Circuits on an IP network can carry more traffic than circuits on a TDM network. Strategically, it costs significantly less to deliver calls over IP than it does TDM. The laws of economics are driving us inexorably towards VoIP. However there are a number of other benefits that are specifically useful for businesses.

TDM technology has evolved over a century and was primarily developed at the behest of the old nationalised post, telegraph and telephone companies (PTTs) such as the UKs GPO before it became BT. Therefore the TDM network is rigorously engineered and very robust. We take it for granted that when we pick up a phone and punch a dozen or so buttons, another phone will ring just about anywhere in the world. When that phone is answered, we (normally) have a clear and uninterrupted conversation. This is not surprising given that multiple layers of switches and wires between the two phones create a complete end-to-end 56Kbps circuit between them.

In the modern, highly flexible and mobile work space this marvel of technology has one drawback. You dont call a person, you call a phone. Therefore, you assume that the person you want to talk to is going to be close enough to that phone to answer it, or has put a machine in place to take you call, or is willing to pay extra for it to be forwarded to another device. Meanwhile, in an IP world, you connect to the network from any IP device and if you are connected to the internet, then the Internet can tell those trying to reach you where you are. VoIP will allow you to call a person, not a phone.

The other drawback of the TDM connection is that the circuit has a fixed bandwidth that was originally designed to support a phone conversation and nothing else. Dial up data communications and fax technology are essentially technical compromises. Anyone who struggled to surf the web over a dial up connection will recognise this. The essential technical difference between IP and TDM technology ensures that a VoIP conversation makes better use of that bandwidth. Furthermore, with the ubiquitous availability of DSL, the Internet is now a multi-megabit, broadband network that breaks free of the 56 kilobit shackles of the TDM network. The result is that we can have far richer conversations with IP.

These conversations can include video images, instant messages and data all over the same circuit. Voice over IP is but one application on this converged communications platform. Ebays acquisition of Skype is a good example of the creation a converged applications. Ebay is an on-line auction house that provides its bidders images and data about items for sale as well as conducting the auction over the web. Skype is an internet telephony service. Combined, the two businesses will offer a service whereby someone bidding for a particular item can click a button on the screen and talk directly to the person offering the item for sale. It does not take too much imagination to envisage similar applications driving improved efficiency and productivity across all shapes and size of business.

In summary, the three key advantages of VoIP over IP versus TDM are cost, flexibility and better, richer ways of communicating.