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A Beginner's Guide to Voice over Internet Protocol (VoIP)

June 10, 2024


Imagine a world without communication: business would grind to a halt, governments would be paralyzed, and even personal connections would be strained.

Thankfully, communication has come a long way from drums, pigeons, and smoke signals. We take it for granted today, but crystal-clear voice calls, instant text messaging, and video chats across continents all rely on one powerful tool: voice over Internet protocol (VoIP).

Today, VoIP providers offer a robust suite of telecommunication tools. But how did this technology come about? How does it work?

Let's find out.

How does VoIP work?

When you speak into a VoIP phone or a phone connected to an Analog Telephone Adapter (ATA), your voice is converted from an analog signal (electrical waves) into a digital signal (a series of 0s and 1s). This digital signal is then chopped up into small data packets containing your voice data, along with instructions on where they need to go.

Session Initiation Protocol (SIP) helps establish, manage, and terminate your call by sending these packets to the right destination. These data packets travel over your internet connection, just like any other data on the web. This is where VoIP differs from traditional phone lines, which use a dedicated network.

How VoIP works

Your VoIP service provider might use SIP trunking. Think of this as a digital version of the old telephone exchanges that connected calls on the Public Switched Telephone Network (PSTN). It helps manage large volumes of VoIP calls efficiently. Once the packets reach their destination, they're reassembled back into a digital signal and converted back into sound so the person you're calling can hear you.

VoIP started with voice calls, but it's become much more! Modern VoIP services can handle various types of communication, including fax, instant messaging, SMS, and even video conferencing!

VoIP protocols and standards

Voice over IP relies on a network of protocols and standards to ensure smooth operation behind the scenes.

Core VoIP protocols

VoIP relies on several core protocols to facilitate communication over the Internet. They are directly involved in establishing, managing, and transmitting voice communication over IP networks: 

  • Session Initiation Protocol (SIP): Initiates, manages, and terminates multimedia sessions like calls. It's the conductor of the VoIP orchestra.
  • Real-time Transport Protocol (RTP): Transports voice data by breaking it into packets for efficient internet transmission.
  • Real-time Transport Control Protocol (RTCP): Monitors and ensures call quality by providing feedback on data stream performance.
  • Secure Real-time Transport Protocol (SRTP): Encrypts voice data in RTP packets for enhanced security and privacy.
  • Session Description Protocol (SDP): Describes participants' capabilities in a call, ensuring compatibility.

Supporting VoIP protocols

Supporting VoIP protocols ensures that the necessary infrastructure and protocols are in place to enable voice communication over the Internet.  These protocols provide additional functionalities and support for VoIP deployments, enhancing security, reliability, and performance:

  • H.323: Older standard for multimedia communication, including video conferencing.
  • Media Gateway Control Protocol (MGCP): Manages media gateways connecting VoIP networks to traditional mobile phone systems.

Types of VoIP

VoIP services proliferated recently and led to widespread use. Service providers started offering two types of services: fixed VoIP and non-fixed VoIP.

Fixed VoIP

Unlike mobile VoIP, Fixed VoIP offers a landline-like experience with modern features.  It's tied to a physical location and often subject to regulations like traditional phone service lines.  However, Fixed VoIP provides significant advantages:

  • Residential and commercial users can use this service to replace traditional phone lines.
  • You get features like 911 emergency dialing and real-time alerts if such a call is placed from your phone.
  • It is more cost-effective than PSTN lines, especially for long-distance and international calls.
  • There is respectability, reputation, and authenticity associated with fixed VoIP numbers.
  • The downside is that fixed VoIP is not free.

Non-fixed VoIP

Non-fixed VoIP services, or virtual phone numbers, offer flexibility but may lack stringent regulation like the Telephone Consumer Protection Act (TCPA) which makes them vulnerable to misuse.

