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    What is VoIP & How Does VoIP Phone System Work?

    Get a complete understanding of voice-over IP technology and how VoIP calling works in this definitive guide to a VoIP phone system

    What is VoIP?

    Table of Contents

    What is VoIP?
    What is VoIP Call and How Does VoIP Phone System Work?
    What is a VoIP Caller?
    What is a VoIP Number?
    What is a VoIP Phone?
    How Much Does a VoIP Call Cost?
    VoIP Advantages and Disadvantages
    Voice over IP Features
    How to Choose the Best VoIP Provider in 2022?

    Information and communications are both the backbone of business today. For many decades, trade and business have relied on text and voice communications to pass essential information between concerned parties, to share insights about markets and consumers, and to initiate or complete transactions.

    From word of mouth and the written word through to telegrams and phone systems, modern technologies have been employed to facilitate these information flows. One of the recent developments bridging the gap between communications and data is Voice over Internet Protocol technology, also known as VoIP. VoIP combines elements of voice communication and telephony with communication paths such as messaging, chat, and collaboration.

    As Jonah Fink, President of leading VoIP provider net2phone observes: “Law firms, real estate offices, medical practices, really any type of professional service or retail business, all share the common goal of needing more features and functionality to improve their business’s communication and add savings to their bottom line. net2phone understands that voice is the lifeline of business communications today and we’re excelling at providing excellent service every step of the way.”

    What is VoIP?

    What does VoIP stand for? VoIP meaning Voice over Internet Protocol or Voice over IP, is a technology that enables the transmission of voice and other communications media such as text and video over an internet connection.

    Rather than relying on a telephone company’s wiring, IP telephony, internet telephony, or web calling converts voice and other multimedia content into digital data, which can then be transmitted over the internet, enterprise local area networks (LANs) or wide area networks (WANs). In this way, VoIP technology enables users to make voice and video calls or send various kinds of messages from a computer, mobile device, VoIP telephone handset, or any web browser that supports WebRTC.

    A VoIP phone system first converts a speaker’s voice from audio waves into digital data, then sends that data to its destination via a network connection. If that destination is a regular telephone network, the signal is converted back to a telephone signal before it arrives there.

                Video Source: Know How Now

    So what does VoIP mean for users? With the technology operating over the internet and other data networks, one of the greatest advantages of VoIP is that by leveraging the power of the cloud, VoIP providers like net2phone enable intelligent conversations with customers, suppliers, collaborators, and employees wherever they are located, and using whatever device they prefer.

    What is VoIP Call and How Does VoIP Phone System Work?

    Rather than depending on cell towers, wires, or fiber-optic cables, an Internet Protocol call is routed via an internet or data network connection. So, instead of being tied to a specific location or area code, VoIP or Voice over IP calls can be made using a smartphone, tablet, laptop, desktop computer system, or landline phone with a converter -- as long as a stable data connection is available. 

    How does VoIP work graphic

    What is VoIP Call?

    What is a VoIP call? In practical terms, VoIP call means converting your voice into a digital signal that is then transferred over a data network. At its destination, the IP call data is translated into a regular phone signal.

    In general, there are three principal mechanisms for making a phone call over the internet :

    1. An analog telephone adaptor (ATA) lets you connect a standard phone to your computer or internet connection, and acts as an analog-to-digital converter. A cable connection from your handset to the ATA (and perhaps the installation of some software, depending on the manufacturer), enables IP telephony.
    2. IP phones with an RJ-45 Ethernet connector look and feel like normal phones, but connect directly to your network router, and come with all the necessary hardware and software for making IP calls .
    3. Peer-to-peer or computer-to-computer connections use software as the medium for making phone call over internet . An internet connection, sound card, microphone, and speakers are the required physical infrastructure.

    What is a VoIP Caller?

    A VoIP caller is simply someone who is calling you using a voice over internet system, rather than a conventional phone network.

    You can identify a VoIP caller through the caller ID system of your phone. Alternatively, you can use a reverse phone look-up service. If you use a VoIP phone with a packet analyzer, this can display the IP details of each call you receive, and look up the associated IP address.

    What is a VoIP Number?

    Also known as a virtual phone number, a VoIP number is a telephone number that is assigned to a specific user, rather than a specific phone line.

    We have already observed that voice-over IP  is largely a location-independent system. Area codes have no particular relevance to VoIP phone numbers. In fact, VoIP users can choose a phone number with any area code. This enables businesses to establish a local presence in different regions, which can be very lucrative for business. 

    What is a VoIP Phone?

    A VoIP phone is a hardware or software-based device that uses voice over internet protocol technology to make and receive phone calls over an IP network.

    A hardware voice-over IP phone typically resembles a traditional hard-wired or cordless telephone, with a microphone or speaker, touchpad, and displays showing user input and caller ID. Dedicated voice over internet phone hardware usually also offers call transfer, multiparty calling, and support for multiple VoIP accounts.

    A software-based voice-over IP phone or softphone uses virtual phone software to enable IP telephony from a user’s computer system or mobile device. The software typically employs a display similar to a telephone handset, with a touchpad and caller ID.

    Please view the video below for an overview of what a VoIP call is, and how it works:


    How Much Does a VoIP Call Cost?

    Price levels for internet calling vary widely from one VoIP provider to another. General tariffs for some of the leading services compare as follows:

    VoIP calls price

    The table below gives comparative rates for international VoIP calls to various countries, with prices per minute in US dollars:

    VoIP international call rates

    net2phone offers affordable business phone system plans and pricing for any sized organization.

    VoIP Advantages and Disadvantages

    What is an advantage of using VoIP calling? As we have already learned, one of the major advantages of voice over ip calling  is being able to use a data network or internet technology for communications transmission. VoIP users can have intelligent conversations through the power of the cloud, which facilitates communication exchanges all over the world- wherever they are located, and with whatever device they prefer.  

