Last updated: October 2021

Compare different VoIP providers, explore our in-depth reviews & informative articles, and choose the best solution for you.

What is VoIP and how does it work?


Like many cool-sounding terms in the telecom industry, VoIP, or Voice over Internet Protocol has been extensively used by sales and marketing teams to promote their products and services.  But, really, what is VoIP and how does it work?  In this article, we’ll attempt to burn away the chaff and get to the heart of this technology, to understand it, and to clearly see how it can be beneficial for your business.

VoIP Misconceptions

Most people who have heard of VoIP will tell you that it is essentially making phone calls over the Internet.  They will also tell you that such calls are much cheaper than conventional telephone calls.  You may also hear that the sound quality of VoIP services, as well as their reliability, is very often quite poor.

These are all impressions of VoIP that, although based on the reality of almost two decades ago, are now inaccurate.  These are not so many misconceptions as they are out-of-date notions.  Today VoIP is a very mature, robust, and high-quality set of technologies that not only provides telephony service but has taken voice to the next level.

VoIP - the real deal

The term VoIP refers to a collection of technologies that are used to deliver voice communication and services over networks that leverage the Internet Protocol (IP).  These networks include but are not limited to, the worldwide Internet.  This is in contrast to conventional telephony which uses traditional analog telephone lines, as well as legacy digital technologies such as ISDN.

Although this definition does include the out-of-date concept of telephone calls over the Internet, it includes much, much, more than that.  The great advantage of VoIP over conventional telephony is that the voice itself is transmitted over an IP data network.  This makes such voice services considerably more versatile and simpler to integrate with other state-of-the-art technologies.  Modern VoIP systems and services have a profusion of innovative and high-tech features that are available only because of the fact that the underlying infrastructure is that of an IP network, the same IP network that you use for your data communications.

This means VoIP technologies do not only offer “telephony over the Internet at low rates” but also allow business enterprises to employ VoIP over their internal data networks.  We’ll examine the implications of this a little further down.

What is network convergence?

This use of a single network for both voice and data services is known as network convergence.  

Traditionally, say about twenty years ago, business enterprises would invest in two distinct and disparate networks: the data network and the telephony network.  These were separate networks due to the fact that they developed independently and relied on mutually exclusive technologies.

Network convergence is the process by which voice services, over the years, have migrated from traditional telephony technologies, to run on data network infrastructure, and it is VoIP technologies that have made this possible.  This migration required some adjustment of the nature of IP networks.  Data traffic is “bursty” in nature and does not always arrive at its destination in a smooth and continuous flow.  This is fine for email or for web browsing but is catastrophic for voice.

In order to accommodate the time-sensitive nature of voice traffic, which requires a steady stream of voice packets to arrive at their destination in a timely manner, data networks have been tweaked with the introduction of Quality of Service (QoS) mechanisms.  These mechanisms ensure that voice can indeed successfully be transmitted over the same infrastructure.

Benefits of convergence

Network convergence has many advantageous implications.  Some of the most important include:

  • Lower costs – The primary source of lowering costs does not come from cheaper per-minute rates, as may be expected, but from lower infrastructure costs.  Convergence consolidates the cost of two networks into one.  Maintenance, Moves Adds, and Changes (MACs), as well as your IT department staff, are all costs that are streamlined into a more efficient usage.
  • Versatile network – The telephony network itself becomes more flexible in various ways.  Multisite networks are more easily created, allowing existing WAN infrastructures to carry both voice and data.  Remote workers can easily carry their corporate telephone number with them on their laptop or their mobile smart device.  Voice services can essentially be offered anywhere in the world where there is Internet access.
  • Application integrations – Because VoIP runs over the same network as all your other data applications, it is possible to integrate your VoIP system to other network applications such CRM, Helpdesk, Presence, or Live chat applications.  More on this below.

Advanced applications

The transmission of voice over the same network as all of your other services means that it is possible to integrate multiple network applications with your VoIP service in order to increase productivity and simplify tasks.

