VoIP Vs Cell Phone - Research Paper Example

?VoIP Vs Cell Phone The paper in question begins with tracing the history behind the emergence and development of Voice over Internet Protocol (VoIP) technology. It also makes a brief analysis on the historical development of the cell phone industry and market. After hinting on the emergence and development of both the communication technologies the paper divulges on the operational patterns of both the technologies and endeavors to make a comparison thereof. The paper moves on to make individual researches on the social impacts of VoIP and mobile phone usages. Further research is conducted on the impacts of the development of VoIP over the existing telecommunications industry focusing on the mobile and land phone operators. A comparison is also drawn on the parameter of benefit earned over the cost incurred with regards to both cell and VoIP phones. Finally the paper concludes by drawing a summary on the research made by providing fruitful suggestions thereof. Table of Contents Introduction…………………………………………………………………………….3-4 Mechanism of working and quality of service…………………………………………..4-6 The Impacts on business and the society………………………………………………..6-10 VoIP and smart phones impacts over cell phone and telecom companies………………10-19 Cost and Benefit analysis…………………………………………………………………19-20 Recommendations…………………………………………………………………………20-21 Conclusions………………………………………………………………………………...21-22 Introduction Brief History of VoIP The development of VoIP or Voice over Internet Protocol is considered as a major breakthrough in the field of Internet communication technology. The use of VoIP technology has enabled the transmission of vocal data from one source to another by through the Internet Protocol dimension. It works through the system of conversion of voice data into a stream of digital signals that gets transmitted through the medium of Internet technology. The history insights into the development of VoIP technology can be divided into three parts viz. technological, economical and cultural. Technological history shows that VoIP process first came into existence after the innovation of ‘Internet Phone’ application by Vocaltec Incorporation in Israel during February 1995. Development of the internet phone application helped the users to communicate to each other through the integration of computer, internet and voice modulators. However, to make the VoIP process useful the existence of the ‘Internet Phone Software’ was needed at both ends i.e. the speaker and the receiver. However with the advent of 1998 the development of hardware technology spread the use of VoIP in computer to telephone and telephone-to-telephone networks. VoIP process in the context of modern period has totally revolutionized the field of communication technology in terms of voice clarity and economy of use. This present day notion of VoIP has brought a cultural modification in many companies shifting over to the use of the innovated process. Development and expanded use of VoIP technology caused many telecom companies to mushroom out to economically cater to their client’s call needs. The telecom market for the dearth of proper administrative regulations became populated with many such small telecom companies competing against each other. Telecom giants like Telco mostly managed these companies. (Hallock, 2004, pp.4-11; VoIP: Voice Over Internet Protocol Architecture and Features, n.d., pp.14-15). Brief History of Cell phone The history of mobile or cellular technology goes far beyond than what has been recorded for. Use of mobile phones was restricted to the business and governmental societies during the period of the 1970s. Thus the common man had no notion about the cellular technology for being devoid of its access. The old models of cell phone were backdated both in terms of design and their ability to connect to wireless networks in a successful manner. They were mainly huge devices, which were difficult to be ported in pockets and purses. However during the 1990 period the use of cell phones gained further popularity with the development of wireless communication and emergence of global companies. The passing down of periods made the emergence of large number of companies competing in the cellular phone market. This increase in competition made the market grow from three to thirty billion and also broke free from the niche consumer segment. Modern cellular companies are characterized for their economical plans and tariff rates along with easy accessibility, which makes them affordable for normal uses (Aranda, 2005). Development of the mobile technology market has led to the innovation of concepts like 2G and 3G to expand the use of mobile telephony. The operator companies for the mobile devices provide the users with a strong network base to help them avail the benefit of such gadgets (Black, 2009, p.121). Mechanism of working and quality of service How does VoIP Work? The working of the Voice over Internet Protocol process involves a composite set of actions where the voice of the caller party is compressed to form digital packets to be transferred from one end to another via the Internet medium. The compressed digital packet transferred to the other end gets decompressed into original voice medium to be understood by the receiver of such calls. Moreover the working of VoIP process has a very strong linkage to the system of Internet communication. The uses of broadband devices are increasingly made to