    However, that’s just one of the plus points. In this section, we’ll take a look at the various VoIP advantages and disadvantages.

    Advantages of VoIP

    • Cost Savings: VoIP users save on the costs of installing and maintaining physical infrastructure, as they don’t need to manage the hardware and cabling associated with a conventional phone system. Using an internet connection, the cost of phone calls is also drastically reduced, when compared to traditional phone charges.
    • Flexibility and Scalability: Cloud-based VoIP phone systems allow businesses to extend full communications functionality to remote workers and geographically dispersed sites. Voice over IP services enable enterprises to quickly and easily increase or decrease their number of users and communications features, in response to changing conditions.
    • Number Portability: Most reliable VoIP providers will enable users to keep their existing phone numbers, even if they move to a different service. Voice over IP users typically have access to more numbers than with the public switched telephone network, or PSTN.
    • An Abundance of Features: As we’ll discuss in the next section, VoIP systems offer a multitude of enterprise-class communications features.
    • SIP Trunking: With net2phone’s SIP Trunking solution you are able to benefit from all that the cloud has to offer. It is not even necessary to replace your existing equipment as with SIP Trunking you can transfer pockets of multimedia data as opposed to transferring voice data only with VoIP.

    Disadvantages of VoIP

    • Reliance on Power and Internet: VoIP technology relies on a steady electrical supply, together with a fast and stable network data connection. An outage or disruption to either of these utilities can lead to dips in the performance of voice over internet, or even complete loss of the service.
    • Potential Connectivity Issues: Even though super-fast broadband and leased line connections are widely available in much of the world, there are still regions where internet connectivity is unreliable, or even non-existent. In such areas, issues with latency (data transfer delays) and packet loss can lead to a deterioration in call quality and data transmission.

    Voice over IP Features

    Voice over ip calling tends to come with many robust features when provided by a business-class VoIP system, such as net2phone. Main IP based calling features usually include, but are not limited to the following: 

    • Auto-Attendant: “Electronic receptionist” with advanced call handling and routing.
    • Video Conferencing 
    • Voicemail to Text Transcription
    • Instant Messaging (IM)
    • Email
    • SMS Text Messaging
    • Mobile and Local Number Portability
    • Presence Panel: Displays who is available to take a call, who is busy, etc.
    • Call Forwarding
    • Ring Groups: Allows all extensions in a group to ring simultaneously.
    • Incoming Call Queues: Allows calls to be distributed and routed accordingly.
    • Music On Hold
    • Call Recording
    • Call Analytics

    Cloud PBX (Cloud-based Private Branch Exchange) is a virtual internet phone system, which automatically answers all calls and routes them to the correct department or user extension.

    Concerning VoIP features, net2phone President Jonah Fink observes, “Just as the young millennials are relying on chat and messaging, we believe that the business community will do the same and we very much look forward to bringing them the ability to use alternative methods of communicating, along with our hosted voice, all in a single offering. We are constantly evolving our product set and improving our channel partner tools to meet today’s ever-changing needs as we prepare for tomorrow’s demand. net2phone is not looking to follow, we are looking to innovate.” 


    How to Choose the Best VoIP Provider in 2022?

    Which is the best VoIP provider? The answer will depend on your needs, budget, and circumstances.

    Here are some general tips for selecting the best business voice over IP providers:

    • Identify the communications features that you need most.
    • Take future expansion or business growth into account.
    • Establish the size of your budget.
    • Make a comparative assessment of voice over internet  providers, and what they have to offer.
    • Look for testimonials, reviews, and customer referrals for the providers on your shortlist.
    • Don’t forget to factor in what kind of technical support they have available.


    Do I Need a Voice-over IP Phone System?

    Look at your existing phone system and ask these key questions:

    1. Will I need to keep all of my existing system and just use adapters or converters to get voice over IP capability? 
    2. Can I replace some of the components? 
    3. Do I have to replace the entire set-up?

    If you run a small to medium-sized business in 2022, VoIP is something that you will need to elevate your communications capabilities to compete with same-size enterprises and also ones larger than your own. 

    net2phone’s small business phone system is designed to fuel growth with every conversation.

    Whether you’re working from home or the office, voice over IP provides a cost-effective and scalable business communications solution with multiple features -- and one that’s available anywhere with access to the internet.

    With PSTN (Public Switched Telephone Network) phone systems being phased out in many regions, you’ll also need VoIP phone systems to stay in line with current prevailing technology and new business norms. 

    How to Switch to VoIP?

    In order to make the switch to VoIP, you’ll need to:

    • Ensure that your Information and Communications Technology (ICT) infrastructure is robust enough to handle internet telephony. You may need to upgrade to a faster internet service -- preferably a wired broadband connection with at least 100 kilobits per second (kbps) per line.
    • Connect your VoIP call infrastructure directly to the router or switch setup for your office or workspace. Larger offices may require IT personnel to perform Virtual Local Area Network (VLAN) configuration.
    • Choose a reliable and capable service provider. The best business VoIP providers offer a comprehensive range of business communications features. They should also offer a range of hardware and software options for IP telephony, and provide expertise and support in setting up your system.

    Making the Switch to VoIP

    net2phone’s unified communications platform is more than just a business phone system. Ready to explore these cost-saving strategies along with many other benefits of voice over ip  communications? net2phone makes it easy to make the switch to VoIP with our team of experts from onboarding, to support we have you covered. We also pride ourselves with having a 99.9% uptime, so you can be assured that your business is in good hands with net2phone’s reliability. 

    Get in touch with us to learn how net2phone's powerful VoIP communications can elevate your business conversations today.