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What is VoIP Technology? (2024 Guide)

What is VoIP?

VoIP or Voice over Internet Protocol is a communication technology that uses the internet instead of the landline system to make and receive calls. The technology bypasses the traditional Public Switched Telephone Network (PSTN); instead, calls are made over an internet data network.

Some known examples of VoIP software are Skype, WhatsApp and Windows Live Messenger.

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How does the VoIP system work?

Traditional landline calls are transmitted across telephony infrastructure where there is a physical pathway between the caller and the receiver. VoIP calls work through a different process.

Firstly, they are converted into data packets or digital signals from their analogue state.
Secondly, those digital signals are sent to the VoIP provider through the internet.
Thirdly, those signals are converted back into analogue signals before being received by the receiver on the other end.

This conversion of analogue signals into digital signals is done by codecs which include compression and decompression algorithms.

VoIP configurations

There are various ways of using VoIP technology to make a call.

1. VoIP-enabled routers

These devices enable you to utilise your existing landline phone to make a VoIP call. They are connected to the DSL modems and connect to your phone. Once you have configured it with a VoIP provider and service plan, these devices allow you to make calls over the internet. You just have to pick up the phone, dial a number and that’s it. You can also use the adapter on the go to make phone calls.

2. Analogue telephone adapters (ATAs)

These adapters are attached to your landline phones to convert them into VoIP phones. They are slightly larger than a thumb drive and feature a phone jack that is attached to your phone line. Once they’re connected, your landline phone behaves like a VoIP phone.

3. Softphones

Softphones are software applications that are installed on your mobile phones, mobile computers or laptops after which you can manage VoIP calls from there. These applications are a cost-effective solution because you don’t need a physical desk phone or phone set to make calls.

3. VoIP phones

A VoIP phone resembles a landline phone, but it is directly connected to an internet network rather than a traditional phone line. It may include an LCD screen, number pad and several function buttons that allow you to perform actions like call forwarding, auto-attendant, etc. You will still need a VoIP provider service to make VoIP calls through a VoIP phone.

Protocols of VoIP

There are many protocols and standards for a VoIP network but only the main ones are mentioned below.

  • H.323 protocol brings together point-to-point communication and multipoint conferences.
  • H.255 provides call control.
  • G.711 is the standard that digitises analogue signals.
  • G.729 is the speech-compressing standard for sending compressed packets.
  • SIP protocol is used for audio, video and text data packet transmission.
  • Real-time Transport Protocol (RTP) is used when the voice enters the IP network.

Advantages & disadvantages of VoIP technology

This technology offers several advantages to your business along with a few drawbacks. Let’s discuss them both.


  • Cost saving: Businesses can significantly lower their phone bills with VoIP services as calls over the internet are much cheaper, especially for international calls.

  • Scalability: Adding new lines to a VoIP system in case of new hiring (or any other reason) can be done quickly without needing additional hardware.

  • Flexibility & mobility: VoIP allows employees to manage calls from anywhere with an internet connection. This is particularly beneficial for remote work and for employees who travel frequently. You can also give shared numbers to multiple employees.

  • Advanced features: VoIP services come with multiple advanced features like voicemail to email, video conferencing and integration with third-party applications.

  • Enhanced sound quality: Modern VoIP technology provides superior audio quality compared to traditional phone lines, particularly because of high-speed internet and multiple international data centres.


  • Dependence on an internet connection: VoIP relies on a stable internet connection. If your business experiences internet outages or bandwidth issues, it can disrupt phone services.

  • Power outages: Traditional phone lines can function during a power outage but VoIP systems need a regular power supply to function.

  • Emergency call limitation: You may face challenges with emergency call handling when using VoIP. Since they can be made from any internet connection, it makes it difficult for emergency services like 911 to accurately pinpoint the caller’s location.

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You may already be using VoIP technology without realising it. It includes applications like WhatsApp, Skype and Facebook Messenger. All of these platforms use internet to make and receive calls.

The 2 types of VoIP are hardware-based i.e. phone-to-phone VoIP and software-based. Hardware-based VoIP uses adapters (ATAs) or IP phones to manage calls while software-based VoIP uses applications installed on a computer, laptop or mobile phone to manage calls.

Written by:

Isabella Robinson
Isabella Robinson
Isabella Robinson is a seasoned business content writer, leveraging several years of experience to craft impactful narratives that seamlessly blend business insights with engaging storytelling across diverse industries. Her expertise lies in delivering compelling content that resonates with audiences.

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