Living in Dunlop I have a limited choice of broadband providers. I could not go with a particular provider which could have also provided cheap phone calls bundled with the internet connection. However, after speaking with a friend they said I could buy a phone which uses my existing broadband connection to make cheap long distance calls. Is this possible?

You are correct that your broadband connection can be used to make phone calls, often at cheaper rates than landline charges. The reason that phone calls using broadband (or Voice over IP services) are cheaper is because they use the internet to route voice traffic. Using a normal landline telephone, your voice is routed through the public switched telephone network (PSTN). This is known as a “circuit switched network” where you need a dedicated circuit (line) between the two parties on the phone, and you have exclusive use of that circuit during your call. This is a relatively “expensive” process, since you need a dedicated circuit for each call, which are often over vast distances (in the case of long distance calls).

In contrast, when using VoIP the voice traffic is transmitted over the internet, so instead of the telephone provider having to use a dedicated PSTN circuit between parties the voice traffic can instead travel the distance over the internet. As an example, if you called Perth from Canberra using landline phones you would need a physical circuit between the two cities. In contrast, using VoIP the voice traffic would enter the internet in Canberra, travel over the internet to Perth, and then exit the internet back onto the PSTN in Perth. As you can see, this cuts out the need for a PSTN circuit between Canberra and Perth. Since internet is a much cheaper transport mechanism than the PSTN (since multiple callers can share the available bandwidth, as opposed to having a dedicated circuit for each caller) this makes VoIP calls cheaper. This benefit also translates to even more savings for international calls.

The major factor with VoIP is quality of service (QoS), as the quality of the voice call can degrade or have other quality issues (such as delay or echo) due to it being transmitted over the internet and thus subject to internet traffic bottlenecks and performance issues. That said, there have been vast improvements in QoS for VoIP traffic, and if you can save large amounts of money, and are willing to cope with the occasional quality hiccup, then this is certainly a trade-off worth considering.

There are several companies which provide VoIP telephone services for home users. There are two broad flavours of VoIP. First, there are services which use your computer. These are called ?soft-phones? and consist of software which runs on your computer and allows you to make and receive calls on the computer. Obviously, this requires you to connect a microphone and speakers to the computer (or a headset) to make the phone calls. Companies which provide such services include Skype (www.skype.com.au). Of course, the big disadvantage of this is that the computer must be left powered-on to make and receive phone calls, which can be an inconvenience. A second flavour of service is standalone VoIP services which do not require a computer. These normally consist of a box which plugs into your broadband connection, and you can then plug a normal phone into the box to make and receive phone calls. In such a setup you will also need a broadband router, as this will split the broadband connection and allow you to share the internet between your computer and VoIP phone system. If you don’t already have a broadband router, most VoIP providers sell such devices which are optimised for their system. One such provider is Engin (www.engin.com.au), and it may also be worthwhile checking your ISP to see whether they offer a VoIP service which can bundle with your internet.