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3. What is voice over IP?

# What is Voice over IP?

Voice over IP, or [VoIP](https://www.3cx.com/voip/), is short for Voice over Internet Protocol and refers to the transmission of voice traffic over an internet connection. Traditional telephony, known as the Public Switched Telephone Network or [PSTN](https://en.wikipedia.org/wiki/Public_switched_telephone_network) for short, works through physical phone lines, cable systems and networks and allows users to make landline and cellular telephone calls. IP telephony however is much more versatile and enables voice, data and video to be transmitted to a variety of devices including smartphones, laptops, tablets and IP phones at a much lower cost.

Initial VoIP service providers offer solutions that mirror the architecture of the legacy telephone network. Second and third generation providers have either built closed networks for private user bases offering free calls, or have completely departed from the legacy telephone network architecture. VoIP solutions allow a dynamic interaction between users on any two domains on the Internet when a user wishes to place a call. To place calls via VoIP, a user will need a [software based SIP phone program](https://www.3cx.com/pbx/voip-phones/) OR a [hardware based VoIP phone](https://www.3cx.com/sip-phones/). Phone calls can be made to anywhere and to anyone: Both to VoIP numbers as well as PSTN phone numbers.

There are a variety of applications and [VoIP phone systems](https://www.3cx.com/phone-system/) that utilize Voice over IP to offer full featured business communications solutions as well as internet telephony for personal use. Examples of such products include 3CX, which offers a company communications system integrating voice, video, chat and more. Most modern device manufacturers, like Apple, have integrated native IP apps into their smartphones, such as [Apple FaceTime](https://en.wikipedia.org/wiki/FaceTime) which provides call and video functionality.

## How does it work?

Voice over IP converts data, such as voice or video, into a digital signal and transfers it over the internet as digital [data packets](https://computersciencewiki.org/index.php/Data_packet). In order to use VoIP technology, you need a VoIP service or application to facilitate the calls, internet access, and a [SIP trunk](https://www.3cx.com/pbx/sip-trunking/) or VoIP provider. Some broadband or telephony providers offer IP telephony as standard or alongside traditional PSTN services. However, most telco providers are gradually making the switch to all IP. In the case that your regular phone service provider offers VoIP solutions, you won’t need to employ a separate SIP trunk or VoIP provider.

Using packet-switched technology to transmit voice, VoIP uses a series of protocols to facilitate calls. These include the [RTP](https://www.3cx.com/pbx/rtp/) (Real Time Transport) protocol which defines a standard packet format in order to deliver media over the internet. Additionally, [SIP](https://www.3cx.com/pbx/sip/) (Session Initiation Protocol) is a signalling protocol used to establish, maintain and terminate a session between 2 or more participants. Voice and video data is broken down into packets which are sent over the internet and then reconstructed to be delivered in real-time as the original voice or video message.

## What are the benefits of Voice over IP?

Businesses that choose to use VoIP systems instead of traditional copper-wire telephone systems experience many benefits such as reducing their monthly phone costs, and increased mobility and productivity among others.

[VoIP](https://www.3cx.com/voip/) can facilitate tasks and deliver features and functionality that might be cumbersome or costly to implement when using traditional PSTN.

![voip technology benefits](https://www.3cx.com/wp-content/uploads/2019/10/voip-benefits-01.jpg)

- More than one phone call can be transmitted on the same broadband phone line. This way, voice over IP can facilitate the addition of telephone lines to businesses without the need for additional physical lines. This makes VoIP systems much more scalable.

- Features that are usually charged extra by telecommunication companies, such as call forwarding, caller ID or automatic redialing, are often included as standard with voice over IP technology. What’s more, they are much easier to configure and manage.

- [Unified Communications](https://www.3cx.com/pbx/unified-communications/) are secured with voice over IP technology, as it allows for the use of software and applications, like 3CX. Such solutions offer a whole range of communications features such as voice calls, [video](https://www.3cx.com/video-conferencing/), instant messaging, and even [live website communications](https://www.3cx.com/live-chat/).