This flexibility benefits small businesses seeking a local presence by allowing them to sign up from one location while providing an address from another. However, non-fixed VoIP provides significant advantages:

  • Anyone in any part of the world can sign up and use non-fixed VoIP for free, at least the basic services.
  • Such services are great for conferencing or collaboration between remote teams at a very low cost.
  • Individuals prefer this type of VoIP service since it is virtually free; they pay only for internet usage and can make international calls.
  • The downside is that the features are limited. Call quality may suffer.
  • Non-fixed VoIP does not enjoy the same respectability and reputation as fixed VoIP.
  • Since it is difficult to trace, users may engage in dubious activity.
  • You may not be able to make 911-like emergency calls because non-fixed VoIP is not linked to a location.

VoIP vs. landlines

In today's digital era, traditional landlines face tough competition from Fixed VoIP (Voice over Internet Protocol), offering users a range of advantages to consider. Let's delve into the key differences between the two:

Cost-wise, landlines often entail fixed monthly fees, long-distance charges, and additional costs for features like voicemail. On the other hand, Fixed VoIP plans typically offer bundled packages with unlimited local and sometimes international calls at a flat monthly rate, often including features like voicemail, making it a more cost-effective choice.

Regarding features, landlines provide basic functionalities like call waiting, caller ID, and voicemail, with advanced features requiring additional equipment or upgrades. In contrast, Fixed VoIP boasts various features such as voicemail, call forwarding, call recording, video conferencing, and integration with business productivity tools, all typically included in the base plan.

Fixed VoIP also excels in flexibility. While landlines tie users to a physical location, Fixed VoIP allows calls to be made and received using a dedicated IP phone at the location. Many providers offer mobile apps for on-the-go usage.

Setup processes also differ. Landline installation can be slow, requiring a technician visit for physical connection setup, whereas Fixed VoIP setup is typically faster and easier, often offering self-installation options.

Regarding regulation, landlines are subject to stricter regulations ensuring consumer protection, while Fixed VoIP services may have fewer regulations. Therefore, selecting a reputable provider with a good track record becomes essential when opting for non-fixed VoIP services.

VoIP features

VoIP has revolutionized business voice communication, leaving traditional landlines in the dust. But to truly harness its potential, understanding key features and their applications is crucial.

Let's explore these features and see how they can empower your business:

  • Call forwarding: Never miss a call! Based on pre-defined rules, divert calls to a voicemail box, another phone number, or even a mobile device. This ensures you're always reachable, even when busy or on the move.
  • Call recording: Record important conversations for training, quality assurance, or legal purposes. Configure options for automatic or manual recording of all calls at the user's discretion.
  • Auto attendant: This person greets callers professionally with automated greetings and directs them to the appropriate extension or department, enhancing efficiency and reducing reliance on receptionists.
  • Local presence without local offices: Establish a professional presence in any region. Choose customizable area codes to attract customers in specific markets without the overhead of a physical office. This flexibility reduces costs while expanding your reach.
  • Mobile integration: Free yourself from the desk! Receive calls on any device with an internet or Wi-Fi connection, be it a smartphone, laptop, or tablet. This empowers a mobile workforce and fosters a positive image of accessibility.
  • Integration with customer relationship management (CRM) tools: Enhance customer service by integrating your VoIP system with your CRM software. This allows for automatic caller identification, call logging with customer data, and improved overall customer experience.

Advantages of VoIP

VoIP offers many advantages over traditional phone systems, from cost savings to enhanced flexibility and scalability. Explore these advantages and understand how they can empower your communication strategy.

  • Cost-effective: VoIP typically offers lower rates for local and international calls than traditional phone services, resulting in significant cost savings for businesses and individuals.
  • Flexibility: VoIP allows users to make and receive calls from any internet-connected device, providing flexibility and mobility. Users can easily switch between devices without disrupting communication.
  • Integration: VoIP can seamlessly integrate with other business applications and systems, such as CRM software, email, and collaboration tools, streamlining workflows and enhancing productivity.
  • Eco-friendly: VoIP requires less physical infrastructure than traditional phone systems, reducing energy consumption and carbon footprint and making it a more environmentally friendly option.

