Voice over IP (VoIP) is the transmission of voice and multimedia communications over the internet instead of a Public Switched Telephone Network (PSTN). Other terms for voice, fax, SMS, and voice messaging using this technology are Internet telephony, broadband telephony, and broadband phone service.

Calls made using traditional telephony and voice over IP use the same steps. These include signaling, channel setup, digitization of the analog voice signals, and encoding. However, traditional telephony uses circuit-switched networks, and VoIP, packet-switched networks. Circuit switching establishes a communications circuit between two network nodes, which stay connected for the duration of the call. In packet switching, packets of data consist of a header and payload. The header directs the packet to its destination. The payload contains the message content. VoIP transmissions utilize both proprietary and open-standard protocols. VoIP phones, special-purpose software, mobile applications, or web pages can receive VoIP communications.

Consumer Market

Consumer providers of voice over IP often use existing broadband internet access, and the process to make and receive calls is like the process using a PSTN. In addition, some VoIP providers permit Direct Inbound Dialing (DID) to telephone extensions. The telephones or methods needed to connect to a VoIP system include the following:

  • A dedicated voice over IP phone
  • An analog telephone adapter such as a residential gateway or a cable modem
  • Softphone applications on networked computers

Telecommunications companies commonly use VoIP telephony over dedicated and public IP networks.

Corporate Use

Because of the bandwidth efficiency and lower costs of voice over IP, businesses favor VoIP against traditional telephone systems. In fact, as early as 2008, 80% of international Private Branch Exchanges (PBXs) were VoIP. VoIP competitors offer systems for small to medium and medium to large businesses that offer unified communication services that include phone calls, faxes, voice mail, e-mail, and Web conferences. With VoIP, a single network can handle both voice and data, reducing infrastructure costs. Extensions on voice over IP systems cost less than extensions using hardware-based PBXs.

VoIP devices have user-friendly interfaces that are not as rigid as PBX systems. In addition, dual mode phones allow switching between fixed lines and mobile phones during a call. In the US, the Social Security Administration was a government innovator in using VoIP infrastructure to handle communications over its existing data network.

Quality of Service

Some experts believe that VoIP communications are less reliable than communications over circuit-switched public networks. Voice over IP may be more prone to congestion and denial of service attacks and may exhibit latency, packet loss, and jitter. These problems do not occur with circuit-switched systems that may have insufficient capacity because they refuse new connections and carry the remainder without impairment. Providers use a number of protocols that improve quality of service and quality of experience with VoIP. However, the lack of access to fast broadband affects many rural communities.

Other Considerations for Voice over IP
  • Emergency Calls – Landline phones have direct relationships to locations that are available emergency responder databases. However, vendors may provide emergency services in some countries, but in the US, the Communications and Public Service Act of 1999 requires providers to associate an address with the caller’s phone number.
  • Fax Support – Fax over IP is the term for fax transmissions. Providers use the T.38 protocol to assure reliable fax communications.
  • Power Requirements – Unlike traditional residential telephones, IP communications require power from electrical mains. Therefore, many internet-based systems have battery backup in the event of a power failure.
  • Security – VoIP telephone systems face the same security challenges that affect any internet-connected device. However, encryption, programs, and protocols help to prevent hacking and other security concerns.
  • Caller ID – As with public switched telephone networks, VoIP supports caller ID.
  • Operational Cost – Voice over IP has reduced the cost of data and voice communications due to sharing of infrastructure. A single broadband line can transmit many telephone calls. In addition, the use of virtual PBX software eliminates the need for telephone attendants and costly hardware.
  • Regulatory and Legal Issues – Governments around the world are beginning to regulate IP networks and providers. In several countries, the services are taxed, prohibited, or restricted, measures that resulted from state-owned communications companies losing income to the new technology.
Why Voice over IP is so Beneficial

Among the most common features of Voice over IP services, the following remain the most popular: dedicated phone system, call recording, instant messaging, contact center, screen sharing, call logs, video meetings, call forwarding, fax, virtual numbers, conferencing, and integrations. The benefits of VoIP for business systems is that it is very simple to set up and use. Furthermore, these systems accommodate mobile use at all times. Some additional benefits that are optional include having a virtual receptionist, extension dialing, conferencing, and music-on-hold. Voice over IP can work with local and toll-free phone numbers, virtual fax extensions, and conference extensions if necessary; it’s that versatile. Users can send and receive calls from regular analog phones, IP phones, and mobile smartphones. Additionally, if you opt to use VoIP services, you may be able to keep your existing phone equipment if you purchase an analog-to-digital device.