Telecommunications industries change rapidly with the advancement of technology, so the language used to describe telecommunications has to evolve rapidly as well. Makes sense right?
Long gone are the days when telecommunications simply referred to telephones sitting on desks in offices. Today, telecommunications involves the Internet, email, fax, messaging, and cellular networks.
Unless you work in the industry or follow the world of VoIP, you probably don’t know many of the terms and acronyms used. However, if you ever need to work with your IT department about VoIP or telecommunications, it’s helpful to know the key terms so you can better communicate what you need and understand what you’re actually getting.
Like many technologies, telecommunications are filled with jargon and terms that may look like another language on the outside. Many service providers count on the fact that customers don’t understand these terms and don’t question their services or fees.
To level the playing field, it’s wise to become familiar with the most common terms and their definitions to make you a more informed shopper.
The following is a need-to-know list to help you better understand this industry.
20 IMPORTANT TELECOM TERMS
5G refers to the fifth generation of wireless technology used in cellular networks. The benefits of 5G over 4G or LTE are faster speeds and lower latency times, which refers to the time it takes for the system to respond to react. Some telecom providers already switched to this technology at the end of 2019, but you will see it becoming more prevalent this year.
Annual Revenue Commitment (ARC)
Annual Revenue Commitments are vital to your telecom contract, and it refers to to the money you must pay to your carrier or vendor each year. Many vendors have eliminated these commitments from their contracts, but it’s something to watch for when you’re negotiating.
Bandwidth describes the range of frequencies in the communications channel. Think of bandwidth as a highway. The higher the bandwidth, the more lanes for traffic to travel, which means better, faster flow of data.
Broadband means that a transmission has a high capacity for data. Higher capacity means the ability to transfer more data like bigger file sizes and streaming of things like high definition movies.
Cloud refers to data storage on remote servers hosted on the Internet. Both individuals and companies make use of cloud technology through the storage of data and access to services such as email. Just think of iCloud where you store all of your photos, contacts, and more.
Communication Service Provider (CSP)
The company that provides your telecommunications services, such as the Internet and cable, is known as Communication Service Providers.
Customer Provided Equipment (CPE)
CPE is any equipment required for telecommunications that the customer has on their property. These items include telephones, fax machines, routers, and modems.
A domain is the part of an internet address that comes after the period in your browser search bar. The domain is the kind of website and doesn’t apply to a specific location online.
DID refers to direct inward calling, and companies like AT&T or Verizon allow a caller to dial the 10-digit number to get to an extension within a system.
Fiber Optic Cable
Fiber optic cables transfer data via light through optical fibers. Fiber optic cables provide higher data transfer speeds typically than copper.
On computer networks, the firewall helps to ensure network security by blocking certain types of traffic, both in and outbound. Firewalls are essential for keeping out intruders onto your network.
Infrastructure refers to the equipment and software that makes up a company’s telecom or other systems. The infrastructure is the backbone of the organization and comprises computers, IT, and applications.
Local Access and Transport Area (LATA)
This term refers to an area that’s covered by your telecom provider. It’s important to know this if your company is setting up in a specific place that requires services from a particular provider.
Makeup to Minimum (MUTM)
When you have a contractual minimum that you agree to spend each year, the difference between the minimum and what you actually spent is known as the MUTM.
Minimum Usage Guarantee (MUG)
The MUG represents the amount of money your company will spend on certain services per year.
A non-recurring charge or NRC is a one-time fee that doesn’t auto-renew.
Private Branch Exchange (PBX)
A private branch exchange is a switching hub for telephone systems that consists of more than one branch of telephone systems. The exchange acts as the ‘conductor’ for traffic through the system and links the phone lines together. Typically a company will use a PBX to connect all of their phone lines to an external line.
SIP trunking works by allowing the endpoints of the private branch exchange to make calls via the Internet. SIP trunk controls voice and messaging for a variety of applications.
Third-party billing refers to a type of billing in which an intermediary or other party handles invoicing between a customer and supplier.
VoIP or voice over internet protocol is a technology that allows the voice to travel over the Internet rather than standard copper wires or cellular networks.
These are just a handful of the hundreds of terms you should become familiar with, but it’s a good start to help you choose the best service for your company. Knowing these and the other relevant terms also enable you to negotiate better deals and better understand the services you’re getting. Be sure to bookmark this so you can refer back to it later.