transfer telephone calls from one party to another in the VoIP process. VoIP process functions though the use of a router installed by the user, which transmits the call signals through the Internet medium by the creation of digital packets. This process is enabled through the availability of a ‘VoIP Gateway’ which both transfers the voice signals to digital form and vice versa for being understood by the receiver on phone at the other end. The emergence of the VoIP process has in fact created a seamless environment of communication technology based on both telephone and Internet medium. The working medium of the VoIP process has also enabled the development of Internet Protocol programmed telephonic network, which readily transmits the voice to digital signals to be transferred along the Internet medium. This has made the process quite economical. Communication through the use of only computers enabled through VoIP requires the installment of microphone system and sound card along with Internet availability. This process is also economical except the cost of Internet charges on a monthly basis. (How does VoIP Work? n.d.; Atkinson, 2007, pp. 81-82). How does Cell Phone Work? The modern cellular devices or mobile phones are updated with such units that transform these gadgets into small microcomputers. The entire mobile handset gets divided into composite parts like speakers, keypads, display units and an innovated circuit network enabled with micro processing units that transform the mobile handset to a small computer. This composite network enables the mobile handsets to make connectivity to different phones or computer units round the globe conferring efficiency in terms of technology and cost. Further the modern cell phones have inbuilt software to receive fax messages and also to communicate via the Internet plane. It has also opened the doors to various multimedia options like playing games and making and viewing videos. Cellular devices like the old walkie-talkies communicate based on transmission of radio signals on a worldwide basis. The operational activities of the cellular network divide an entire zone into small units known as cells. Dimension of a cell varies along to constitute a number of cities and extends to a maximum area of around 250 square miles. The cellular devices are enabled by the network operators to communicate efficiently within the specific geographical or cellular area possessed by it through the development of radio signals identifying the particular area. Hence a number of mobile users can communicate independently in the same geographical limit using the same network service. The cellular devices are powered by the existence of a wireless antenna, which helps the mobile user connect to other cellular and Internet devices. The switching on of a mobile phone helps transmit radio signals to the service provider’s network, which after verifying some useful information grants connectivity. While making a call to a landline phone system the radio signals of the cellular devices are transferred by the wireless network service provider to land line dial system. Voice signals are transferred to digital signals through the use of binary technology to enable faster communication. (How does a Cell Phone Work? 2011). The Impacts on business and the society The Impacts of VoIP on business and the society The extensive use of Voice over Internet Protocol in case of business operations helps in gaining better efficiency with lowering the cost factor. Business houses through the use of Internet and VoIP processes can connect and make calls much faster and in a cost efficient manner than that in the use of telephonic systems. The most efficient factor for the use of Voice over Internet Protocol in case of conventional telephonic systems is the event of high savings. Use of telephonic systems entails much cost for the business enterprises for firstly the different installment charges along with the differential tariff rates charged by the different telephone operators. However, the use of VoIP process helps the business units to make communication through the same web medium used by the business house to address mails and business queries. Observation made shows that unlike telephonic communication the charges for both local and international calls are somewhat the same in case of VoIP processes. Apart from enabling calls through the Internet medium the use of VoIP process in the business also helps in reducing the installment expenditure through the setting of a common plane for maintenance of voice and information generation networks. The use of VoIP processes in addition to the above factors of cost savings also help the user in generating a more efficient mobile network. Through the use of VoIP processes the user firstly need not hold on to any other additional number or gadget but can make use of the same office number while being mobile. Secondly the use of Voice over Internet Protocol number also saves the user from making adjustment for roaming charges which otherwise becomes a costly factor (Moran, 2005). However the use of VoIP process renders greater amount of security threats like malware and virus attacks for the extensive use of internet technology. This may disrupt important business calls and make the system paralyzed. (Pedal, 2007). The integration of VoIP processes in business network has further modified the customer relationship paradigm of the business environment through the integration