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What Is VoIP And How It Works | A Complete Guide On VoIP

A Complete Guide On VoIP And How Voip Works With Top Technical VoIP Terms

Soumyajit SahaSoumyajit Saha

The use of VoIP (Voice over Internet Protocol) has increased significantly in the past few years, especially because everyone is searching for ways to save money. The costs involved with a telephone bill have led many people across the country to ditch their landlines and rely exclusively on their cell phones. However, if you know how to use a VoIP service, you can save even more money, so keep reading to find out all about it.

In this article, we will disucss

VOIP Full Form

🏆 What Is VoIP?

Voice Over Internet Protocol or simply VoIP for short is a protocol that allows the transmission of voice packets over the internet. There are many use cases for this technology including low-cost long-distance telephone service, online phone systems, and even streaming music.

Now I know what you’re thinking, “I’ve been using Spotify for my music streaming needs since 2012!” And while that may be true it’s not really an example of real-time audio data being transmitted via a network. That’s because Spotify uses a form of lossy compression to reduce its audio stream’s file size so as to save bandwidth on your mobile device. This means that instead of transmitting the audio data in real-time it is being sent once and then Spotify fetches the audio stream itself.

However, with VoIP technologies, there is no compression for file size, which means that you are able to hear the original transmitted audio in all of its uncompressed glory when using services like Skype or Google Hangouts.

Now you may ask, “What’s the catch?” Well, because lossless streaming requires more bandwidth than lossy streaming it can be harder to find an internet service provider (ISP) that offers this type of connection. This is why many people turn to companies like for their ISP needs in order to enjoy quality voice-over-Internet Protocol calls on a reliable connection every day of the week!

When you make a call using a VoIP service, your voice is converted into digital information and sent over the network to the person you are calling. The signal usually requires translation from digital information back to analog sound before it can be received by the other party on the call.

In recent years, many businesses have been switching from traditional landline telephones to Voice over Internet Protocol systems. This switch has been driven partially by cost savings — VoIP services are typically less expensive than standard phone service — but also by increased flexibility and productivity gains.

🏆 How VoIP Works?

VoIP is a modern technology that operates through a broadband connection and allows you to make calls from one point to another over the internet. The acronym “VoIP” stands for Voice Over Internet Protocol, which means that it converts regular telephone calls into digital data packets and relays them over the internet.

How Voip Works

First of all, before we can get started with how does VoIP works, we need to understand what protocols are. This will help us become familiarized with the jargon used when referring to VoIP and will give us a better understanding of how it functions. 

Internet Protocol (IP) is the standard language that the internet uses. One of its central principles is being able to transport data packets from one location to another, without being too concerned about their ultimate destinations. This means that IP doesn’t care if you are sending an email or downloading a video – it will get them where they need to go. The methods used by IP in order to accomplish this task are called protocols.

There are two kinds of protocols: Connection-oriented and Connectionless protocols. Connection-oriented protocols establish a link between the source and destination points before exchanging any information, while connectionless protocols send out individual data packages without establishing links ahead of time. IP is considered a connectionless protocol.

The simultaneous use of IP and protocols that operate connection fully is what enables us to establish internet connections. For example, the Transmission Control Protocol (TCP) establishes end-to-end communication between two devices through three stages:

STEP 1: Synchronization

STEP 2: Connection

STEP 3: Data transfer.

Each of these stages may be completed by means of different protocols, like the File Transfer Protocol (FTP), Simple Mail Transfer Protocol (SMTP), or Gopher. This complicated network structure can get confusing for those who are new to VoIP jargon, so it’s important not to get too overwhelmed if you hear mention made of TCP/IP. Understanding this complex network structure will help you learn how does VoIP works in the simplest way possible.

Once we have established what the difference is between connection-oriented and connectionless protocols, we can now move on to how does VoIP works. For this task, there are three main components that are essential to look at Codecs, Routers, and Analog-to-digital converters.

