VoIP Basics (4): Free Long Distance for Businesses

Last week, we introduced Session Initiation Protocol (SIP), which is a specific protocol that allows multimedia communications to be easily routed either to phone numbers or to any IP address. This week is all about SIP, how it makes long distance a cost of the past – for consumers – and how it makes multi-office business communications much, much more manageable.

Long Distance is a cost of the past.

When you use your cell phone that is with you in New York to place a call to California, the call is not being routed from New York to California, the carrier digitizes the signal and uses SIP to place a local call through a call box in California. Since the call is coming from the same area code, there is no long distance fee. Telecoms don’t pay long distance charges any more. They just like to charge us for it.

Multi-office businesses under one Private Branch eXchange (PBX)

The same flexibility of SIP allows SMBs to connect multiple offices under a single phone network.

Let’s say I have a business in New York, and multiple offices across the U.S. In the “old days,” if I wanted to use phone numbers at all of those locations, I would need to have a Private Branch eXchange (PBX) at each office, and then tie those offices together in order to 1) Have presences in those offices; and 2) Display area-appropriate phone numbers.

I still need a PBX for my business, but this is much easier to manage with SIP. Because: With SIP, I can have phone numbers anywhere in the U.S. I can connect my offices in Pennsylvania and California and Atlanta for free calls between offices, give them phone numbers with PA, CA and GA area codes. And because SIP allows me to connect via IP addresses, whenever I call a customer in Texas from the office in Pennsylvania, I can make the call behave as if it were coming from TX, giving me free long distance.

It’s all just phone numbers going to an IP address, and these can be routed to find the most cost-effective route possible, always.
The flexibility of SIP makes domestic long-distance a thing of the past for businesses that are willing to digitize their communications. But international long distance is a bit trickier. Join us next week for a crash course in how VoIP and SIP providers are trying to lower the cost of intercontinental communication today.