of telephone and Internet connections. Thus the business relationship with the customers is further enhanced for enhancing the connectivity patterns (McFadden, 2004). The social impacts of Voice over Internet Protocol processes can be best observed with regards to the developing economies like Nigeria. The development of VoIP process has enabled the Nigerian people to easily switch over to new forms of communication technology based on Internet processes rather than to depend on telephonic models. This has helped in making communications easier and faster. However, this transition to developed forms of communication technology did not evoke an additional cost on the poor economies. Rather it helped in countering additional savings for the people who had taken resort to VoIP technology. Further despite the fact of technological hindrances associated with use of Internet communication like security paradigms and shortage of power in Nigeria the educated persons were observed to depend more on VoIP enabled processes. The VoIP processes being free from administrative policies and regulatory mechanisms help in generating employment for the local communities which in turn helps in reduction of poverty (Clark, 2010). The use of VoIP processes has helped in the development of the educational environment. Use of Internet technology in the cellular medium can make the event of video and audio conferencing a reality in which students can develop their learning abilities in a virtual classroom environment. (Saxena, Jasola & Sharma, 2006, pp. 37-38). The Impacts of Cell phone on business and society The development of mobile or cellular technology has helped in the growth and integration of the business hemisphere spread along different quarters of the world or of any particular region. In fact the use of mobile communication has helped the sales and marketing team of an organization to track the activities of its different employees busy operating in the different territories assigned to them. This also helps in reducing workplace congestion and spreading activities along a diversified base. Further the use of cellular technology also helps the business environment to keep a close touch with its employees even after business hours to help them relate any problem, which could not have been explained within office. Thus it helps in extending a personal touch with the employees. The communication using cellular network can also be shortened in the form of text messages, which helps in reducing the disturbances in the personal lives of the people. The strong business and personal linkages made with the employees helps in enhancing the parameter of business productivity (Hewitt, n.d.). The perception of different class of people in the working population varies with regards to mobile usage. The people working as clerks and other laborers figured that it would be comfortable to work in an atmosphere devoid of mobile phones. However, the people belonging to the higher hierarchy level in the organizations like managers and other businesspersons expressed the feelings that it would be cumbersome to work without the use of mobile in business. Moreover the women working population in comparison to the male working population also stated that it would be better working in a mobile phone free environment (The Impact of the Mobile Phone on Work/Life Balance, 2007, pp.20-21). The advent of mobile communication has impacted the social sphere in a great way. The nature of social interaction has earned a new dimension with the growth of mobile operators and different type of cellular devices. Moreover the new mobile phones have come out from the shell of being only telephonic devices. In fact large number of multimedia applications has been tied up with the mobile phones which have successfully lured the young minds like that of teenagers in making purchase of high priced models. Moreover to send messages and greetings people also use the mobile phones, which have changed the face of the social media. Development of camera phones has enabled the production of videos and capturing of still images through the use of mobile phones (Ling, 2004, pp.21-22). However the extensive use of mobile devices also renders some negative impacts on the environment and society at large. The growth of mobile operators in different regions has led to the construction of huge mobile antennas destroying the aesthetic looks of the buildings and the local environment. Further the growth of mobile usage has also triggered the issues of newer dimensions of social behavior about mobile usage in public spaces. Apart from the above factors the continuous amount of conversations conducted using the mobile telephone is considered to render harmful side effects to the human health. The effect of the strong electromagnetic fields produced by mobile phones is considered to render side effects like loss of memory and other types of psychiatric problems. The teenage population busy conversing and playing games or listening to music or mobile phones are gradually becoming socially alienated. This raises an issue of concern (The Social Impact of Mobile Telephony, n.d.). VoIP and smart phones impacts over cell phone and telecom companies The emergence of Voice over Internet Protocol process is observed as an upcoming threat to the existing players in the global communication industry. The users groups pertaining to the VoIP based process in the earlier periods were restricted to the