Codecs are responsible for encoding speech signals into electronic data packets, which means they turn the sound of your voice into digital form. This process of changing analog signals into digital ones is called sampling. Sampling makes it possible to encode voice in different ways so more people will be able to understand it more clearly. It doesn’t matter if you have a deep or high-pitched voice – using VoIP gives you more flexibility with how you choose to communicate. The process of decoding a signal is called a codec, which means that it takes a digital voice and turns it into an analog. The most common way to encode speech electronically is by using pulse-code modulation (PCM).

voip codecs 1

Codecs are active components of VoIP technologies and come in different shapes and sizes. For example, you will find among them codecs specifically made for wireless devices like cell phones or mobile applications on your computer. In these cases, the audio data packets have to contend with limited bandwidths, while others have more bandwidth available to them because they must only deal with desktop users over traditional landline connections. This variance in connection types dictates which type of codec needs to be used for transmitting your voice.

Routers are necessary for transferring encoded voice packets from one source to another. They accomplish this task by using IP as a way of moving the packets from your computer to other terminals on the internet. In order to do so, routers must find a path that will enable transmission between computers, which involves going through any number of network locations until it reaches its intended destination.

Voip Routers

Routers communicate with each other in terms of layers and protocols, sometimes having a difficult time making sense of what they receive from other routers. This information is extremely vital because it allows them to determine where traffic needs to be forwarded or redirected. Routers also have an important function when it comes to quality control – they regulate data flow by monitoring activities like denial-of-service (DOS) attacks.

✅ Another important aspect of how does VOIP works is an analog-to-digital converter. The A/D converter takes sound signals from the microphone and turns them into electronic packets that can be interpreted by routers or codecs. This means that these components require A/D converters in order to function properly, which allows you to speak on your phone, computer, or other VoIP devices. When calls are transmitted over internet lines, bandwidth becomes a concern because it’s necessary for processing information in real-time. You would think there would be no place for low-bit rate audio codecs when using the internet but this isn’t always the case since they will vary depending on what devices are being used (mobile phones vs landlines).

Some of the most popular codecs are G.711, G.729, and iLBC. These encode speech in different ways depending on how they were designed – for example, one might produce better quality sound than another but use more bandwidth. Codecs vary when it comes to what they do with bits – some don’t change any data that is fed into them while others discard redundant ones or compress smaller segments into bigger ones in order to save space.

voip codecs

Codecs also convert analog signals in one direction only because this allows them to be used within VoIP networks without affecting voice quality by repeating the sampling process over again. This would mean that you’d have someone speaking on your phone or computer twice since each signal has to travel through both the sending and receiving codecs.

The entire process of how VoIP works can be broken down into smaller parts in order to get a better idea of what goes on behind the scenes. This enables you to make educated choices about which hardware or software you want to use when communicating with other people over your internet connection.

In Short, A VoIP phone works according to the following steps:

  1. When a VoIP phone receives the digital data from another device, it splits the data into information packets and puts a destination address on each packet.
  2. The converted data is then sent over your broadband line to your router.
  3. Once the router has received the data, it finds the shortest path to its destination. The packet might pass through multiple routers in order to optimize the final route.
  4. The packet is then received at the destination.
  5. The receiving VoIP phone then uses the addresses for each packet to put the packets in the correct order.
  6. The VoIP user then receiver the data as recognisable speech.

🏆 Top Technical VoIP Terms

There is a bit of a learning curve when it comes to VoIP. With new technologies and buzzwords always emerging onto the scene, those getting started with VoIP might find themselves with more questions than answers. That’s why we’ve created this list of 10 of the most common VoIP terms that business professionals should know.

🔥 Bandwidth – The bandwidth of a network connection determines how quickly data can be sent between devices on the network, so it’s important to have enough of this essential resource for all connected devices. This is usually measured in bits per second or megabits per second (Mbps).

🔥 Codecs – A codec is any device or program that compresses and/or decompresses information, such as an audio file. This is necessary to save space when sending data over a network. There are two types of codecs: lossy and lossless. A “codec” can also refer to the process of compression and decompression.

🔥 DSL – DSL stands for digital subscriber line or a type of internet connection that uses existing telephone lines to provide fast data transfers at affordable prices.

🔥 IP – Stands for Internet Protocol which is the way that computers send and receive information across the Internet. This is essentially how VoIP devices communicate with each other over the network.

🔥 IVR – Short for Interactive Voice Response, an IVR system allows users to interact with a device by pressing buttons in order to navigate through voice menus.

