What is VoIP?


Voice over Internet Protocol, or VoIP, is a method for placing and receiving phone calls over the internet. These days, VoIP is generally considered the alternative to the local telephone company.

VoIP technology isn’t actually all that new. Telephone systems have relied on digital lines to carry phone calls since the late 1990s because it’s a cost-effective way to handle an unlimited number of calls.

How does VoIP work?
VoIP begins with an IP address, also known as an Internet Protocol address. Any computer hooked up to the internet is automatically given an IP address. It’s how computers and devices communicate with each other on the internet. So, if you have an internet connection, you also have the ability to call anyone without the need for local phone service. VoIP solutions work on any computer because it’s built upon many years of open standards.

VoIP converts your phone calls into data and is sent over the internet. For phone calls, the conversation is exchanged using small data packets. The internet can send these data packets around the world extremely fast. For internet telephony, these packets travel between your phone and a VoIP provider.

The step-by-stop process
1. Your phone connects to your switch or router in your Local Area Network (LAN).

2. When you dial a telephone number, your IP phone tells your VoIP service provider to call the other party.

3. Your VoIP service establishes the call and exchanges data packets from your IP phone.

4. Your VoIP phone converts these digital signals back into the sound you can hear.

When it was first developed, VoIP was complicated and expensive. Today, however, VoIP is built upon open standards that provide complete interoperability between different desk phones, conference phones, and VoIP apps.

Benefits of VoIP
Lower cost – Most businesses see a significant decrease in their phone bills when they switch from land-lines to VoIP service. Long-distance calls are much, much less expensive when using VoIP.

High-quality sound – The audio quality and clarity of VoIP calls is often superior to analog-based calls. This, of course, is always dependent on the quality of your business internet network. VoIP does not work well on dial-up connections (though there aren’t many of those left these days). But if your network is able to support your day-to-day business without bandwidth issues or downtime, it will also support your VoIP service.

Advanced features – VoIP services are scalable and can easily be customized to include premium features such as auto attendants, voicemail, call forwarding, call recording, and call queues. Often, they’re included with business phone service plans.

Work remotely – VoIP phone service works from wherever you work. There is no technical setup necessary if you work from home or anyplace else.

Return to the Tech Trends Newsletter