use of internet for chatting online using audio technologies like installation of microphones. However with the use of broadband technology the usage of VoIP has crossed far flung limits enabling the users to conduct calls over the internet at reduced costs or at times totally free. The impact of Voice over Internet Protocol (VoIP) is eating up the market for mobile phones for the use of VoIP process itself indicates the incorporation of both Internet and cellular communication technology. Furthermore the introduction of VoIP enabled communication utilities is priced competitively to enter the customer mindsets and usage patterns in an easy manner. The use of VoIP enabled communication systems have helped many business houses to reduce the incurring of huge amount of telephone bills. Smyth Solutions, a staffing and recruiting company based in New Jersey through the use of VoIP processes has become able to reduce their telephone bill expenditure for long distance calls from $100,000 to $80,000. Expectations are made that the growth of VoIP market which one the one hand is triggering to embrace around 16 percent of the America’s households can contribute to a downfall of around $8 billion of the traditional telephonic market. Furthermore the VoIP services are continually developing themselves to cater to the multimedia needs of its user groups through the incorporation of features like video production and development (Dess, n.d.p.283). The introduction of smart phones has helped the market for mobile phones to grow at a rapid pace. Estimates show that the market for mobile phones during the final quarter of the 2010 period is reported to grow by around 18 percent in comparison to the previous year. The shipment made by vendors reflect that during the fourth quarter of the 2010 period the total number of shipments made were 401.4 million units as against 340.5 million units which were shipped during the final quarter if the 2009 period. Eyeing the total amounts of shipments made it is observed that for the total 2010 period the vendors have conducted shipments of the amount 1.39 billion units which were around 19 percent higher than the total number of shipments made during the 2009 period of the order 1.17 billion units. The above figures reflect a revival of the market conditions, which reduced by 1.6 percent during the 2009 period. It is expected that the emergence of the Smartphone would help trigger a huge growth in the cell phone market by the close of 2014. Eventually the market for Smartphone is also expected to grow by around 44 percent during the full tenure of 2011. Evolution of the Smartphone also impacted the growth of sales of the different mobile companies like Nokia, Samsung, LG, and Apple among others. The growth in the number of mobile handsets shipped along the fourth and final quarter for Samsung grew from 68.8 units during 2009 to 80.7 units during 2010. The shipments quantity for Apple phones also grew from 8.7 units during 2009 to 16.2 units during 2010. However, for Nokia the number of shipments got reduced by a 2.4 percent, which was mainly attributed to the growth of intense competition of high definition phones and the fall in supply of such. Despite this the Smartphone market for Nokia grew at a fast pace by 38 percent during the final quarter of 2010 as compared to the sales figure of the 2009 final quarter. Another world leader in the mobile telephony market LG though recorded a reduction in the number of shipments made during the final quarter of 2010 as against that of 2009 expressed a sense of optimism. The LG Management remarked that due to the emergence of its Smartphone, Optimus One the sales of the final quarter ranked greater than 30 million. Thus, the company expects that by the close of 2011 the sales of its mobile phones would reach far-reaching boundaries (Goldstein, 2011). The above discussion can be further depicted in both graphical and tabular form as follows. (Goldstein, 2011) Both the graph depicts that how the level of shipments for mobile phones has increased for the different vendors along the two periods 2009 and 2010. This rise in the number of shipments owes its effect to the emergence of Smartphone, which has helped in attracting the minds of different consumers. Following this would be a tabular presentation of the changing shipment patterns of the different mobile companies and correspondingly in their market shares along the periods of 2009 and 2010. Shipment Pattern of Different Vendors along the Fourth Quarter of the 2009 and 2010 period Period Shipments of Vendor Companies (Million Units)   Nokia Samsung LG Apple Others 4th Quarter of 2009 126.8 68.8 33.9 8.7 92.8 4th Quarter of 2010 123.7 80.7 30.6 16.2 133.4 (Goldstein, 2011) The above information would be graphically represented as follows. (Goldstein, 2011) The same analysis of the shipment pattern of these mobile companies is carried out for the total period of 2009 and 2010. Shipment Pattern of Different Vendors along the periods of 2009 and 2010 Period Shipments of Vendor Companies (Billion Units)   Nokia Samsung LG Apple Others Total Period of 2009 431.8 227.2 117.9 34.5 333.5 Total Period of 2010 453 280.2 116.7 48.8 437.7 (Goldstein, 2011) The above tabular data can be graphically represented as follows. (Goldstein, 2011) This event of change in the shipment patterns of the different telecommunication companies also got reflected greatly in the market share positions of these companies. The same would