API Integrations

Aircall, for example, is a cloud-based VoIP provider that is capable of integrating its voice network with applications such as Zendesk for helpdesk purposes, Microsoft Teams for collaboration, or Hubspot for CRM integrations.  This is done using an application programming interface (API), an industry-standard for software application integration and interaction.  In this way, for example, if a call comes in from a particular caller, using the caller ID, integration with Hubspot will cause the caller’s information to automatically appear on the agent’s screen, allowing them to have instant access to the specific customer’s particulars and transaction history.

Call Center Applications

Another form of an advanced application is the use of VoIP technology for advanced call centers.  Freshcaller is an excellent example of such an application.  VoIP allows you to quickly and easily create custom greetings, call distribution rules, interactive voice response (IVR) menus, and have calls directed to configured agents that may be local to you or halfway across the world.  Such a setup would be near impossible and prohibitively expensive to implement with traditional telephony, making this just one of many examples of the flexibility and versatility that VoIP delivers. 

Advantages of VoIP

The advantages that VoIP offers are overwhelming.  The more you read about it and the more you study the new technologies and applications that are evolving from VoIP, the more overwhelmed you become!  Some of the most significant are described below.

VoIP is simply one more network service

Telephony should no longer be viewed as the counterpart to a data network but should be seen as one more network service that is delivered over the IP network infrastructure. Thus VoIP becomes an essential addition to the list of services such as Internet access, file sharing, email, instant messaging, and web access.

Remote users

Arguably one of the most significant advantages of VoIP is the fact that you can have a VoIP endpoint anywhere there is Internet access.  So, remote users are freed up to be completely mobile and still be reached at the corporate phone number, which is carried with them on their mobile smart device, laptop, or in the IP desk phone in their home office.

Leveraging the cloud

Because VoIP is just another network service, it enables providers to use cloud-based infrastructure to deliver voice applications.  A multitude of such services, such as Ooma, for example, are made available worldwide.  They provide secure connections to their online service either via the Internet or via a dedicated WAN link independent of the Internet at large.  In this way, customers don’t need to invest in on-site hardware, but use a subscription-based scheme, making VoIP services much more accessible to even the smallest businesses.

Simplified integration and set up

Gone are the days where you needed a voice guru to set up your phones and your voice applications.  Streamlined online step-by-step wizards are now the norm for setting up your VoIP services and no specialized knowledge or skill set is required.

VoIP hardware and software

Telephony providers using VoIP are able to deliver telephony services that terminate on specialized software called a softphone, that runs on either your mobile smart device or your laptop or desktop.  In most cases, you don’t need to purchase any hardware at all!  Alternatively, you can use a Session Initiation Protocol (SIP)-based IP desk phone to use with these services to keep the traditional physical phone feel.  In any case, all of these devices register with the service over the Internet and are thus provided with a telephone number to use as you would from any traditional phone service.


Yes, VoIP does offer telephone calls over the Internet at cheap rates.  But as you have seen here, such a description is, to put it mildly, inadequate to describe the capabilities and potential of today’s VoIP technology.  This is just a glimpse into the amazing world of VoIP and the possibilities it can bestow upon your enterprise or business.

Result: 8 products
Sort by
Disclosure icon
SMB Holiday Promotion: 25% off MVP list price*
  • Free trial, Cancel anytime
  • Easy to install cloud phone system
Visit site
Read review
Excellent mobile app, simple pricing & setup
  • 14-day free trial, Cancel anytime
  • AI-powered voice features
Visit site
Read review
Rated #1 in customer satisfaction
  • First month free
  • World-class customer support
Visit site
Read review
Ooma Office
Work anywhere with mobile & desktop app
  • Reduce costs up to 50%
  • Simple plug and play set up
Visit site
Read review
Run your business through your mobile
  • 7-day free trial
  • Extension customization to forward calls
Visit site
Read review
Freshdesk Contact Center
Cloud communication for all sized businesses
  • 21-day free trial
  • Great for growing teams
Visit site
Read review
Award-winning support
  • 30-day free trial
  • Admin API capability
Visit site
Read review
Great plans for all business sizes, from $9.99
  • Free trial, Cancel anytime
  • Easy-to-use & setup
Visit site
Read review