Small businesses stand to "get a lot out of voice over internet protocol (VoIP)" technology, according to one industry expert.

The Internet Telephony Services Providers' Association (ITSPA), which is the trade association for UK-based network operators, service providers and other businesses involved with VoIP services, made the claims.

Colin Duffy, council member for ITSPA and chief executive officer of Voipfone.co.uk, said: "In the past, ordinary telephony could only give [businesses] basic residential products.

"[With] VoIP, they can get all the things that the very big companies have like telephone extensions, music on hold, call transfer – for almost nothing."

However, he added that although VoIP has become "fashionable" the vast majority of small businesses still have "no concept of what it is or what it does".

Voipfone.co.uk reports that it has seen its business grow by 12.5 per cent per month in recent times.

According to Ofcom's annual Communications Market Report 2007, consumers are increasingly using VoIP services.

By the end of 2006, 20 per cent of respondents to Ofcom's survey said they were phoning online – a 14 per cent increase compared with the end of 2005.

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