoIP service that has little differentiation over analog PSTN offerings. Competing solely on the basis of voice service quickly devolves into commodity pricing structures with unattractive profit margins.
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