VoIP was first created in 1973 as a “Network Voice Protocol” for ARPANET, essentially the earliest form of the Internet, in use by government and educational institutions at the time. Network Voice Protocol was more an experimental protocol as the internet technology was still in infancy stage. Major drawbacks of this early technology were that, in the 1990s, broadband speeds were unheard of. Everyone was connected to the Internet through a dial-up modem.

 

The First VoIP Softphone

 

Internet technology entered into exponential growth after 1980s and VoIP expanded quickly in commercial sense by 1990s. The first VoIP telephone software, Vocaltec, hit the market in 1995. The software, when run on a computer with a soundcard and an Internet connection, could use the computer speakers (or headset) and a microphone to: accept voice input and transmit audio over the internet to another computer.

 

Enthusiasts eventually termed the back-and-forth transmission of voice audio over the Internet as “Internet Phone” and more popularly the VoIP Softphone. The usage was rather limited initially under internet dialup technology. Typically it is used only when two remotely separated persons requires a simple low cost voice communication to talk to each other. They would both run the software and establish a VoIP communication channel with each other over the dial-up Internet connectivity.

 

VoIP Softphone And Soft Switch

 

Vocaltec successfully marketed its VoIP-Internet Phone product to several large corporations with worldwide highspeed intranet connectivity. The system suffered from technical issues related to sound card compatibility and very poor sound quality. Nonetheless a groundbreaking achievement was made with the first Internet Phone, and all future VoIP technologies were based on the same concept.

 

Within two years, PC to Phone switching technology advanced so that many new companies, such as Level 3, began offering a “soft switch,” which acted as a gateway between telephone networks (and IP networks), replacing traditional hardware switch technologies. By 1998, about 1% of all voice traffic worldwide was VoIP.

 

Standardization Of VoIP Routing

 

By 2000 large networking hardware companies like Cisco and Lucent provided the ability to route and switch VoIP traffic. Entry of big players boosted the use of VoIP within business community and the VoIP traffic rose rapidly to above 3% of voice traffic. In subsequent years, the expansion of broadband Ethernet greatly enhanced VoIP capability and quality. Phone companies even started using switching hardware to route calls over the Internet, releasing new and cheaper calling plans each month to replace the declining international direct dialing market.

 

Introduction Of VoIP QoS

 

By 2005, issues related to poor sound quality were finally resolved as VoIP traffic is provided with higher priority over data traffic. This has drastically improved signal quality and fewer calls are dropped. By this year, Video over IP (otherwise known as video “streaming”) also became popular. The technology uses much the same of VoIP technologies on this implementation.

 

The latest VoIP technologies are still in their relative infancy, but the technology and software continues to advance as the Internet continues to grow. Revenues from VoIP equipment sales alone were about $8.5 billion for year 2008. Today, Almost every major Internet Service Provider in the world is offering a VoIP phone-to-phone package to their customers, as a replacement for the more expensive, traditional phone service.