Small firms can benefit from adopting voice over internet protocol (VoIP) telephony but many small and medium enterprises (SMEs) are unaware of just what the system has to offer, one expert believes.

Colin Duffy, a council member of the Internet Telephony Services Providers' Association, explained that VoIP can offer smaller companies services which were previously only available to larger firms.

"They [SMEs] can get all the things that the very big companies had like telephone extensions, music on hold, call transfer. They can get them now for almost nothing," he said.

Mr Duffy added that dispute the fact that the service is now "fairly fashionable" most small firms "have no concept of what it is or what it does".

However as soon as SMEs discovered the benefits of VoIP "they love it to death", he concluded.

A survey conducted by Ofcom found that at the end of 2006, 20 per cent of people surveyed said they made phone calls via the internet.

More than half of small businesses (53%) believe that the most important benefit of outsourcing is guaranteed response times for IT support, London based Connect conducted the research in 2007.