What is VoIP? What, How, Why?

September 15, 2023
 min read

Voice over Internet Protocol (VoIP) is a phone service delivered via the internet. If your internet connection is of reasonable quality then your phone service can be delivered through the internet rather than your phone carrier.

VoIP services are a great alternative to a traditional phone services. In this guide, we are going to cover what VoIP is in a bit more detail, how it works, and why your business could consider switching to a VoIP service.

What is VoIP?

As stated above, VoIP simply stands for Voice over Internet Protocol. Your device's Internet Protocol is also known as an IP address. An IP address is how devices such as computers and smartphones communicate with other devices over the internet.

VoIP is where calls are made using a device's IP address, rather than the traditional physical telephone lines. For many businesses and consumers, VoIP is considered to be the best alternative to the local telephone company.

With the rise of broadband internet, VoIP has become a popular choice of phone service for both businesses and individuals. People are enjoying VoIP phone services as it offers lower costs than traditional phone carriers with increased functionality. VoIP providers also offer other features not found in standard phone services.

For example, VoIP services like Vxt Call can help you set up a second phone number, meaning you don’t need a landline, a second mobile phone, or even a SIM card for your business calls. This can also help you better manage your work-life balance and means you can take your calls from anywhere.

lady using voip

How does VoIP work?

VoIP uses Internet Protocol, a key building block of the internet, to transfer information. For phone calls, the content of the call is exchanged using small data packets. These data packets can be sent around the globe in less than a second thanks to the internet.

VoIP services enable this by helping these data packets move between your phone and VoIP provider.  A VoIP phone system like Vxt Call facilitates calls between phones and also offers a range of other useful functions like integrations with you business tools, smart voicemail, call forwarding, transcription, and more.

Here’s how VoIP Works in 4 Simple Steps

1. Your phone connects to your switch or router using your Local Area Network (LAN).

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

3. The VoIP service makes the call and exchanges data packets between your IP phone and the other phone on the line.

4. Your VoIP phone converts these data packs into the sound you hear in your phone.

what is voip diagram

Why should you or your business use VoIP?

VoIP uses your existing internet connection to make phone calls

Voice Over Internet Protocol bypasses the telephone company entirely. For businesses, VoIP also offers operability between desk phones, conference phones, mobile phones and VoIP apps. All you need is a broadband internet connection and you can start reaping the benefits.

What does this mean for you?

VoIP works on any computer, meaning if you have an internet connection, you can call anyone (including people who aren't using VoIP) without needing a local phone service. Traditional telephone services on the other hand, require extra wiring to be installed as they need analog lines to carry the signal.

Many businesses also rely on specialized hardware for phone services. This often connects internal phone lines to the public telephone network, allowing offices to make internal and external calls. However, these physical installations are costly to set up and maintain.

Instead, a VoIP provider can handle everything for you without needing to install and hardware. All you need to do is use your internet connection to establish connectivity.

lady using voip

Advantages of VoIP

Lower cost – On average, VoIP helps consumers and businesses alike to cut their phone bills in half.

High sound quality – With a stable and fast internet connection, the audio over VoIP can be clearer and less condensed or fuzzy when compared to some traditional phone calls.

Flexible – With VoIP you can use your phone service wherever you work, making it an essential tool for flexible or remote teams.

Cheaper international calls – VoIP is a much cheaper alternative than traditional phone services for international calls.

Advanced features – VoIP phone plans often include features such as call queues, call recording, and auto attendants, and integrations that can automate work for your business.

Disadvantages of VoIP

Requires high-speed internet connection – To be most effective, VoIP needs at least 100 kbps (0.1 Mbps) per phone line. VoIP doesn’t work so well on satellite-based or dial-up internet connections.

Emergency services limitations – If you need to call emergency services from your VoIP phone, you will need to tell the operator your exact location. If you are not at work this can be an issue, as VoIP systems send your company’s mailing address to safety operators as a default.

Makes analog phones obsolete – Voice over IP uses new technology that doesn’t need analog signals to work. You will likely want to upgrade your outdated handsets if you make the switch.

Is it time to start using VoIP?

VoIP is both easy to set up and use for personal and business calling. As long as you have a functioning internet connection, you can make calls over the internet. Unlike proprietary calling apps like Skype or WhatsApp, you can call any phone number, and use your VoIP service to call anyone using traditional phone service providers.

As far as set up, if you can plug a power cord into a wall and a network cable to your phone, then you can use VoIP. It’s even easier to use VoIP on your iPhone or Android.

Download a VoIP app like Vxt Call, sign up, and you're ready to start making calls using VoIP.

Book a demo today

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