VoIP, short for “voice over Internet Protocol,” is a technology that lets users place phone calls over an Internet connection. It came alive with the rise of broadband to become the top way individuals and companies communicate over the phone.

VoIP calling doesn’t differ much from using the analog phones of yesteryears to talk to people across long distances. The only difference is the lines that connect one phone to another, giving VoIP phones more features than standard ones.

Other interesting terms…

Read More about “Voice over Internet Protocol (VoIP)”

Unlike phones in the old days, today’s VoIP phones use the Internet to connect one user to another.

How Does Voice over Internet Protocol Phone Work?

A VoIP phone is first connected to a switch, if your company uses extension numbers, that is. The switch is connected to a router/modem so the phone can access the Internet. If you don’t use a switch, the phone is directly connected to your router/modem.

For greater clarity, let’s define each of the terms mentioned above.

  • Switch: The central tool in a telecommunications network that links calls from one telephone line to another across a telecom network or the Internet using software that runs on a general-purpose system.
  • Router: A piece of hardware that connects a local network to the Internet.
  • Modem: Short for “modulator-demodulator,” a device that converts digital data into analog formats for telephones or radios.

So how does VoIP calling work? Your phone accesses your network switch or router. When you dial a number, your phone tells your VoIP service provider to call the other party. Your VoIP service provider places the call and exchanges data packets from your IP phone. Your VoIP phone converts these digital signals back into sounds you can decipher.

What Are the Advantages of Voice over Internet Protocol over Standard Voice Calling?

VoIP calling has several advantages, making it the preferred way to reach people via voice calls. Here are five of them:

  • Low costs: VoIP calls save users more than 50% on their phone bills than standard voice calls.
  • High sound quality: Unlike standard long-distance calls, VoIP calls suffer from less interference, making call quality much better.
  • Advanced features: VoIP phones offer special features like auto attendants, call recording, and call queues. Auto attendants are like virtual receptionists who greet your callers and route them directly to employees, departments, or phone users. Call recording lets users keep audio recordings of meetings and important phone calls, which can take the place of minutes. Finally, the queuing feature ensures you’ll never miss calls again. It holds all your incoming calls until you’re able to get to them or forwards them to other people who can take them.
  • Fit for remote work: Can be used wherever you are. You don’t need much technical know-how to make VoIP work, even when you’re at home.
  • Low long-distance call rates: VoIP phone services offer much lower international call rates than standard phone services, again saving users a lot on costs.

Does VoIP Have Disadvantages? What Are These?

There are always two sides to a coin, which is true for technology, too, like VoIP. Here are some downsides to making VoIP calls:

  • Need for high-speed Internet access: VoIP requires a broadband Internet connection. Users need at least 100kbps to make one phone line work.
  • Emergency service limits: Since a VoIP phone uses an IP address to pinpoint its location, emergency service providers (when you dial 911, for instance) won’t be able to tell precisely where you are if you need them. What the emergency service provider will see is probably your company’s address if you’re using a corporate-owned VoIP service, that is.

How Much Does Switching to VoIP Cost?

The primary reason why users switch to VoIP is cost savings. But how much is the initial cost? Here are some helpful numbers:

  • On-premises VoIP system: US$500–1,000 per user
  • Cloud-hosted VoIP system: US$20 per user
  • VoIP phone: US$50 per device
  • Headset: US$80 per device

These costs are on top of your Internet subscription fees. While the initial cost may seem significant, the savings users make from no longer paying call fees (especially long-distance ones) would make up for it. So long as you pay for Internet access, all your voice calls will be free of charge.

Key Takeaways

  • VoIP is a technology that lets users place phone calls over an Internet connection. The rise of broadband made it the top means for individuals and companies to communicate over the phone.
  • Using VoIP requires organizations to use a phone, a switch, a router, and a modem.
  • VoIP has several advantages over using traditional phones, including low costs, high sound quality, advanced features like an auto attendant, is fit for remote work, and low long-distance call rates.
  • VoIP usage is not all roses, though. It also has downsides like the need for high-speed Internet access and emergency service limits.