VoIP or Voice over Internet Protocol is a service that enables businesses to make and receive calls over the internet. VoIP has been in use for the past two decades. However, it caught pace only in the last decade.
Between 2010-2018, residential VoIP lines increased from 28 to 76.6 million, while business VoIP lines jumped from 6.2 to 41.6 million. And the growth is not going to stop anytime soon.
A Brief History of VoIP Technology
Before we get to the future of VoIP services, let’s first learn about its history.
VoIP was introduced in 1995 to save money on long-distance and international telephone charges. A company named VocalTec launched the first internet phone for the masses. It allowed users to call another user over the internet through the microphone or connected speakers, using the same software.
The company spent the next two years working on improving the VoIP technology, adding voicemail applications. They also paired with Microsoft NetMeeting. In 1998, VocalTec introduced computer-to-computer and phone-to-phone calling features in the VoIP system.
In 1999, a company named Teledvance (that became Smoothstone IP Communications and eventually Intrado) was formed to take VoIP to the enterprise industry. The company aimed to add robust features, capability, and reliability to the VoIP system.
Initially, VoIP adoption was as low as 1% because users had to listen to advertisements before, during, and after the conversation. However, by 2003, 25% of all voice calls were VoIP. The rise in broadband Ethernet services gave the VoIP industry a boost by improving connectivity and call quality.
That was the same time when Skype launched its beta software, allowing users to call mobile phones and landlines.
VoIP Market Size: Now vs. Predicted
The global VoIP market was valued at $46.9 billion in 2020 and is projected to reach $183.7 billion by 2027. The industry is expected to grow at a CAGR (Compound Annual Growth Rate) of 21.5% between 2020-2027. In the US alone, the VoIP industry generated a revenue of $14.1 billion in 2020.
As of 2020, there were 204.8 billion corporate VoIP subscribers globally. The projected mobile VoIP users are predicted to reach 3 billion by 2021. Computer-to-phone VoIP services will experience the highest market growth between 2017 and 2024.
The Asia-Pacific region will play a vital role in the VoIP industry’s growth, especially in China and India.
Reasons Behind the Growth of VoIP Industry
The VoIP market growth is driven by the efforts taken by government agencies and private companies to develop wireless communications infrastructure. Here are some more reasons the VoIP industry is growing at such a rapid pace.
1- Lower Costs
One of the primary benefits of VoIP is that it is cost-effective. It does not require you to purchase expensive hardware or dedicated telephone lines. All you need to do is subscribe to a reputed VoIP provider and start managing business calls.
Besides, adding new phone users also does not require you to purchase additional hardware or telephone lines. Just upgrade your VoIP plan, and you will be good to go.
You also don’t need to take care of maintenance. Your VoIP provider will keep the software up-to-date while regularly upgrading the features.
2- Better Features
These features help you better understand your customers’ expectations and improve your services. You can also use call recordings to coach your agents to better meet your customers’ needs.
3- Global Access
Leading VoIP providers like CallHippo allow you to connect to your global customers at a minimal cost. Besides, within the CallHippo software, you can check the exact time zone, country, date, time, the validity of the numbers to increase your chances of success.
4- Highly Reliable
One of the most common concerns of switching to VoIP is that if your internet goes down, you would be without a phone. However, that’s not the case. In case your office’s internet is down, you can forward calls to mobile phones and other devices.
And as mentioned above, VoIP providers take care of maintenance and upgrades, so you won’t have to worry about the system going down.
5- Can Be Set Up In Minutes
VoIP systems don’t require any hardware to make business calls. All you need is an internet connection. So, you can set up your phone system within minutes and start making calls.
6- Highly Scalable
As your business grows, you will add more users to your business phone system. In the traditional method, you will have to purchase physical phones and install additional wires in your office. However, with a VoIP system, you just need to upgrade your subscription and add more users.
7- Easy Integration With Other Business Systems
Modern VoIP software allows you to integrate it with other critical business systems, including CRM, sales, helpdesk, and ERP. Doing so enables you to get a holistic view of your business workflows and improve them.
8- Better Agility and Flexibility
VoIP technology provides the much-needed agility, freedom, and collaboration that companies require to perform their day-to-day operations efficiently.
VoIP enables businesses to use their smartphones to make and receive calls. This means, unlike traditional business phone systems, agents don’t necessarily need to stick to their desks.
Another advantage of VoIP is that external factors like power outages don’t affect the business’s ability to make and receive calls. Until you have an internet connection, you can connect with your customers over the phone.
5G and VoIP
The internet powers VoIP! When high latency occurs on a 4G network, calls drop out. In fact, 39% of businesses reported losing their telephony service in the past 12 months, costing as much as $33,000 per hour.
The growth of 5G seems promising to the VoIP industry. It will ensure faster connectivity, low latency, enhanced call quality, and improved global coverage.
4G has a latency of 10ms, while 5G will have less than 1ms. In terms of spectrum, 4G has 3 GHz while 5G will have 30 GHz. Similarly, 5G has better connection density (1 million connections per KM2) than 4G (100,000 connections per KM2).
5G will also improve the mobile internet speed from 1GB per second to over 20 GB per second. The coupling of 5G and VoIP will perform similarly to a fibre-optic broadband connection for mobile users. This will ensure that VoIP call quality doesn’t drop even when using mobile internet.
AI and Machine Learning in VoIP
Artificial intelligence and machine learning are drastically evolving in every industry, and VoIP is no different. AI and machine learning can already perform tasks like speech recognition, call data analysis, and recognize the caller’s sentiment.
You can categorize callers based on their voice’s stress levels to deliver a more personalized experience. For instance, if a customer reached out with an already elevated level of frustration, it will take much less time for their frustration to turn into anger, especially if put on hold.
You can build protocols into your VoIP system to prioritize these callers to agents to ensure their problems get addressed quickly and minimize their frustration.
AI will also detect issues in call quality early on (due to latency, bandwidth, and incorrect network configurations), allowing you to fix it before it affects the customer experience.
Cybersecurity is one of the biggest concerns for both providers and companies alike. However, VoIP providers host a variety of security measures, including:
- Transmission security
- Infrastructure security
- Physical and environmental security
- Proactive fraud mitigation
- Call encryption
- Comprehensive firewalls
Plus, there are many cybersecurity measures in development.
VoIP Is For Businesses of All Sizes
VoIP services are not only for large enterprises. With more and more companies offering VoIP services, it is now easily accessible to small and mid-sized businesses. That too at pocket-friendly prices.
As of 2020, the total number of VoIP businesses in the US was 1,088.
Cloud VoIP providers like CallHippo, eliminate the need for an in-house IT team to manage the business phone system. All you have to do is pick a plan and enjoy the services.
Future of VoIP is Bright
The growth of VoIP is not going to slow down. The rollout of 5G and improvement in AI will only make the VoIP technology better. Also, VoIP allows businesses to make international calls at a fraction of the cost compared to traditional telephone lines. So, it is safe to say that VoIP will continue to grow in the years to come.