Disadvantages of VoIP

While VoIP phone systems offer numerous benefits, it's essential to understand its limitations and potential challenges. By examining these drawbacks, you'll gain a comprehensive understanding of VoIP's limitations and be better equipped to mitigate any potential issues:

  • Dependence on Internet connection: VoIP relies on a stable Internet connection, so service quality may suffer during poor Internet connectivity or network congestion.
  • Power outages: VoIP systems may become inaccessible during power outages unless backup power sources like Uninterruptible Power Supply (UPS) are in place.
  • Emergency calls: VoIP may not always provide accurate location information for emergency calls compared to traditional landlines, potentially delaying emergency response times.
  • Security concerns: VoIP calls are susceptible to security threats such as hacking, eavesdropping, and identity theft if proper security measures like encryption and authentication are not implemented
  • Compatibility: VoIP systems may not be compatible with regular phones or certain older hardware or software, requiring upgrades or replacements to ensure compatibility.

What equipment do you need to set up VoIP? 

While VoIP's hardware requirements are less extensive than those for traditional phone lines, having the right equipment is crucial for a smooth and efficient VoIP experience.

  • High-speed Internet connection: A dependable and fast Internet connection forms the foundation of VoIP. Optimal call quality and smooth operation hinge on a reliable internet connection. While standard Digital Subscriber Line (DSL) or cable internet may suffice for basic use, fiber optic connections offer superior performance for VoIP calls.
  • VoIP phones: These physical handsets are purpose-built for VoIP calls. Resembling traditional landline phones, they connect to your network via an internet cable rather than a phone line. Many VoIP phones boast features like caller ID, call history, and voicemail.
  • Router: While most homes and businesses already possess a router to connect devices to the internet, some VoIP providers recommend routers with Quality of Service (QoS) prioritization features. QoS ensures VoIP traffic receives network priority, mitigating the risk of call quality degradation during other internet activities like video streaming.
  • Analog telephone adapter: An ATA is necessary to utilize existing analog phones with VoIP service. This device links traditional phones to the internet network, enabling VoIP functionality.
  • Headset: Particularly beneficial for softphone users, a headset with a microphone facilitates hands-free communication during VoIP calls.
  • Power over Ethernet (PoE) switch: This switch provides data and power to VoIP phones via a single Ethernet cable, simplifying installation and eliminating the need for individual power adapters.

How much does VoIP cost?

When selecting a VoIP provider, several factors must be considered to ensure the best value for your investment. Different providers offer varying pricing structures, so comparing plans and features is crucial before deciding.

Basic plans may be cheaper but offer limited features, while more advanced plans with features like call recording, video conferencing, or voicemail transcription will naturally cost more.

Additionally, the number of users on your plan can impact the overall cost, as many providers scale their pricing based on the number of users. While some providers offer free softphone options, traditional VoIP phones or additional equipment like headsets can add to the cost, so evaluating your team's needs is essential when selecting a plan.

International calling rates can vary depending on the provider and the destination country, so review these rates if your business frequently makes international calls. Lastly, beware of hidden fees like setup charges, per-minute call rates, or early termination fees, and read the fine print before signing up to avoid unexpected expenses down the line.

Best VoIP providers in 2024

Selecting the right VoIP provider is important for businesses seeking reliable, feature-rich communication solutions. Whether you're a small startup or a large enterprise, finding the best VoIP provider can significantly impact your communication efficiency and effectiveness. 

There are many factors to consider when choosing from the best VoIP providers but to be included in this category, the software must:

  • Provide VoIP Private Branch Exchange (PBX) systems tailored for businesses and/or offer a VoIP softphone application.
  • Offer any required hardware to support the solution.
  • Include features designed to regulate incoming calls effectively.

