What is VoIP?

VoIP, short for Voice Over Internet Protocol, is a digital phone service that transmits voice over the internet instead of over traditional analog telephone lines.

VoIP is convenient, cheap, and comes with great features. If you are paying for landline phone service or traditional PBX service, you should consider a VoIP phone service. If you have a high-speed Internet connection, you are the perfect candidate for VoIP phone service.

VoIP phone service has come a long way in a very short time and is growing in popularity with both residential and business consumers. Reducing costs is a top priority for many consumers, especially in today's global economic climate, and a VoIP phone plan can help you significantly reduce your monthly phone bill.

Of course, you should see for yourself how VoIP can meet your needs. VoIP comes in a few different shapes and sizes, so it's important to know what's best for you. Read below for more detailed information on VoIP phone service.

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infographic of a standard VoIP phone system

How Does VoIP Work?

VoIP is an innovative way to make cheap phone calls

VoIP phone service (Voice over IP; also known as digital phone service, digital telephony, or broadband phone) replaces your phone line with a high-speed Internet connection. It's that simple.

While traditional telephone service compresses your voice into a frequency on a wire, VoIP compresses the sound of your voice into packets of data. These compressed data packets are then sent over the Internet. When the data reaches the final destination, it is converted back to sound. If use VoIP to call someone on the traditional phone network (the "PSTN" or Public Switched Telephone Network), the VoIP call is converted to sound once it reaches the network and the call is routed normally. The difference is that you've paid a lot less for that call by using a VoIP service provider.

If you're a visual learner, the diagram to the right will help to show you how VoIP calls are routed. The most typical call path is phone-to-phone, which you can trace in the diagram from the Conventional Telephone to The Real World. This is what your call path will look like when it's routed by a VoIP company to the PSTN.

What does VoIP mean for me?

You can utilize VoIP for more affordable calling

Choosing VoIP means saving money on your monthly phone bill without sacrificing quality or convenience.

Use VoIP like any other phone: pick up, wait for the tone, and dial the number. That's it. There are no extra numbers to dial and no special rules to follow. You don't need a new phone to call with VoIP, either; just a VoIP adapter or a mobile app on your mobile device. A majority of providers offer a BYOD service to make your transition to VoIP easy. And if you have a headset and VoIP software, then you can just call from your computer. Computer-to-computer calls may be free, too. But if you call the public network or an external phone from your computer, you will likely be charged per minute.

We recommend checking out VoIP phones and a VoIP phone service. VoIP service is much cheaper than traditional telephone service, especially when it comes to long distance and international calls. A majority of VoIP providers offer free local, long distance, and on-network calling. Some even give you free minutes! Also, VoIP solutions come complete with features for better productivity and call management. What's advanced for the phone company These features come standard with VoIP phones, while traditional .

One example is voicemail. You probably have some kind of answering machine with your old-school telephone. With VoIP voicemail, you get the improved functionality (for instance, the ability to call someone back directly and easily), plus you can get each voicemail emailed to you as an audio file attachment. You can even use your email to track missed calls or call the person back & directly from your email. That nifty feature is called "Click to Call."

Will VoIP tie up my Internet connection?

A high-speed Internet connection is a requirement for VoIP

The short answer is: no. Your broadband Internet and ISP (Internet Service Provider) can handle the slight increase in traffic due to your VoIP service. VoIP will not consume your Internet connection. You can still talk on the phone and browse the internet at the same time without a problem.

You should be wary, though, of how many users and/or devices are connected to your Internet. The more users and more concurrent calls, the stronger your broadband connection needs to be for quality VoIP calls.

If you are at all concerned about whether or not your Internet connection can handle a VoIP phone service, use our Speed Test to check your results. With our speed test, you will be able to see whether or not your current broadband connection is VoIP-ready. Plus, your results will show you what services are supported with your Internet. There is also a helpful troubleshooting guide on how to test your VoIP connection.

Circuit Switch Technology (PSTN)

Here's how a traditional phone system operates

Historically, telecommunication companies have relied on what is commonly referred to as ‘circuit-switched technology’ to transport telephone calls. This technology establishes a 'permanent' connection between the calling and the receiving parties for the entire duration of the call, therefore keeping anyone else from using the physical lines while the call is in process.