be reflected both in tabular and graphical form as follows. Market Share of Different Vendors along the Fourth Quarter of the 2009 and 2010 period Period Market Share of Vendor Companies (%)   Nokia Samsung LG Apple Others 4th Quarter of 2009 38.3 20.8 10.2 2.7 28 4th Quarter of 2010 32.2 21 8 4.2 34.6 (Goldstein, 2011) Below given is the Pie-Chart representation of the market share positions for the different vendor companies along the Fourth quarter of the two different periods 2009 and 2010. The Pie-Chart helps to draw a comparison of the rise and fall in market shares of the different companies along the given time duration. (Goldstein, 2011) The same market share analysis of the vendor companies is also conducted on the basis of the total period of 2009 and 2010. Market Share of Different Vendors along the periods 2009 and 2010 Period Market Share of Vendor Companies (%)   Nokia Samsung LG Apple Others Total Period of 2009 37.7 19.8 10.4 3 29.1 Total Period of 2010 33.9 20.9 8.7 3.7 32.8 (Goldstein, 2011) The above tabular representation can also be shown in a graphical form as follows. The above information has been represented in the form of Pie Chart showing the comparisons for market share of the different vendor companies along the periods 2009 and 2010. However, it is observed that both during the Fourth Quarter analysis and also in the analysis given for the total period of 2009 and 2010, Apple constitutes the least market share among the other three prominent companies, Nokia, Samsung and LG. It is because Apple mainly caters to a niche market segment of iPhones whose demand specifically can be observed in the developed countries. (Goldstein, 2011) (Goldstein, 2011) The development of iPhone applications like Viber has rendered some specific impacts in the field of mobile communication. Like other VoIP phone applications, Viber also reflects some distinct advantages and disadvantages. Speaking of its advantages the mobile application, Viber does not demand the requirement of a new registration to be done. Rather the mobile contact number of the user is treated as the username in Viber software. However, the use of the Viber application suffers from a specific disadvantage. The application works in the condition that other mobile user with which the Viber user desires to make contact have also are registered users of Viber. Viber however earns support for helping in receiving telephone calls even if the application is carrying on in the system. It also supports the mobile gadgets having other applications like Bluetooth. (Viber-Another VoIP Mobile App launches on iPhone, 2010). Further the development of iPhone applications like Fring has made the call environment of VoIP phones totally free. In fact the use of Fring software has enabled the VoIP phone users to conduct free chatting, messaging and calling activities with other mobile networks and phones for totally free. This application for VoIP phones earns its credit for being specially constructed for portable devices like mobile phones. Further the use of Fring application not only helps the user to make free calling and chatting sessions with other users on computer but also helps in generating free calls to other mobile phones. Moreover the Fring software works in a friendly manner with VoIP applications like Skype installed in mobile phones. The Fring software easily works on different types of Smart phones. However, mobile users making use of Fring application cannot make free calls to landline phones or talk in a free mode in roaming position. They ought to be charged though on a reduced rate compared to other mobile phone users. Again, the use of Fring in mobile phones puts a greater stress on the phone battery than that in normal positions. (Unuth, n.d; Blau, 2007). Like the above VoIP phone applications developed overtime like Viber and Fring another software application, which has gained, considerable popularity is Skype. The reason for its huge popularity is like Fring the software helps its user base to save a lot on telephone bills. Users of Skype software can communicate with other users of the same software spread along local and international basis and that too without any cost. However, the cost of initialization of the Skype application is quite huge. It is because the application only works on a Wi-Fi or on a 3G handset. The cost of possession of these sets is quite large for average mobile users. Other mandatory requirements for successful installation and execution of Skype in mobile phones are existence of memory storage capacity of 12 Megabytes and an efficient data plan for 3G mobiles. (Unuth, n.d.). Further the installation of Skype software renders further voice and sound clarity to mobile users. It is also considered to be more secured software than other VoIP applications. The enhanced use of Skype is observed to cause the reduction in the subscriber base of telephone services as mobile users using Skype can make such calls totally free which is not possible in standardized environment. The telecommunication service providers again in order to retain the large amount of subscribers would focus on reduction of tariff rates that are expected to cut the telephone bills. This reduction in tariff rates would hugely impact the revenue parameters of the service operator companies leading to huge fall in the profitability figures. In United States of America the rates for long distance calls came down to $0.24 per minute during 