*Below are the top 5 leading VoIP providers from G2’s Spring2024 Grid® Report. Some reviews may be edited for clarity.

1. Zoom Workplace

Zoom Workplace is famous for video conferencing, and it also provides a cloud-based phone system, essentially a VoIP service integrated with its existing platform. It lets you make and receive phone calls directly through the Zoom app on any device, whether your computer or mobile.  Even better, you can effortlessly switch between voice and video calls within the same platform, eliminating the hassle of juggling separate apps for your communication needs.

What users like best:

"Zoom stands out as one of my top choices due to its excellent video quality and intuitive interface. Their customer support team is responsive and reliable, boosting user confidence. Whether it's integrating with calendars, project management tools, or other collaboration platforms, Zoom ensures seamless experiences for its users."

Zoom Workplace Review, Amit S.

What users dislike:

"Zoom has useful scheduling features, but its interface is clunky and outdated. It's hard to navigate and lacks customization options. The mobile app is also lacking which makes on-the-go scheduling difficult. Plus, there's pushy marketing for premium upgrades you may not need."

Zoom Workplace Review, Pranav K.

2. Nextiva 

Nextiva is a business-centric VoIP provider renowned for its cloud-based phone systems with essential features such as call forwarding, voicemail, and auto attendants. These functionalities streamline business communication and enhance customer accessibility and satisfaction. Moreover, Nextiva's VoIP systems seamlessly integrate with various business tools like CRM software and foster a unified communication platform for businesses of all sizes.

What users like best:

"Nextiva offers a comprehensive service for designing and implementing custom contact center phone systems. It's user-friendly and a welcome competitor to Comcast. Their customer service is consistently helpful, and I've never had a bad experience with them."

Nextiva Review, Robert T.

What users dislike:

"Nextiva's service is plagued by bugs and glitches. Its apps and features often malfunction or require frequent troubleshooting. Accessing call recordings and transcripts is difficult, and the setup process for new users is long. The tech feels outdated, with band-aid fixes instead of addressing fundamental issues."

Nextiva Review, Steven C.

3. Webex Calling

Webex Calling is part of the Cisco Webex suite and integrates seamlessly with Webex features like video conferencing, instant messaging, and file sharing. Webex Calling takes VoIP calling a step further by integrating it with video conferencing. This combined solution empowers businesses to have a more versatile and collaborative communication experience.

What users like best:

"Using Webex allows me to easily handle long-distance calls from my business phone, all securely hosted in the Webex cloud. It's great for keeping a comprehensive call history, and I feel secure with its encrypted calls for top-notch security. The corporate interface is user-friendly, and the calls are consistently high-quality. Everything runs smoothly within Webex, making it a reliable choice for business communication."

Webex Calling Review, Nency D.

What users dislike:

"Webex's reliance on PSTN or Integrated Services Digital Network (ISDN) for call rerouting is limited. Integrating with other vendors for Session Border Controller (SBC) solutions or offering API integration to manage SIP trunk traffic could enhance flexibility and efficiency. This would streamline operations and provide users with more options for managing their communication infrastructure."

Webex Calling Review, Gerardo H.

4. OpenPhone

OpenPhone is a cloud-based phone system. Its features and pricing are specifically tailored to small businesses, startups, and businesses that don't require a super complex phone system. It offers ease of use, affordability, and features specifically designed to address their communication needs. This makes it a compelling option for businesses looking for a straightforward and cost-effective way to enhance their communication infrastructure.

What users like best:

"The service's value is excellent. It provides the convenience and features of a business number at a price comparable to a home phone. Compared to what I was paying my internet provider for a basic home phone, this offers far more functionality at the same cost. It's a simple and effective solution for my communication needs."

OpenPhone Review, Darin F.

What users dislike:

"Navigating settings on the mobile version can be tricky, especially when working remotely without a computer. It's a common issue with messaging apps, but there's still room for improvement in making settings more accessible on mobile devices."

