Industry News

What is VoIP and how does it work?

April 20, 2018

VoIP or Voice over Internet Protocol, also known as IP Telephony or Internet Calling is an alternative way of making phone calls that can be less costly than standard telephone calls over PSTN (Public Switched Telephone Network).

This article explains what VoIP is, how it works and the advantages and disadvantages of VoIP calling over standard, traditional telephone services.

How does VoIP work?

VoIP works by taking standard analog audio signals and converts them in to digital data that can be transmitted over the internet using the IP Protocol.

Interestingly there isn’t just one way of placing a call via VoIP, instead there are three different types of VoIP service that are commonly used today. These are:

ATA: This is simplest and most common form of VoIP calling. By using an ATA (Analog Telephone Adaptor), you are able to connect a standard phone to your computer or your internet connection for use with VoIP. An ATA is an analog to digital converter which takes the analog signal from your phone and converts it into digital data for transmission over the internet. It’s extremely straight forward to use and so it has been widely adopted around the world.

IP Phones: An IP phone is a specialized phone that looks like a regular phone with the usual handset you would expect to see, along with the cradle and buttons, however instead of hacing a standard RJ-11 phone connector, IP phones have an RJ-45 Ethernet connector instead. IP phones connect directly to your router and have all the necessary onboard hardware and software onboard to handle the IP call.

Computer-to-Computer: Of all three of the main systems, this would be the easiest way of using VoIP. Computer-to-computer VoIP calls use software loaded on your PC or device, a microphone and speakers (or headset) and your internet connection to allow you to make calls from computer to computer. Popular services like Skype utilise this VoIP platform to provide their services.

What are the advantages of VoIP services?

There are a lot of advantages to using VoIP over traditional phone services. These include:

Cost: For many businesses, VoIP is a way to easily cut down communication costs.  The great thing about VoIP is it utilises pre-existing infrastructure without additional costs. In many cases VoIP services can be used for free with computers or devices that have the right software, and even in some cases with mobile and landline phones. When you consider the costs associated with international business calls, this becomes an obvious alternative for business owners around the world.

Easy configuration, installation and maintenance: Another benefit to using VoIP services is that they are easy to install, configure and maintain. You don’t usually require an engineer to set it up as the physical setup is so simple. Once the system is connected it is also very straight forward to configure and customise the system for each user using the portal or software provided by the system manufacturer.

Scalability: It’s not always easy to predict how many phones you’ll need over the next year, and if you have a traditional phone system, you have to estimate carefully to avoid spending money on phone lines you won’t use.

All this goes away with VoIP systems. With VoIP for your business, you can add a line as soon as you add a new employee, and when an employee leaves, you can easily reassign or remove the line. You always have the right number of phone lines for your needs.

What are the disadvantages of VoIP services?

Albeit only limited, there are a couple of disadvantages to using VoIP services over PSTN. They include:

Power dependency: A standard phone system runs on phantom power that is provided over the line from the central office. Even if your power goes out, your phone (unless it is a cordless) still works. With VoIP, no power means no phone. A stable power source must be created for VoIP to function.

Emergency calls: This can be an issue with VoIP calling. Because VoIP uses IP-addressed phone numbers there is no way to associate a geographic location with an IP address. So, if the caller can’t tell the emergency services operator where he is located, then there’s no way to know which call center to route the emergency call to and which service should respond.

Service reliability: As VoIP relies on a steady internet connection, it can be susceptible to the same issues associated with standard home broadband services. All of these factors affect call quality: latency, jitter and packet loss. Phone conversations can become distorted, garbled or lost because of transmission errors.

VoIP is here and it is here to stay

For a relatively new technology, VoIP has already become widely accepted around the world. There are still a lot of improvements that can be made and are expected to be implemented over the next few years.

Around the world operators are launching VoIP services if they haven’t already, and some major operators have begun to move to a fully digital service. Recently BT announced they would be switching off their PSTN and ISDN network by 2025 and switching to a single IP based network.

It’s clear that VoIP is here and will continue to be rapidly adopted around the world.

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