🔥 Latency – This term describes the amount of time it takes for information to be sent from one point to another. High latency can result in audio delay or echo during a VoIP call, which is why it’s important to keep this number as low as possible.

🔥 PBX – Short for Private Branch Exchange, a PBX is a phone system that connects all internal voice and data lines within an organization, allowing employees to make telephone calls much more efficiently.

🔥 SIP Trunking – Also known as Session Initiation Protocol, SIP Trunking is a technology that allows an office to use data lines for phone calls instead of traditional telephone lines.

🔥 Softphone – A software-based telephone which can be used on desktops or mobile devices. It’s essentially the same as using a regular phone with VoIP features, but it works over the internet instead of through a traditional phone line.

🔥 VoIP – Short for Voice over Internet Protocol, which is very much exactly what it sounds like: the transmission of sound information using an IP network.

🏆 What Are The Advantages Of Using VoIP?

In recent years, VoIP usage has been growing due to its numerous advantages. One of the most common ways to use VoIP is through a broadband connection. However, if your organization uses a dial-up modem or does not have internet access, you can still take advantage of these benefits with a software phone.

VOIP Advantages
Here are some of the advantages of using VOIP Service.
Lower Costs
Using VoIP instead of the traditional phone system can save you money. You will not need to buy business telephone systems or hire an outside company to maintain them. If your entire company is connected to the internet, they can use the service for free.
Increased Accessibility
With access, employees are able to answer calls no matter where they are located in the world, allowing them to work from home if needed. They can also make outgoing calls without having their own line; however, users will need to purchase a headset and software in order to do so. This means that when traveling or working remotely, you can still be available at even less expensive than before. A virtual number may also be purchased online which will forward the call to your computer.
Complete Portability
Instead of installing new telephone systems, VoIP can smoothly be integrated into any software application on an existing device like a mobile phone or computer using virtual private networks (VPN). A VPN can link multiple offices together even if they are not connected via traditional internet connections. This allows employees to work together more easily, especially when moving between locations.
Higher Scalability
Scalability refers to the ability to expand or contract with ease. Many businesses require long-distance capabilities and additional extensions, which may be difficult for traditional phones to handle due to hardware requirements. A typical VoIP system has unlimited growth potential because it uses your network’s broadband connection instead of dedicated lines that are more costly to maintain.
Advanced Features
The features available with VoIP are beneficial for both small and large companies. Single-number reach allows employees to answer calls anywhere within the company simply by dialing one number. It also allows businesses to manage their customer interactions, view call reports, store private information, handle messages using voice mail or e-mail, and organize contacts easily through the address book feature. That way, your customers don’t need to remember multiple numbers; instead, they only need the one you assign them for easier access.

Additionally, conference calls can be used by up to four people at once including yourself. Since you’ll be able to see who is on the call in real-time via an application like Skype, you’ll never have to worry about being on hold. This allows businesses to communicate more effectively.
Clearer Voice Quality
VoIP uses compression technology which enhances the quality of your call by removing less important background noise, allowing for a clearer conversation.
Supports Multitasking
Since you are able to make calls right from your computer, users are no longer limited to one phone. Employees can multitask while on a call by sending e-mails or working on other projects without having to be physically present in the office.
More Flexibility with Softphones
Offices that use VoIP often choose to switch over to softphones instead of traditional hardware phones because they do not need any specific software or devices. These applications reside directly on your computer and offer many features just like those found in normal phones such as caller ID, speakerphone, and speed dialing. The lack of hardware equipment decreases costs as well as improves accessibility since employees will always have their phones readily available wherever they go.

🏆 How Does VoIP Work With Different Devices?

Having a home telephone system is very common around the world. However, we’ve seen that IP technologies are replacing conventional communication systems and telephony is not an exception. The technology of Voice over IP (VoIP), has gained popularity in recent years and it provides users with lots of money-saving benefits and opportunities to communicate with each other from any place on earth using the Internet connection. This section of the article will show how VoIP works when different devices are used.

👉 Analogue Telephone Adapter: In order to use VoIP you need a broadband internet connection and an analog telephone adapter (ATA). It converts your analog phone line into a digital signal which can be transferred through the Internet network. After this conversion occurs, it’s time to connect your phone to the device.