-OpenPhone Review, Hannah V.

5. GoTo Connect

GoTo Connect integrates core functionalities like VoIP calling, video conferencing, and messaging into a single platform. This unified approach fosters better collaboration within businesses. This unified approach fosters better collaboration within businesses.

What users like best:

"The program is easy to use and rarely gives me trouble. When I do have issues, the support team is quick to help, like when we had a problem with GoTo. I've been using it for over two years now and have had a good experience, even using it on my phone and in different places. Shoutout to the tech support team for making it easy to troubleshoot."

GoTo Connect Review, Richard L.

What users dislike:

"Technical support was unresponsive and dismissive. Clients couldn't get through, and I waited on hold for 15 minutes before speaking to a technician who didn't understand the problem. After requesting to speak to someone else, I waited another 10 minutes before giving up. I'm not sure when the issue will be fixed."

 - GoTo Connect Review,Darek B.

Click to chat with G2s Monty-AI

VoIP: Frequently asked questions (FAQs)

1. Is VoIP Regulated by the FCC?

Yes, the FCC regulates VoIP, but the extent varies. Interconnected VoIP services (connecting to traditional phone lines) face regulations around 911 calls, contributing to universal service funds and consumer protection. However, non-fixed VoIP (virtual numbers) may have fewer restrictions, potentially increasing the risk of misuse.  Always choose reputable providers for a secure VoIP experience.

2. Can I use my existing phone number with VoIP?

In most cases, yes! You can transfer your existing phone number (porting) to a VoIP service provider. This allows you to keep your familiar number while enjoying the benefits of VoIP.  Just check with your chosen VoIP provider to ensure they offer number portability and inquire about any potential fees or limitations.

3. Who can I call with a VoIP service?

The specific capabilities depend on your chosen plan, but most VoIP providers offer flexible options to connect with anyone on the global phone network.

4. How to avoid VoIP issues? 

For a smooth VoIP experience, prioritize a reliable internet connection and choose a VoIP provider with quality service. Ensure your devices (phones, computers) are compatible and up-to-date. Consider using a router with Quality of Service (QoS) to prioritize VoIP traffic. Look for providers with strong security measures and be wary of non-fixed VoIP services with fewer regulations.

5. Are VoIP texts and calls expensive? 

VoIP calls are generally much cheaper than traditional landlines, especially for long distances.  Plans typically offer unlimited local calls and competitive rates for international calls. Texts may be included in the plan or offered at a low per-text rate. The overall cost depends on your provider, plan, and calling destinations, but VoIP is known for significant cost savings on phone bills.

Take your phone system to the cloud!

VoIP is the present and future. With 5G on the horizon and the rise of the Internet of Things, a world of possibilities awaits.  

VoIP empowers you to build a remote work ecosystem, seamlessly integrate voice and text broadcasts, and collaborate effortlessly through video conferencing.  From automated greetings to interactive voice menus, VoIP offers a versatility that puts even the mightiest Swiss Army knife to shame.  

If you haven't already, switch to VoIP and experience the future of communication, today.

Explore the latest VoIP statistics and discover how VoIP is reshaping the connectivity and communication landscape. 

This article was originally published in 2020. It has been updated with new information.

VoIP Providers Ditch the landline!

Find a VoIP provider with the features your business needs.

VoIP Providers Ditch the landline!

Find a VoIP provider with the features your business needs.

A Beginner's Guide to Voice over Internet Protocol (VoIP) Learn everything you need to know about Voice over Internet Protocol, or VoIP, and why and how it can be beneficial for your real-life business uses.
Bhagirath Sindhav Bhagirath Sindhav is a Digital Marketing Executive at Ecosmob Technologies Pvt. Ltd. He has been in this field for 3 years and is curious about technology updates and loves to pen down his thoughts about the same. He has also prepared a link-building strategy following SEO tactics.

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