- Used with a modern communications solution, users can take their office phone number with them wherever they go, all they need is internet access. They’ll be able to access and make use of the company phone system from their mobile device, laptop or tablet.

- A voice over IP solution provides significant cost savings over a traditional phone system. Users can take advantage of free calls and low rates for international calls and long distance.

- Organizations can boost customer service with applications which offer features to boost agent productivity and efficiency. What’s more, customers have the ability to connect with the business through a variety of channels, as well as make use of free calls to contact centers.

- It’s much easier to work with remote workers when your business has a VoIP software communications solution in place. Extensions can be added easily without any fuss and employees can be added to the company phone system no matter where they are located.

- Fax machines are an outdated device that most businesses are getting rid of. But for those who are fonder of simpler times, many modern communications solutions offer [fax to email](https://www.3cx.com/pbx/foip/), which is facilitated by VoIP.

- Whole systems are easy and cheap to implement. Without the need for extensive amounts of infrastructure, VoIP communications systems can be deployed quickly and without much cost. What’s more, with mobile apps and web clients, there’s no need for desk phones or expensive devices, making it ideal for small businesses as well as larger enterprises.

- With a broadband internet connection, a good VoIP service can provide excellent call quality with very little downtime.


## What are the disadvantages of VoIP?

- If you experience internet problems or power outages, this can result in your VoIP phone system failing to work. Additionally, poor internet connection can affect the quality of calls. For this reason, many businesses choose to opt for a dedicated internet connection for their VoIP communications.

- As an internet service, it’s vulnerable to cyber attacks. There are a number security risks including DOS attacks and eavesdropping. However, most reliable service providers and software systems implement tools and measures to protect against such vulnerabilities.


## Popular VoIP Definitions

- **VoIP** – Voice over Internet Protocol (also called IP Telephony, Internet telephony, and Digital Phone) – is the routing of voice conversations over the Internet or any other IP-based network.

- **SIP** – [Session Initiation Protocol](https://www.3cx.com/pbx/sip/) – is a protocol developed by the IETF MMUSIC Working Group and proposed standard for initiating, modifying, and terminating an interactive user session that involves multimedia elements such as video, voice, instant messaging, online games, and virtual reality.

- **PSTN** – Public Switched Telephone Network – is the concentration of the world’s public circuit-switched telephone networks, in much the same way that the Internet is the concentration of the world’s public IP-based packet-switched networks.

- **ISDN** – Integrated Services Digital Network – is a type of circuit switched telephone network system, designed to allow digital (as opposed to analog) transmission of voice and data over ordinary telephone copper wires, resulting in better quality and higher speeds, than available with analog systems.

- **PBX** – [Private Branch eXchange](https://www.3cx.com/pbx/pbx-phone-system/) (also called Private Business eXchange) – is a telephone exchange that is owned by a private business, as opposed to one owned by a common carrier or by a telephone company.

- **IVR** – In telephony, [Interactive Voice Response](https://www.3cx.com/pbx/ivr/) – is a computerised system that allows a person, typically a telephone caller, to select an option from a voice menu and otherwise interface with a computer system.

- **DID** – [Direct Inward Dialing](https://www.3cx.com/pbx/did/) (also called DDI in Europe) is a feature offered by telephone companies for use with their customers’ PBX system, whereby the telephone company (telco) allocates a range of numbers all connected to their customer’s PBX.

- **RFC** – Request for Comments (plural Requests for Comments – RFCs) – is one of a series of numbered Internet informational documents and standards very widely followed by both commercial software and freeware in the Internet and Unix communities.


### Further reading

- [What is IP telephony?](https://www.3cx.com/pbx/what-is-ip-telephony/)

- [What are SIP trunks?](https://www.3cx.com/pbx/sip-trunking/)


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