Although progressing rapidly, Internet telephony still has some problems with reliability and sound quality, due primarily to limitations both in Internet bandwidth and current compression technology. As a result, most corporations looking to reduce their phone bills today confine their Internet-telephony applications to their intranets. With more predictable bandwidth available than the public Internet, intranets can support full-duplex, real-time voice communications. Corporations generally limit their Internet voice traffic to half-duplex asynchronous applications (e.g., voice messaging).

Internet telephony within an intranet enables users to save on long-distance bills between sites; they can make point-to-point calls via gateway servers attached to the local-area network (LAN). No PC–based telephony software or Internet account is required.

For example, User A in New York wants to make a (point-to-point) phone call to User B in the company's Geneva office. He picks up the phone and dials an extension to connect with the gateway server, which is equipped with a telephony board and compression-conversion software; the server configures the private branch exchange (PBX) to digitize the upcoming call. User A then dials the number of the London office, and the gateway server transmits the (digitized, IP–packetized) call over the IP–based wide-area network (WAN) to the gateway at the Geneva end. The Geneva gateway converts the digital signal back to analog format and delivers it to the called party.

Figure 7. PC–to-Phone Connection

Figure 8. Internet Telephony Gateway

This version of Internet telephony also enables companies to transmit their (digitized) voice and data traffic together over the intranet in support of shared applications and whiteboarding.