The problem with circuit-switched technology is that it requires a significant amount of bandwidth dedicated to each call. Furthermore, circuit-switched technology can only support certain types of calls (i.e. telephone-to-telephone). Moreover, the hardware needed to run circuit-switched networks is very expensive because voice and data services must be carried by different wires, and therefore, need separate hardware to accommodate the two types of traffic. The high cost of this hardware has caused many traditional telephone companies to start using parts of the Internet infrastructure to connect PSTN calls. You may have already placed or received a call using VoIP technology without even knowing it!

Naturally, the traditional telephone companies pass along the costs of building and maintaining a circuit-switched network to the consumer in the form of higher rates for their telephone services. Telecom companies may save some money by borrowing from Internet bandwidth, but if your call is placed on a regular telephone using PSTN hardware, you won't see these savings.

Voice over Internet Protocol Technology

The more affordable and easier way to make calls

As the name implies, VoIP refers to calls that traverse networks using Internet Protocol (IP). This can mean that calls are traveling over the Internet, or it may mean that calls are traveling over privately managed data networks that use IP to transport calls from one location to another.

The voice stream is broken down into packets, compressed, and sent toward its final destination by various routes (as opposed to establishing a 'permanent' connection for the duration of the call), depending on the most efficient paths given network congestion.

At the receiving end, the packets are reassembled, decompressed, and converted back into a voice stream by various hardware and software elements. Whether the call originated on a PC, telephone, or an Integrated Access Device (IAD), and whether it is going to be terminated on a PC, telephone, or IAD, will determine the type of software and hardware needed to initiate and complete the call. Over the years, broadband phone providers have been working on improving and re-engineering the hardware and software used in VoIP calls. Today you can compare a VoIP provider’s voice-quality to the traditional circuit-switched technology and find that the VoIP provider’s quality is often superior. VoIP services and features have also evolved and allow customers many new and exciting options, such as online account management, conference calling, call forwarding, and virtual numbers.

A Technical Overview of VoIP

Uncovering the technical side of VoIP

Many years ago it was discovered that sending a signal to a remote destination could be done in a digital fashion: before sending it we have to digitalize it with an ADC (analog to digital converter), transmit it, and at the end transform it again in analog format with DAC (digital to analog converter) to use it.

VoIP services work in just that manner, converting your voice into data packets, sending them, and then reassembling them into sound at their destination.

Digital format can be better controlled. We can compress, route, and convert it to a better format, and so on. Also, we saw that a digital signal is more noise tolerant than an analog signal.

TCP and IP networks are made of IP packets containing a header (to control communication) and a payload to transport data. VoIP uses the header to navigate the network to its destination. The payload carries bits of the conversation.

What are the advantages to using VoIP rather than the Public Switched Telephone Network (or more commonly, the phone company)?

When you are using a PSTN line, you typically pay a line manager company for the time used. The more time you talk, the more you'll pay. In addition, you will probably not have the option of speaking with more than one person at a time.

In contrast, VoIP Services allow you to talk as long as you would like with multiple people (other people may also need to be connected to the Internet) as far away as you want for free or for a fraction of the PSTN cost. You can also browse the Internet at the same time; sending images, graphs, and videos to the people you are talking with.

The Basic Steps in VoIP Communication

What it takes to complete your call

On the back end of VoIP, here is what happens when you place a call over a VoIP connection:

ADC converts analog voice to digital signals (also known as bits)
The bits are compressed into a format for transmission. There are a number of protocols, SIP being the most common for VoIP.
The voice packets are compressed even further into data packets using a real-time protocol (typically RTP over UDP over IP).
A signaling protocol calls the users: ITU-T H323 is the standard signaling protocol.
Upon arrival at the destination, the packets are disassembled, data is extracted, and converted analog voice signals are sent to the sound card (or phone).

All of the steps must occur in real-time to avoid waiting too long for a vocal answer! (See QoS section)

The Tech Behind Your VoIP Call

Additional technical information on your VoIP connection

Analog to Digital Conversion: This process occurs inside computer hardware, typically an integrated card in your PC or an external telephone adaptor.

Today every sound card allows 16-bit conversion from a band of 22050 Hz (for sampling you need a freq of 44100 Hz according to the Nyquist Principle) obtaining a throughput of 2 bytes * 44100 (samples per second) = 88200 Bytes/s, 176.4 Kbytes/s for a stereo stream.

For VoIP, we needn't such a throughput (176kBytes/s) to send voice packets.

Compression Algorithms: Now that we have digital data it can be converted to a standard format that can be quickly transmitted.

