Gaining an awareness of your history and where you came from is always quite an enlightening experience. In this case of Telnyx, it all started with the invention of VoIP. With that in mind, we thought we’d take a look back at the history of VoIP and consider how it has changed the way we communicate today.
The early days of VoIP: 1995–2000
Alan Cohen, co-founder of VolaTec, is largely credited with the invention of VoIP around 1995. Just over two decades later, his work has revolutionized the world of communication for both individuals and companies.
Unlike traditional Public Switched Telephone Network (PSTN) landlines, VoIP works by using the global Internet Protocol (IP), of which the main benefit is the way in which it receives and transmits data.
Initially, VoIP systems were put in place as a cheaper alternative for long-distance calls, made possible by a connection to the internet. It was as simple as calling someone using your computer’s microphone and speakers — just as can do today.
But, VoIP was still reliant on PSTN
However, during the early days of VoIP, it was reliant on an internet connection that was predominantly based over leased lines or dial-up connections. These in turn relied on the traditional PSTN network to send the VoIP data.
The result? Poor call quality. Dial-up lines were simply not built to handle data connections and leased lines prevented the simultaneous transmission of data/voice calls. Clearly this was a bit of a roadblock as far as VoIP technology goes, but there was soon to be a rise in interest of certain technology that would ultimately enable VoIP to thrive and grow to where it is today.
Broadband’s impact on the history of VoIP: 2000 onwards
That technology was broadband, and between 2000–2001 subscriptions increased by 40%, with a further 43% increase in 2003. VoIP systems were able to take advantage of the increased bandwidth provided by the high-speed internet services, plus, broadband was always ‘on,’ meaning it was a 24/7 (mostly) reliable service.
More innovation to enhance VoIP: Skype, 2003
Broadband opened the door to further advancements and inventions that made VoIP a even more compelling option for users. In 2003, Niklas Zennstrom of Sweden and Janus Friis of Denmark bought Kazaa, file, video and program-sharing software, and set about developing it further, and as a result, they built Skype.
Skype disrupted the communications market with it’s free and improved call quality. For a small fee, users could even make calls to landlines and mobiles phone to almost any part of the world. It essentially gifted us with unrestricted reach — the barriers of communication were broken down.
Another worthwhile mentioned should go to Vonage, which launched the first VoIP service platform to offer 911 calls in 2003 as well.
FCC changes VoIP forever: 2004
In 2004, soon after the launch of Skype and Vonage, the Federal Communications Commission (FCC) declared that VoIP should be considered as an information service rather than a telephonic service. It was a landmark decision for two key reasons:
It put VoIP systems outside the regulation of individual states
It resulted in lower taxes for VoIP customers versus landline/mobile phones users.
Mass adoption of VoIP: 2009 onwards
This announcement prompted the steady adoption of VoIP by global organizations over the coming years, with some notable names adding VoIP features to their popular platforms.
- Google Voice: Google released Google Voice in 2009 after they acquired Grand Central. They integrated VoIP and video calls to their, at the time, booming Google+ social network.
- Facebook Messenger: Facebook developed it’s Messenger platform to support VoIP in 2014 and then added mobile VoIP and video calling soon after.
- WhatsApp: WhatsApp added their voice calling feature that allows users to talk to any WhatsApp user around the world for free.
The global VoIP services market is estimated to grow by 10% between 2017 and 2021 with an estimated value of USD 140 billion. As an unregulated market, the barriers to entry are low, which in turn has allowed several competitors to thrive. With that in mind, it’s not surprising to see voip-info.org suggesting that there are more than 100 active VoIP companies in the USA.
About Telnyx: At Telnyx we’re always trying to make communication as easy as possible. If you’re interested in learning more about the demise of the PSTN and the rise of VoIP, check out our white paper.