Voice over IP is becoming the standard for how all voice calls are delivered, including landline calls. However, VoIP is still not well understood. Johanna Egar explains

Fewer than half the calls Spark customers make now go over the traditional PSTN (Public Switched Telephone Network) telecommunications network, says the telco. It is moving to a new IP-based voice network. Despite this major move, there is confusion about what VoIP (Voice over Internet Protocol) is and what it means for people and business.

Our decades-old copper PSTN is being replaced by the Ultra-Fast Broadband fibre network that is being rolled out across New Zealand. This roll-out means many voice calls will be delivered over fibre. These have to be VoIP calls because UFB is digital only. Spark’s new IP-based voice network – the Converged Communications Network (CCN) – is also digital only. The IP part of VoIP stands for Internet Protocol. In other words, the signals are digital.

But what is VoIP and what is it good for?

When you make a voice call using a traditional telephone on the copper network, it is sent as analogue signal. Modern IP networks are digital, they deal with data which transmits as a string of 0s and 1s. VoIP converts analogue voice signals to digital.


Codecs handle the conversion. The term is short for coder-decoder. A codec is a piece of software that converts analogue electrical signals into digital ones. Converted signals then travel over the internet as a data stream, like everything else. Codecs are used in analogue telephone adapters called ATAs (or VoIP adapters) that are now widely available. Some ATAs also allow fax machines and pagers to work with VoIP systems too.

To your computer and to the network, your VoIP call looks the same as an email you sent earlier.

VoIP calls often travel over the public internet. They can also go through private IP networks. Call quality varies on the public internet as, in general, you have no control over what happens between you and the destination. By contrast, call quality can be of a guaranteed standard on private IP networks.

Delivering voice in data packets is far more cost efficient than sending it in analogue form. That’s because you don’t need to maintain a constant connection. So a VoIP call uses less bandwidth than a traditional analogue call. Instead, the data packets use routers and travel on the internet.

While packet switching, as it is termed, is more efficient and cost-effective than traditional call transmission on the PSTN, there were early issues with call quality. It could be bad at times. In recent years, these problems have been largely ironed out. Nowadays, provided enough bandwidth is available, call quality is usually good.

other business cost savings

VoIP can save on business costs in other ways. Because calls are sent as data packets from one computer router to another, they don’t need a dedicated phone line. Skype, which is a type of VoIP service, took advantage of this early on and undercut traditional call rates – especially international ones – by a considerable margin. The price gap has narrowed in recent times. However, there are now other VoIP for business services that offer call rates cheaper than traditional ones.

There is also the flexibility that comes with VoIP. If a business moves or expands, it doesn’t need to add new physical phone lines. All that’s needed is more bandwidth and a software update. If you want to add more phones and related services like, say, instant messaging, that’s also only a software update. Adding new hardware is difficult and expensive with PSTN-based telephone systems, and, being analogue-only, they are also restricted to voice.

Some VoIP services use handsets – these look like everyday cordless phones and are often the same – but a handset isn’t always necessary. For example, Skype is a VoIP service and it can use either a Skype-compatible headset or your computer’s microphone.

VoIP does have drawbacks. Historically, as already mentioned, the most notorious was call quality, with call drop-outs, jitters and latency being common in the early days.

Installing a full VoIP business service involves higher set-up costs than buying a simple PSTN service. But where the PSTN really scores is on reliability as it is largely unaffected by power outages and internet issues. For instance, if there is a local power cut that doesn’t affect telecom cabinets and exchanges, the PSTN service will carry on working as normal. A VoIP system will not.

This is why many companies retain a conventional telephone line for those services that need to be very reliable, such as alarm systems, fax services and elevators that are connected to a monitoring agency.

the unified future

A major plus with VoIP services is that they can grow into something much bigger: unified communications. Because VoIP allows more than voice and can work with other data, it has many other uses. Notably, it is now being used to deliver telemedicine to remote parts of Vietnam. This service is being delivered as a cloud service that packages up email, instant messaging, conferencing and voice. This kind of consolidation would not be possible at all without VoIP technology.


Spark is keen to embrace VoIP as it sees it as the telecoms future. Earlier this year, Spark announced it had completed the first phase of its transition from its old PSTN copper network to a new IP-based network, the CCN (Converged Communications Network). This will handle landline, mobile and other wireless calls.

Colin Brown, who is leading Spark’s evolution to the CCN, says the landline as we know it will change as a result. But this may not be that noticeable to many users. “Phones will still have a normal dial tone, connect to voicemail and act very similarly to the phone you have today.”

This is especially the case if you already use a wireless phone, as these are very similar to VoIP phones and can often be used as VoIP phones. An old-fashioned landline phone will need to be replaced though.

One drawback with the move to fibre and wireless broadband networks – from the old copper PSTN – and to VoIP calls, is the need for a battery back-up for your mobile phone.

Brown says that “in a disaster, a mobile service will likely be brought back up faster than a landline service. But even today’s wireless handsets need power to operate. Only old-fashioned phones don’t, so there is a bit of a shift.”

Brown says the new CCN network will also eventually enable Voice over 4G. This will provide a dedicated voice connection, enhancing mobile calls so they are more like traditional high-quality voice calls but are seamless too. “4G will be integrated into your dialler, so when you hit ‘Call Mum’ it will activate straightaway, rather than you having to go into a different application.”

Transition to the CCN network is well in hand, adds Brown. A hundred of the old PSTN switches have now been turned off – out of 680 – and customers are being steadily moved to the CCN.