2008 from $0.48 per minute during 2003. Correspondingly, the revenue figures amounting from long distance calls came down $3,351 million during 2008 from $3,788 million during 2003. The above events owe their happening to the employment of Skype on an enhanced basis in mobile phones (Impact of Skype on Telecom Service Providers, 2005, pp.5-7). The above information can be graphically represented as follows. (Impact of Skype on Telecom Service Providers, 2005, pp.5-7) (Impact of Skype on Telecom Service Providers, 2005, pp.5-7) Thus the induction of Skype has largely impacted the operational and revenue parameters of the telecom service providers in developed economies like America. Cost and Benefit analysis Cost Benefit Analysis of VoIP v. Cell Phone The implementaion of VoIP in business helps to reduce the telecommunications cost to a great extent. Users of VoIP software can extensively use the broadband for making calls to other users working on computers or to other mobile handsets at little or noc cost. This reduces the effect of telephone bills on increasing the operational cost of business. Further the service poroviders of VoIP enabled services also happen to charge very little or at times gives free services in generation of caller identification numbers and in providing benefits like automatic redialing. Moreover the local area calls using VoIP software are generally kept free wherein the users of such services can make its increased use through activities like video conferencing. Activites like video conferencing enabled to the large and small companies helps them to reduce the cost of touring. Through video conferencing many companies can make contacts on a broad sphere with other branches and competitors spread internationally. (Mce, 2008). The mobile phones of the modern era are upgrading their options to provide the best benefits in the light of increasing cost of handsets. However in the light of cost benefit analysis the use of mobile phones increases the call expenditures of the people through the addition of cost factors in the several functions rendered by it in the form of calls, messgaes and internet surfings. Moreover, the extensive use of cell phones also spreads the chances of increased health and enviroenmntal costs which is quite minimal in case VoIP phones. VoIP phones also generate free calling and messgaing service unlike the mobile phones. (Masroor, n.d.). Recommendations The analysis of the growing market for Voice over Internet Protocol (VoIP) over the existing cellular phone market has been done through conducting research on its impacts on the business and social sub-systems. Impact over the business is studied through its diversified effects rendered on the mobile companies and network operators in terms of their market shares and sales and revenue paradigms. However, the scope of the research could have been further enhanced if the analysis incorporated the use of PESTEL factors or the macro-economic variables of business. The development and functioning of the VoIP software studied in the light of Political, Economic, Social, Technological, Environmental and Legal factors would have generated a hollistic understanding of the returns and benefits that are accruing alongwith the constraints that are emerging in the employment of VoIP in a region. Conclusion The VoIP or Voice over Internet Protocol is a major breakthrough in the field of telecommunications. The emergence of the VoIP software integrates the elements of internet and phone technology to transmit voice messages over the digital plane with little or no cost. Thus users of VoIP software can make calls, messages, and even chat or conduct video conferencing functions through the use of broadband medium. The major advantage obtained by the VoIP users is conducting these activities in a totally no cost environment where it would have put enourmous cost effects on the using population. Further with the advance developemnt of several applications the mobile companies and other network operators are viewing a large sales of mobile handsets in both developed and developing economies. This has also helped such companies to build in larger market shares in both national and international markets. However, on the other hand the development of special applications based on VoIP technology enabled phones like Skype, Fring and many others have eaten up the market for general network operators for mobile or land phones. Users having access to such application enabled hand sets can effectively make calls along long distances with little or no charges. Hence the number of subscribers for the network operators is gradually decreasing. Hence, standard network operators in developed economies like United States are facing the threat of curbing down the tariff rates to maintain the optimum level of mobile and telephone subscribers. This activity of theirs is countering impact on decreasing the revenue of such firms. The use of VoIP software for a business confers major benefits in lowering the huge amount of telephone bills. Further the cost of business tours is also saved through the activities of video conferencing enabled by the VoIP technology at zero rates. Reference 1. Hallock, J., (2004), “A Brief History of VoIP”, Retrieved on February 3, 2011 from: http://www.joehallock.com/edu/pdfs/Hallock_J_VoIP_Past.pdf 2. Voice Over Internet Protocol Architecture and Features, (n.d.), Lulu.com 3. 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