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How to Choose the Right Telecom System

Cost A proprietary VoIP PBX, designed by a network consultant, runs about $500 to $800 per extension. Add a maintenance contract, and you will pay $10 to $16 per extension per month (amortized over five years), plus phone service charges.

Pros Besides being much more customizable, private VoIP will probably be cheaper than a host over the long run.

Cons There are high up-front or financing costs. You will need to maintain the system, which requires in-house expertise or a service contract (typically 10 percent of the initial investment, says Jennifer Huxley of Telec, a VoIP consultancy in Springfield, Missouri). If your calls are routed over phone lines, you will pay extra. And private VoIP is generally unsuitable for very small companies. "It only starts making sense to buy a system when you've got 10 employees," says Tom Wales, an independent consultant in Maine and Connecticut.

Note Some consultants will install a network at your facilities but maintain ownership of it. They will manage it on your behalf, charging a monthly fee -- a sort of hybrid of hosted and private. This typically costs from $45 to $55 per outbound line per month, says Jeff Ott, CEO of TotalCarrierSolutions.com, a telecom reseller in Missouri City, Texas.

3. Get a Line to the Outside

Whichever system you choose, you will need a hardwired connection to the outside, either to the phone company or to an Internet provider. Phone companies often bundle phone and data services. Any VoIP platform that sends calls over the Web, even to a host, will need substantial bandwidth. A T1 line, says Ott, can carry up to 15 VoIP conversations at a time and costs $300 to $600 a month, plus up to $90 for what's called quality of service (see "A Telecom Glossary" on the following page).

It's a good idea to have separate Internet services for voice and data, to serve as backup should one go down. "I always recommend redundancy, because now, if you lose your Internet access, you lose your voice and Internet," says Ott. "Most businesses can afford to lose one -- but not both." If your proprietary system relies on SIP, consultants recommend that you build in telephone network redundancy as well.

Pick the Host With the Most

Ask for redundancy Choose a company that has prepared for an emergency by investing in redundancies, suggests Don Briggs, who operates Advanced Communications Technology, a hosting service and network designer based in Dexter, Missouri.

Insist on quality Make sure your provider offers quality of service, which is a technical term that refers to a protocol that gives priority to voice packets over data packets. Sound quality and customer service vary widely among providers, and undercapitalized carriers often seek ways to cut corners.

Focus on the metrics "Uptime," the percentage of time the network is running, is important, says consultant Tom Wales. So is bandwidth. "Make sure that they're providing at least 64 kilobits per second for each voice conversation," he notes. "They'll say you need less, but that's the least you should have."

Get it in writing Wales recommends requiring hosts to address these issues in a "service-level agreement" that consummates your telecom deal. If nothing else, says Lundin, take advantage of the 30-day free trial that many companies offer. "You try it out, and if it works, then go with it."

A Telecom Glossary

Few fields are as rife with jargon and abbreviations. Here's a guide to some of the terms you will encounter:

Centrex: a PBX (see below) hosted at the local telephone exchange

DID: Direct inward dialing; lets inbound calls go directly to extensions without an operator

PBX: Private branch exchange, a telephone switchboard used exclusively by a private organization

POTS: Plain old telephone service, i.e., a standard analog line

PSTN: Public switched telephone network, the standard network

QoS: Quality of service, an Internet protocol that gives voice traffic priority over data traffic

TDM: Time division multiplexing, a label for traditional, circuit-switched telephone equipment

VoIP: Voice over Internet protocol, a standard for transmitting voice communication via the Internet

vPBX: Virtual PBX, a scaled-down service for inbound calls

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