Voip Analog Telephone Adapter

👉 VoIP Handset: In case you want a phone working as a VoIP client then an analog telephone adapter is not necessary for this purpose. You can use a special digital handset that will connect directly to your internet cable or wireless router. Connect it and you will be able to make free calls. There are so many models of this type of phone on the market, but some of them have additional functions such as calendar, address book, and other useful applications which make life easier.

VoIP Handset

👉 Smart-Phones: If you have a smartphone, it already includes all the hardware elements needed for VoIP connection, including Wi-Fi compatibility and apps required for video calling. All you need to do is download an app (SIP client) for VoIP calling.

👉 Computers and Laptops: If you want to make video calls or conference with your co-workers, you can use your computer or laptop for this purpose. It’s really easy because all the hardware elements needed are built-in inside modern devices. For a better audio connection, an external microphone is useful but it is not necessary if you just need to chat with friends via video calling.

I hope, now you have a basic idea about VoIP. So if you want to shift to VOIP and searching for the best VOIP service providers, then here are my top picks.

🏆 Top VoIP Service Providers



Mobile And Desktop App
Business Texting
Call Forwarding
VOIP + Wifi Calling
Custom Greetings


Easy to use
HD Audio
Easy Management
Work From Anywhere
Video Conferencing


iOS & Android mobile app
One-click conference calling
Advanced VoIP conferencing


Easy Setup
Team Collaboration
FREE Mobile App
Big Business Features
8x8 VoiP


Support For A Mobile Workforce
Improves Customer Service
Easy To Deploy, Manage And Use
unlimited global calling


Call Queuing
Call Recording
Number Porting
Call Masking
Conference Calls
Dialpad VPN


Custom IVR
Business text messaging
Conference Phone
On-premise Gateway


Chat And Video Conferencing
Virtual Presence Indicator
Robotic Process Automation (RPA)
Employee Polling
Verizon Voip

Verizon VOIP

Auto Attendant
Administrator web portal
End-user web portal
Avoxi Voip


Cloud Call Recording
VoIP Auto Attendant
VoIP Number Porting


Powerful Control Panel
Dialer Traffic Welcome
Real-Time Call Data Records
Tier-1 Redundant Network
Freshwork Voip


Call Masking
Deflect Calls with Voicebots
Automate Your Call Routing
Freshcaller mobile app


Remote work Apps
Integrated Call Center Solution
Business Text Message
Integrated Video Conferencing
JusiDial VOIP


Call Analytics Dashboard
GDRP Compliant
Call Queue
Record Phone Calls


Record and Archive
Inbound Voice Recording
Cloud Telephony
Interactive Voice Response
Zoiper Voip


Unified VOIP Communication
Supports Click-2-dial CRM integration
Compatible with macOS, Linux, or Windows. iOS, Android.


Easily customizable
Weave Analytics
Dedicated multi-location platform
Allows Call recording, tracking, and forwarding.
Customized Plan
Read Full Review


Unified Communications
Enhanced Mobility
Secure and compliant
Customized Plan
Read Full Review


VOIP Business Landline
Call Recording
Call Barring
Extension Dialling
Customized Plan
Read Full Review
Vonage Voip

Vonage VOIP Provider

Vonage Extension App
Dedicated Fax Line
Enhanced Call Forwarding


VOIP got very popular lately due to the fact that it is both cheaper and easier (due to the internet infrastructure and wide availability of IP-capable devices) than traditional telephony services. No wonder then, that many people use VoIP as an alternative for their regular phone service.

Hope you liked this article on VoIP. If you have any questions. you can leave them in the comment section below. I will be happy to respond.

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Soumyajit Saha

Soumyajit Saha

Soumyajit is addicted to quality and has a passion for turning data into meaningful information. As a forward-thinking, technology-driven, and brilliantly creative software Analyst and Tester, he knows what it takes to ‘productize’ an IT solution or concept. Experienced in functional testing, quality testing, and front-end testing for Software Quality Assurance (SQA). Skilled at analyzing logs, generating thorough reports, and identifying any failures. Besides being a tech freak, he loves football and has a deep interest in Arts and Painting.

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