How does Voice over IP work?

Posted on: 2016-04-12 | Categories: VoIP VoIP Services

VoIP, which is short for Voice over Internet Protocol (IP), is a method of making phone calls over an internet connection. Voice over IP is also referred to as Internet Telephony, IP Telephony and Internet Calling. With this alternative way to transmit voice communications, calls can be relatively cheap or even free when compared to traditional phone systems that use voice communication over the Public Switched Telephone Network (PSTN).

Using PSTN is becoming more and more obsolete in an increasingly digital and networked enterprise environment. Instead, Voice over IP uses packet-switched technology which takes analog audio signals and digitalizes this data to transmit over the internet. The internet calling system has made voice communications possible through not just phones, but various connected applications on computers and mobile devices.

Forms of Voice over IP services

With Voice over IP service, you can transmit communications in the following most common ways:

  • IP Phones: Special phones that have been designated to facilitate Voice Over IP can come in the traditional look of a handset phone or Wi-Fi connected phones. The difference is, they use an Ethernet connector that hooks up to an internet router and feature software that is equipped to handle Voice over IP calls.
  • Computer-to-Computer: For computer-to-computer VoIP communications, you can make calls using a VoIP software, microphone, speaker and internet connection.
  • Analog Telephone Adapter (ATA): An analog telephone adapter connects to a traditional phone, computer or internet-connected device to facilitate VoIP communications. It converts analog signals to digital data that is then able to be sent over an internet network.

How is Voice over IP used in business?

The advantages of using a VoIP service over a traditional enterprise phone system that does not integrate with other software can be enormous for today’s businesses. Virtual Private Branch Exchange (PBX) networks that host VoIP communications have replaced the physical PBX system that is proving to be increasingly inflexible and unable to keep up with the way business functions today.

Employees often have no fixed desk and may travel extensively—some people may work from home or from remote locations and yet others have flexible schedules. Traditional phone systems operate on the assumption that everybody comes to the same office from 9 to 5, has a desk and the phone attached to it. To top it off, enterprise features are often expensive and considered a luxury by most small businesses and startups.

Voice over IP bridges many of these gaps and brings a lot of functionality to the table. In addition to being a step up in terms of technology, it actually enables businesses to save on their monthly bills as well. There are many types of VoIP deployments and these systems can be useful for both consumers and enterprises.

How is VoIP used by consumers?

Some of the early VoIP adopters in the consumer segment were mostly those individuals who had the technical knowledge to understand the latest innovations. Nowadays Voice over IP is pervasive, and most households have switched to it – whether it is from a new company or their existing operator. Though landlines still have their place, especially in rural areas with inadequate internet access, the pace of adoption in VoIP has far outstripped the PSTN.

The biggest reason for this is simple – VoIP calls are extremely inexpensive. Voice over IP enables tremendous cost savings in terms of charges for local and international calls, when compared to traditional phone systems. Most vendors even offer unlimited calling to specific countries, within the United States and Canada and plenty of other options as well.

Quite a few households nowadays have friends and family scattered across the world and VoIP gives them the opportunity to stay in touch without racking up huge phone bills every month. Consumers can even get local numbers in a variety of cities and countries enabling relatives to call them at a fraction of the price of international calls.

Enterprise Voice over IP options

Enterprises can choose to purchase hosted services from an external vendor or deploy their own on-premise solution via SIP trunks. There are benefits and disadvantages to both approaches and some companies even choose to blend the two alternatives based on their own needs.

Hosted VoIP services

This is an extremely attractive option for freelancers, startups, small and medium organizations and even larger corporations. With hosted VoIP, capital expenditure becomes operational expenditure. Instead of investing huge amounts of capital in expensive PBX boxes, companies can pay smaller monthly amounts to have the same – and in many cases better – services delivered to them over the internet.

It frees up enterprises from the hassle of periodic upgrades, maintenance, repairs, software updates and all the constant configuration changes needed to keep the system up to date with business requirements. All these processes are taken care of by the external contractor. This means an organization does not have to specifically hire those with the technical knowledge to maintain PBX systems and existing personnel can be reassigned to more productive tasks.

Voice over IP via SIP trunks

This alternative is favored by organizations that already have the expertise and experience to manage their own systems and those who desire the control and customization options. The total cost of ownership is considerably less than paying the monthly or annual substitution charges for hosted VoIP. The cost per call also decreases as the volume of calls made increases. The company remains in full control of key decisions including when to upgrade the system, introducing new services that can be useful to the enterprise, or making any other changes as needed.

Quite often this route requires considerable investment as the organization will have to purchase IP PBX boxes, SIP trunks from an ITSP and other hardware to deploy the system. This is the main obstacle preventing smaller organizations from utilizing SIP trunks, although further innovation in the industry may drive down costs in the future.

VoIP as part of Unified Communication

Increasingly, organizations view VoIP as an essential part of their Unified Communication (UC) deployments. The UC system mainly brings together different communication channels and protocols in an integrated suite that offers a common interface and seamless interoperability. This means instant messaging, voice calling, conferencing, video chat and other forms of enterprise communication are consolidated into a single suite.

Since Voice over IP integrates easily with other enterprise applications, it often becomes the backbone of the new UC suite. Establishing Unified Communication within an enterprise is generally a multi-year project and takes place in several phases. Generally speaking, a company does not start off with UC from scratch. As the enterprise’s use of VoIP becomes widespread, organizations usually want to improve the experience and view UC as the logical next step.

Even though VoIP is a relatively new technology when compared to older systems, the clear benefits have persuaded consumers and enterprises alike to switch. VoIP is clearly the future of voice communication and the day is not far when the PSTN is abandoned completely.

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