PCM, Pulse Code Modulation, Standard ITU-T G.711

Voice bandwidth is 4 kHz, so sampling bandwidth has to be 8 kHz (for Nyquist).
We represent each sample with 8 bit (having 256 possible values).
Throughput is 8000 Hz *8 bit = 64 kbit/s, as a typical digital phone line.

In real application mu-law (North America) and a-law (Europe) variants are used which code analog signal in a logarithmic scale using 12 or 13 bits instead of 8 bits.

Quality of Service (QoS): VoIP applications require real-time data streaming to support an interactive data voice exchange.

Unfortunately, TCP/IP cannot guarantee this kind of purpose; it just makes a "best effort" to do so. So we need to introduce tricks and policies that can manage the packet flow in EVERY router we cross. If you subscribe to one of the broadband phone company providers their technical support can help you setup your router to optimize voice transmission. Technical support can be a distinguishing factor in determining which of the VoIP providers you choose.

Improving VoIP Transmission

Things to consider in order to get the most out of your VoIP service

TOS field in IP protocol to describe the type of service: high values indicate low urgency while lower values denote more real-time urgency.
Queuing packets methods:
- FIFO (First in First Out), the less intelligent method that allows passing packets in arrival order.
- WFQ (Weighted Fair Queuing), means the fair passing of packets (for example, FTP cannot consume all available bandwidth), depending on the type of data flow, typically one packet for UDP and one for TCP in a fair fashion.
- CQ (Custom Queuing), a user can define priority.
- PQ (Priority Queuing), a number (typically 4) of queues with priority levels for each one: packets in the first queue are sent first, then (when the first queue is empty) starts sending from the second one and so on.
- CB-WFQ (Class Based Weighted Fair Queuing), like WFQ but, in addition, we have class concepts (up to 64) and the bandwidth value associated for each one.
Shaping capability allowing limitation of the source to a fixed bandwidth for:
- download
- upload
Congestion avoidance, such as RED (Random Early Detection).

Select And Compare the Following Business VoIP Providers

Find out how much you can save today on Business VoIP

Compare top Business VoIP providers in the table below

Provider	Plan Features	Rate/min.	Trial Period	Setup Fees	Monthly Fees	Details
RingCentral	RATED #1 BY INDUSTRY EXPERTS Includes 100+ Premium Features Unlimited Calling, Faxing, SMS, Conferencing Trusted by over 350,000 Businesses As low as, per month/user	$0.00	14 day trial available to new subscribers	Free	^$ 19.99 _/mo. * Core Advanced Ultra Month to Month (per user) $30/user/mo Annual Contract Paid Monthly (per user) $20/user/mo Annual Contract Prepay (per user) $20/user/mo Month to Month (per user) $35/user/mo Annual Contract Paid Monthly (per user) $25/user/mo Annual Contract Prepay (per user) $25/user/mo Month to Month (per user) $45/user/mo Annual Contract Paid Monthly (per user) $35/user/mo Annual Contract Prepay (per user) $35/user/mo In order to determine the number of users you need for your RingCentral phone system, count the total number of devices you need, including desk phones, softphones, conference phones, and fax machines.	4.1 142 reviews Get Quote!
Alliance Phones	Alliance Phones Simple set-up in less than 30 minutes Efficient daily call report Easy-to-use control panel 12% discount for subscribing and paying for a year upfront.	$0.00	30 days	Free	^$ 19.97 _/mo. * Effortless Plus Simplicity Plus Easy Plus Month to Month (per user) 20 - 100 users $19.97 /mo. Annual Contract Prepay (per user) 20 - 100 users $17.58 /mo. x 12 Month to Month (per user) 4 - 20 users $24.97 /mo. Annual Contract Prepay (per user) 4 - 20 users $21.98 /mo. x 12 Month to Month (per user) 1 - 3 users $29.97 /mo. Annual Contract Prepay (per user) 1 - 3 users $26.38 /mo. x 12 In order to determine the number of users you need for your Alliance Phones phone system, count the total number of devices you need, including desk phones, softphones, conference phones, and fax machines.	5 13 reviews Get Quote!

*Rates shown do not include E-911 charges, taxes, and surcharges. Most providers offering unlimited calling have restrictions and some rates shown are promotional rates based on term contracts or promotional periods. Be sure to read individual providers terms and conditions before you buy. Rates and features displayed for each provider have been sourced from provider's site and other online sources. While we strive to display current information, be sure to check directly with each provider as their plans, pricing, and features are subject to change.