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Voice over IP Options for Investment Firms

By Mary Beth Hamilton | Thursday, October 28th, 2010

Last week we looked at Voice over IP definitions and misconceptions as it pertains to hedge funds and alternative and investment firms. This week we look at the three primary applications for VoIP at investment firms:

  • Primary Dial Tone Deliveryhosted voice services

  • Backup Dial Tone Delivery

  • Hosted Voice (aka Hosted Telephony)

Deciding which application(s) to use is a matter of understanding the pros and cons of each and knowing the requirements of the environment in which they will be used.

Primary Dial Tone Delivery

One way to transition to VoIP is primary delivery of dial tone. This means a firm is using VoIP to make and receive calls. Through the use of an Integrated Access Device (IAD) a traditional non-VoIP enabled PBX can receive dial tone over VoIP. This method of receiving dial tone has several advantages over the traditional voice T1 method.

One significant advantage of using VoIP over a traditional voice T1 is efficiency. A voice T1 has 23 channels that are usually all designated for voice traffic allowing for 23 simultaneous calls. Even in a firm with 23 or more people usually only five or six are on the phone at the same time. In this scenario the unused channels are wasted. To more efficiently use a T1, a firm could use VoIP to transmit traffic as needed, eliminating the need for 23 dedicated voice channels.

With VoIP, other IP traffic can be routed over the T1 line while at the same time dynamically allocating bandwidth to VoIP as needed. For example, when 5 voice calls are active, bandwidth is allocated to these calls and the remaining bandwidth is used for other IP traffic. Alternatively, if there is no voice traffic than the entire T1 can be utilized for other IP traffic.

Redundancy is another advantage for using VoIP as primary dial tone. Most IP networks are designed with multiple layers of redundancy; this is especially true at hedge funds and alternative investment firms where IP networks are the backbone of trading systems. In this case, using VoIP may actually reduce a firm’s cost while increasing its level of redundancy. Most firms have already invested in building redundant IP networks; therefore, using VoIP over the network allows firms to maximize their existing infrastructure investment while adding a level of redundancy to their voice systems that was previously unavailable. The best part is, the redundancy is delivered at no additional cost to the firm.

Backup Dial Tone Delivery

Backup dial tone delivery has all the benefits of primary dial tone delivery, but the benefits are only applied to the backup connection. A voice T1 still serves as the primary connection with backup dial tone delivery.

Backup dial tone delivery is best for firms that want the benefits of VoIP, but are contractually bound to a voice T1 and for hedge funds wishing to test VoIP. A hedge fund with an in-house IT staff, for example, that wants to test VoIP and get comfortable supporting it may want to use this approach. The in-house staff will gain hands-on experience with VoIP before migrating their primary dial tone.

Hosted Voice (aka Hosted Telephony)

Another application of VoIP at a hedge fund or investment firm is hosted voice (a.k.a. hosted telephony). Also known as hosted PBX, Hosted Voice is the use of one PBX, which is hosted by a third party and used by many different firms. Hosted Voice delivers many of the benefits discussed in the Primary Dial Tone Delivery section.

One additional advantage of hosted voice services is that they are much more cost effective than purchasing a PBX and the features delivered by hosted and non-hosted PBXs are very similar. The hosted model is well suited for firms that wish to avoid upfront hardware expenditures and want a solution that is managed by a third-party. Eze Castle Integration is increasingly seeing firms selected Hosted Voice Services for their telephony needs.


VoIP is no longer a cutting edge technology that should only be used by hotels, dot-com companies and consumers. VoIP is now a proven technology that can increase the quality, reliability and uptime of your telephony infrastructure if implemented and maintained properly.

Be sure to read Part 1 on A Look at VoIP: Definitions and Misconceptions

Read more about Eze Castle Integration's Hosted Voice Services.

 Contact eze castle rep

Photo Credit: Istock

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