Telephone in conference room being used with Voice Over Internet Protocol

What is Voice Over Internet Protocol (VoIP)?


VoIP defined with how it works, benefits, and best practices for implementation.

Time: 4 minute read

Voice Over Internet Protocol (VoIP) is a network technology that routes phone calls over internet connections instead of using analog telephone landlines or wireless cellular networks.

In this article, we’ll define VoIP, explain how it works, review some pros and cons, and why it might be the right time to move to VoIP solutions at your business.

What is VoIP and how does it work?

At its most basic, VoIP uses network and internet infrastructure (wiring and communications technology) and software to route and manage calls instead of traditional analog phone lines and systems.

VoIP works by converting analog voice calls (usually expressed as waves) into digital signals (1s and 0s) at the originating device and transmitting them as data packets over established internet connections. At the receiving endpoint, the packets are converted back into an audible analog signal humans can understand.

The primary advantages of VoIP are twofold:

  • Routing telecommunications via the internet eliminates long distance charges and reduces overall telco expenses. Businesses are already paying for internet and cloud connectivity. It makes sense to leverage and consolidate those connections for voice as well as data. When voice messages are transmitted as data, there is no charge for the “call”, and distance doesn't matter.

  • Professional voice services improve customer satisfaction and help level the playing field against larger competitors. Companies of any size can access advanced telephony features like multiple extensions, voicemail, automated directories, interactive voice response, call forwarding, and other features not supported by traditional phone services, often for one low monthly fee.

Today, VoIP is considered one part of a larger overall communications strategy called Unified Communications, or Unified Communications as a Service (UCaaS) when delivered via the cloud. UCaaS consolidates multiple audio and visual communication technologies like video conferencing, instant messaging, chat, email, fax, presence plus voice communications into a unified service from a single provider.

What is a voice over IP system?

There are two types of VoIP systems, hardware- and software-based.

A hardware-based VoIP phone looks and feels like a traditional hardwired or cordless telephone. It has a handset, speaker, and microphone, a dialing keypad, and a caller ID display window. VoIP phones can provide voicemail, call conferencing, and call transfer services. The difference is the device is connected to a network via an RJ-45 Ethernet port rather than to an analog landline using an RJ-11 telephone jack.

Software-based or virtual phones are just that, telephony software installed on a computer or mobile device that otherwise might not have voice communications. A soft dialing keypad and caller ID window are displayed on the monitor or screen and controlled by keypad, mouse, or touchscreen. Systems with built-in microphones and speakers eliminate the need for dedicated hardware, although many users prefer a headset for privacy.

For example, many laptops and mobile devices act as "phones" through applications like Microsoft® 365 Teams™ and Business Voice™.

Behind the phones are an IP PBX (private branch exchange) that manages telephone numbers, telephony features, devices, and network gateways, as well as various databases, servers, modems, and routers to handle the calls. Software apps are used to prioritize voice traffic over data, and to enhance sound quality.

Further, VoIP systems can be installed on-premises, although they are more likely hosted by a cloud service provider. This also provides resiliency, as VoIP signals can instantly failover to redundant network connections for uninterrupted service in the event of an outage. Can't say that about a downed landline.

Why is voice over IP Important?

Besides the obvious advantage of reducing or eliminating long distance telephone charges, the pros of VoIP systems include:

  • Accurate budgeting; pay a flat monthly fee for unlimited access to services.

  • Add numbers, delete users, and change telephony features as needed without additional equipment.

  • Improved sound quality (when using a high speed internet connection).

  • Elevates the company image and customer experience with professional voice services.

  • Allows remote employees to connect and collaborate from anywhere.

  • Traceability. VoIP phone calls are tracked. Know exactly who is talking to whom, and when.

Considerations before you implement a VoIP system include:

  • Access to outside services such as directory assistance or emergency services like 911 may not be available.

  • A high bandwidth internet connection is required – no internet means no phone. VoIP is not free; it dedicates a partition of your data (internet) pipeline to transmit voice, but you are paying for connectivity, nonetheless. When data traffic is high, call quality may be impacted with effects like latency and jitter.

  • Service will be interrupted by electrical power outages.

  • Unprotected phone lines. Without proper security measures in place, it is easy for hackers to break into a phone system to record calls, spy on employees, and even use a VoIP line as an entry point into other network systems.

Related content

Article: Can your office phones be hacked?

How to implement a VoIP system?

A technology partner (like Ricoh) with a deep experience in VoIP can help to build, deploy, and insulate your voice communications network from external threats through multiple layers of redundancy and security.

So, when a customer dials your number and hears, “Thank you for calling ABC Corporation. If you know your party’s extension, you may dial it now. Please listen closely as our options have changed…” they won't know if you have a staff of five employees or 500, just that their call is being handled professionally.

If you think your business could benefit by migrating from landline to VoIP telephone services, our IT Managed Services Team can help. From designing a scalable VoIP solution to making the business transition as part of your larger digital transformation journey, our professionals will walk with you every step of the way.

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