VoIP (pronounced “voy-p”) is shorthand for Voice over Internet Protocol. It’s a new way to communicate by having your voice sent digitally over the internet rather than over a copper phone wire. Once, it was only possible to make a call using VoIP through a computer, but advances in computing hardware and increases in the availability of bandwidth make it now possible to make a call and even send video through a number of devices. You can use VoIP with your existing phone, a VoIP phone, a computer, a smartphone, and even state-of-the-art cameras and HDTVs. VoIP is ideal for both residential and business use.

Voice over Internet Protocol first gained popularity through chat clients such as Skype and Yahoo Messenger. Users would talk using microphones and sometimes web cams, and it was easy to communicate internationally. Calls were also free, aside from the cost of the internet service. But, they were limited because you had to use a computer. Limited bandwidth also meant pictures that were small and choppy, and voice quality that was sub-par. But, over time, technology developed and bandwidth availability expanded to the point where VoIP was a feasible alternative to the traditional phone companies. Now, technology has progressed to the point where VoIP is now better than traditional telephony in many ways.

VoIP calls go through your home’s internet connection. In order to use your existing phone on a VoIP home network, you must use something called an “Analog Telephone Adapter.” This connects your phone to your existing internet connection, which, in turn, routes your calls through the internet. You can also use a phone designed for VoIP called an “IP phone,” or “VoIP phone.” Depending on your home VoIP provider, you may get a plan with metered minutes, or get an unlimited usage plan. In either case, the price per minute is much lower than phone company rates, and you get many features, such as caller ID and call waiting, that you never need to pay extra for. If you have an IP phone or ATA, you don’t need to call through your computer, but, you still must have a high-speed internet connection, such as a cable modem.

The same decentralized infrastructure that made the internet possible also worked in favor of Voice over Internet Protocol. Over the Public Switched Telephone Network, when you made a call, you paid by both the minute and the mile. With Voice over IP, the call stays on the internet until it interacts with a softswitch, at which point the call goes through the local phone network to the receiving phone. With VoIP, every call is a local call.

VoIP works by taking thousands of samples of your voice every second. These samples are then compressed, and broken down into packets. This is what “internet protocol” means. Those packets of data are then sent over the internet. So, your voice is being sent over IP, hence the name. The computer program that samples, compresses, and decompresses your voice is called a codec. Just as you can compress music to be sent over the internet in an MP3 format, your voice is sent through one of many audio codecs. The number of samples taken per second is called the “bitrate.” VoIP phones can actually achieve a higher bitrate than old telephones, and this is called “Wideband Audio,” or “HD Voice.” In practical terms, VoIP sounds as good or much better than you’re used to hearing.

One of the greatest features of VoIP is that your phone service goes with you wherever you go. When you have a cell phone, you take your phone with you, which is great, but what if you are in another part of the world? With VoIP, you can bring your ATA or IP phone, plug it into any working Ethernet connection, and you can make calls from anywhere in the world, be it from home or in a hotel room. You can also make VoIP calls using your computer, or use an app on your smartphone to connect to your data network rather than use your cell phone minutes. Your phone number never changes, and you won’t have to worry about expensive roaming costs, even internationally. VoIP service also offers great added security for personal communication.

The system of telephones within one office or other institution is called a private branch exchange, or PBX. Many businesses are ditching their PBX in favor of IP PBX. It can be a substantial initial investment, but it nearly always pays for itself within about five years because of both the cost savings and increased productivity and sales that come with technology that simply isn’t possible with older phones. The concept of bringing together all of your different methods of communication (email, chat, Facebook, phone, video, etc.) together is called Unified Communications and Collaboration, or UCC. By having your phone service over the internet, you are able to connect all of those technologies together. One popular VoIP provider, for example, has a feature that will do a Google search when your phone rings of the person calling you. As a business VoIP subscriber, you will always have information at your fingertips.

It’s true that there are certain limitations to VoIP. You do need to have a working high-speed internet connection, and you have to have electricity. VoIP technology does not always work well with technology designed for phones, such as burglar alarms. But, these hurdles are being overcome with the combination of regulation and innovation. For example, instead of 911, VoIP has “enhanced 911,” or “e911.” With e911, your information is sent digitally to the authorities as soon as you dial 911. We are also seeing fallback systems being developed, so, for example, if your internet goes out, your phone will seamlessly switch to your wireless data network.

When you compare the cost and feature set of Voice over Internet Protocol compared to the service you get from the phone companies, it’s no wonder that VoIP is catching on. It’s estimated that the global market for VoIP will reach $65 billion in 2012.

Additional Reading

VoIP vs Landline for Business: Everything You Need to Know
Business VoIP vs Traditional PBX Systems: Everything You Need to Know
What is Cloud Hosted PBX?