IP telephony, or voice over IP, has become a hot topic during the last three years. IP telephony means placing telephony calls over IP networks instead of public switched telephone networks (PSTN). Currently IP telephony offers cheaper call prices with less quality of service than PSTNs. The aim of this paper is to give an introduction to several aspects of IP telephony such as concept of IP telephony, technical and business issues, advantages and challenges of IP telephony, end user applications and their vendors.

The current development on telecommunications industry is changing the use of telecommunications networks remarkably. People use telephone lines more and more for data transfer instead of ordinary voice calls. At the moment the data traffic is estimated to be equal to voice traffic.

Obviously these changes has strong affection to the networks and operators. Public networks are moving from circuit switched networks to packet switched networks. This will cause telecommunications networks and datacommunications networks, which are mainly IP based, to converge same networks. This will cause that voice calls are transmitted over IP based networks, as well.

IP telephony, or voice over IP, means that voice and fax calls are transmitted over an IP network such as the Internet, rather than over the familiar public switched telephone network (PSTN). During the last three years IP telephony has become a hot topic. Five years ago IP telephony was virtually unknown technology but at the moment it seems that IP telephony will revolutionize voice call business and technology used to transport voice calls. Since access to the Internet is available at local phone connection rates, an international or other long-distance call will be much less expensive than through the traditional call arrangement.

On the Internet, three new services are now or will soon be available:

The ability to make a normal voice phone call (whether or not the callee is immediately available; that is, the phone will ring at the location of the callee).

The ability to send faxes at very low cost (at local call prices) through a gateway point on the Internet in major cities.

The ability to leave voice mail to a called number.

Technology is developing very fast. In the future, there will be many different kind of IP telephones poping out. Those phones are not only using the latest technology but people's needs and feelings must be considered, as well.

The following list few properties that future IP telephony terminals should have:

They should be at least as convenient to use as the advanced phones are currently. Quality of service must be very good. No annoying delays or external noise in voice are allowed, and movements in video must be smooth.
Multi-functionality: they can act like phones, pagers, credit cards, note pad, calculators, video terminals.
Variable uses: they can be used as an office tool or for entertainment.
Mobility: they can be used for access wherever the user is.
Design: they must look and feel good. Since they are not only tools they must be as good looking as furniture or they must be suitable for carrying with in every situation.
Price of the advanced equipment must be low.
One of the first services in addition to voice calls will be video telephony which has been a dream for many years. IP telephony networks address this issue and it will become to every home if wanted. Even home users will be able to make multiuser call or video conferences in relatively cheap price. Users could, e.g., discuss together in which restaurant they will spend Friday night. For offices IP multimedia conferences will offer much better quality of service than current video conferences in cheaper price.

Since IP telephony will not reserve all bandwidth from the user's line she can easily access to data using the same line as call or conference. The user has a loudspeaker in the ear and microphone, e.g., on the desk. At the same time she can access remote databases in the network. This makes working much easier and flexible. When two or more players are playing the same game they can discuss with each other and made plans in real-time how to destroy opponent's (computer or other group of humans) military forces, for instance.

By developing voice recognition users discussing together can computer to retrieve information from a database giving commands in their speech. On the other hand players could give commands to their virtual soldier by speaking (or yelling).

IP will be used everywhere in the future. Microwave ovens, TV sets, stereos, sauna heaters, etc. will use IP in a way or other. In houses there could be speakers all around the house and people could tell, e.g, to sauna heater to switch on or off. They could also call home from the office or from mobile phone and give instructions to the machines.

IP telephony terminals can be entertainment center in the future. Radio and video services could be used over IP network from home or even when the user is traveling by using mobile phone. In addition to video/music on demand there could be interaction with theater plays, for instance. User's sitting at home could give suggestions and applauds to the actors and actresses. When the screen technology evolves books could be transferred over the Internet to the electronic book. For example, if the user forgot to take a book with her, she could request it to be transmitted to her phone. Then she could read it and after reading destroy it from the "phone" and load a new one.

The future mobile phones could be real mini offices where the user has everything with her. No separate calculators, note pads, credit cards, pagers, and phones are needed. The user can receive and transmit all types of data directly to her mobile phone. The phone then converts the received data to the correct output format (text, images, voice, video).

The combination of electronic commerce and mobile phones offers possibilities to pay bills, order supplies, etc. very easily. For example, when the user is traveling in the bus from the office to home she can make payment orders or she can order food from a shop to her home. Naturally the requirement for these operations is that security is excellent.

Additionally to enhanced mobile services in the future the coverage where mobile terminals can be used is nearly global. By doing roaming agreements between satellite networks and public land mobile networks only few areas on the Earth are not covered.

The future equipment will be more and more based on software on the top of very efficient processors. This offers an opportunity for advanced users to extend the equipment functionality as they want by writing their own personal applications on the top of the commercial equipment