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To know what is VoIP Check out our article What is VoIp.

A new technology is always developed to erase the drawbacks of the previous one but somewhere that too has its own setbacks. Let us find out What are Advantages and Disadvantages of a hosted VoIP service and VoIP as a whole.

Advantages of VoIP:

VoIP phone service providers offer many advantages to the residential and small office/home office user. If you have a high speed internet connection then choosing a VoIP phone service might be right for you.

Low Cost :

This technology leads to greater financial savings. This happens because there exists only one network carrying the voice and data provided by only one supplier. If you have a broadband Internet connection (DSL or cable), you can make PC-to-PC phone calls anywhere in the world for free. If you wish to make a PC-to-phone connection, there's usually a charge for this but probably much cheaper than your regular phone service.

You can pay as you go or you can sign up with a VOIP service provider and pay a monthly fee in return for unlimited calls within a certain geographic area. For example, some VOIP services in the United States allow you to call anywhere in North America at no extra charge.

Low Taxes :

Since the calls are being carried over the Internet, governments have not heavily taxed VoIP phone services. Compare that to your local telephone bill (go ahead and take a close look) and you will see you are spending quite a bit on taxes each month. Therefore, choosing a VoIP provider could add up to significant savings for you and your family.

Portability :

One important concept to understand about VoIP is that unlike it’s forefathers (let’s call them PSTN for now), it is not distance or location dependent. As far as VoIP is concerned, you could be calling your supplier 1,000 miles away in Indonesia or calling your business partner on the other end of town, and it doesn’t make any difference at all, in terms of connectivity and cost.

You can make and receive phone calls wherever there is a broadband connection simply by signing in to your VoIP account. This makes VoIP as convenient as e-mail – if you are traveling, simply pack a headset or Internet phone and you can talk to your family or business associates for almost nothing.

No extra cables, no extra cost :

A VoIP phone number, unlike your regular phone number, is completely portable. Most commonly referred to as a virtual number, you can take it with you anywhere you go.

Even if you change your office address to another state, you phone number can go with you. Heck, you can even take your whole business with you wherever you travel.

Features :

Unlike regular phone service which usually charges more for extra features, VOIP comes with a host of advanced communication features. For example, call forwarding, call waiting, voicemail, caller ID and three-way calling are some of the many services included with VOIP telephone service at no extra charge. You can also send data such as pictures and documents at the same time you are talking on the phone.

VoIP phones can integrate with other services available over the Internet, including video conversation, message or data file exchange in parallel with the conversation, audio conferencing, managing address books and passing information about whether others (e.g. friends or colleagues) are available online to interested parties.

Flexibility :

When you choose a VoIP phone service provider, you will be sent a converter to allow a regular phone to use the VoIP phone service. Your phone number is programmed into the converter. This means that you can take your phone converter and phone number and use them wherever you travel in the world, just as long as you have access to a high-speed Internet connection. Because your telephone number is based in your converter (and not your home/office), you have the option of choosing any area code for your phone number. Some carriers will allow you to have more than 1 phone number in different area codes for a small additional fee (called a virtual phone number).

video-conferencing :

VoIP enables advanced bandwidth capabilities and improved video-conferencing and at a reasonable price.

Disadvantages of VoIP:

If VOIP is starting to sound really good to you, make sure you understand the following downsides as well.

No service during a power outage :

During a blackout a regular phone is kept in service by the current supplied through the phone line. This is not possible with IP phones, so when the power goes out, there is no VOIP phone service. In order to use VoIP during a power outage, an uninterruptible power supply or a generator must be installed on the premises. It should be noted that many early adopters of VoIP are also users of other phone equipment such as PBX and cordless phone bases that also rely on power not provided by the telephone company.

Emergency calls :

Another major concern with VOIP involves emergency 911 calls. Traditional phone equipment can trace your location. Emergency calls are diverted to the nearest call center where the operator can see your location in case you can't talk. However, because a voice-over-IP call is essentially a transfer of data between two IP addresses, not physical addresses, with VOIP there is currently no way to determine where your VOIP phone call is originating from.

Although many companies are making an effort to provide for emergency calls in their service, this issue remains an important deterrent against VoIP.

Reliability :

Because VOIP relies on an Internet connection, your VOIP service will be affected by the quality and reliability of your broadband Internet service and sometimes by the limitations of your PC. Poor Internet connections and congestion can result in garbled or distorted voice quality. If you are using your computer at the same time as making a computer VOIP call, you may find that voice quality deteriorates dramatically.

This is more noticeable in highly congested networks and/or where there are long distances and/or internetworking between end points.

VoIP Voice Quality :

VoIP has a bit to improve on Voice Quality, but not in all cases. VoIP QoS(Quality of service) depends on so many factors: your broadband connection, your hardware, the service provided by your provider, the destination of your call etc. More and more people are enjoying high quality of phone calls using VoIP, but still many users complain of hearing Martian, having to wait a lot before hearing an answer etc.

Security :

This one is the last in this list, but it is not the least! Security is a main concern with VoIP, as it is with other Internet technologies. The most prominent security issues over VoIP are identity and service theft, viruses and malware, denial of service, spamming, call tampering and phishing attacks.

Other:

The domestic customers have to use headphone to make and receive phone calls, which usually international. But this could be changed when analogue telephones will be brought up to serve the same purpose.

Conclusion :

All these disadvantages will be overcome in time. There is a tremendous amount of work being done to increase the reliability and usefulness of VoIP. By 2008 most of the kinks will be worked out and VoIP will receive widespread consumer acceptance.