What is VoIP

Voice over Internet Protocol, which is also commonly referred as VoIP, is a set of technologies that enable voice calls using the internet connection as the transmission medium instead of the traditional telephone landline system, PSTN (Public Switched Transmission Network).

The term VoIP was coined by VoIP forum which was setup in May 1996 to ensure product interoperability and develop a high quality of service for internet telephony products. It is also sometimes referred as IP Telephony because it uses IP protocols to enable enhanced voice communications throughout the organization. The traditional PSTN uses circuit switching where a dedicated channel is setup between two points before users can talk to each other whereas VoIP uses IP protocols to convert the voice signals into digital signals that travels over the public internet or a private data network.  A Basic VoIP service allows users to make and receive calls over the internet for free whereas Interconnected VoIP services also allows users to make as well as receive calls from the telephone landlines usually for a monthly service fee. The dedicated VoIP phones are used for interconnected VoIP services but landline phones can also be used using a special adapter. 

VoIP Working

The basic process involved in a VoIP calls is:

  • The caller’s analog voice signal is converted to digital signal.
  • The digital signal is compressed and translated into discrete internet protocol packets.
  • The discrete packets are transmitted over the internet or IP-based private networks.
  • The packets are re-translated into an analog voice signal for the call recipient.

The digitization and transmission of the analog signal into discrete packets is carried out over a digital data network such as LAN, a leased network, the PSTN or public internet which carries discrete data packets using IP or other internet protocols such as H.323, SIP etc. The compression process is done using codec which is a voice-encoding algorithm that allows the call to be transmitted within the network’s available bandwidth. The codec is provided by VoIP software which also manages the call routing to ensure that the call reaches its proper destination.

Implementation of VoIP Services

VoIP can be implemented in various ways:what is voip

  • PC to PC: Both the caller and recipient can talk over PC using headsets plugged in to their PC. Ex.- Skype
  • PC to PSTN: The recipient receives the call in the traditional way whereas caller can converse over PC using headsets.
  • PSTN to PSTN: The calls can be made from PSTN telephones in the conventional way using an IP adaptor. The call travels over an IP network instead of PSTN switching network.
  • IP Phone to PSTN:  The calls are made using IP phone and the call transfer from the IP network to the telephone network via a gateway.
  • IP Phone to IP Phone: The call transmits over an end-to-end IP network.

Benefits of VoIP

Cost Reduction: VoIP telephony helps in reduction of regular phone bills considerably every month and is much cheaper than the traditional telephones. The regular maintenance charge and call rates of traditional telephones are very expensive. VoIP calls are cheap as they send voice over the internet in the form of data. They are especially useful for long distance and overseas calls. One can save upto 50% on national calls and upto 90% on international calls using VoIP technology.

Portability: VoIP telephony is portable and is not restricted to a particular physical location like traditional telephones. The users only needs a broadband internet connection to access the VoIP technology. This feature of anytime, anywhere access is very useful for tele-workers and is helping VoIP in gaining popularity.

Advanced Features: VoIP provides advanced features like advanced call forwarding, electronic messaging, custom auto-attendant, multi-conferencing, video conferencing and Advanced Call Distribution (ACD). It also provides features like online call monitoring, tracking and online phone system access to add or configure extensions.

Flexibility: VoIP services can scale immediately according to the business’ needs. The customers can make changes to the system without relying on technical assistance by making changes directly over the internet console or by informing service provider. The users can add new functionality, install new phones and even set call-routing preferences. They can also record and archive calls on the computer system according to the requirements.

Improved Productivity: The VoIP technology improves agility and productive gains of the organization. It helps in better integration with communication technologies such as Customer Relationship Management software and Outlook. It brings the employees together and increases the productivity across sales and support functions. It also combines different data types and make routing and signaling more robust and flexible.

Fax over IP: The high cost for long distance, attenuation of quality, and incompatibility between communicating machines are some of the issues related with the fax services over PSTN. VoIP uses real-time fax transmission by converting data into packets and ensure complete delivery of data in a very reliable way.

Limitations and Challenges with VoIP

Security and privacy: The security of PSTN networks are very good as their infrastructure has been build over the last hundred years and provide robust communication. However VoIP security standards are not upto the mark as many of VoIP service providers still don’t offer any level of encryption for the data send or received. The discrete digital packets can be easily intercepted and decompressed. Phishing, spamming and call tampering are serious issues related with VoIP.

Reliability of service:  VoIP is relatively a new technology compared to PSTN and hence is affected by many factors such as ISP problems, connectivity etc that may fail or doesn’t function properly occasionally. As VoIP depends on the wall outlet for its power source, if there is local power outage then VoIP service may suffer setback unlike PSTN telephone service which have backup generators to ensure that the telephone system stays up and keep running.

Delays and Jitters:  VoIP transmits voice signals in form of discrete digital packets and can go through thousands of different routes and distort, resulting in jitter & delays of the sound which could make the call an awful experience.

Emergency calls routing: It is difficult to connect directly 911, 100, 108 and other emergency services using the VoIP software. The emergency operators are unable to perform trace operations on calls originating from an IP telephone or computer, so it may be difficult to trace if the caller can’t identify the exact location.

Legal issues:  As the PSTN services are owned by government in majority of the countries, high taxes are imposed on the use of VoIP service and even banned in some countries, in fear of the people switching completely to VoIP services and decrease in the state income. For example, VoIP services are blocked in UAE, while it is possible to use VoIP in India but it is illegal to have a VoIP gateway in India.

In the end..

Future Scope of VoIP   

  • VoIP is relatively a new technology compared to PSTN, which has been developed over a century. With increasing innovations and development of technology, VoIP will integrate with business and educational organizations.
  • According to the survey conducted by a consulting firm Meta Group of Stanford, 90% of large companies are expected to use VoIP services within three years.
  •  VoIP services will be integrated with mobile handsets resulting in better service and very low call rates.
  • There is the possibility of free internet telephony as it is nothing more than the data exchange.


While VoIP sounds like a very promising technology it is not completely facilitated and standardized to be completely dependable or to be used as a full alternative to PSTN service. However it does represent the future form of communication it also should be noted that many services can be integrated within VoIP like video calls. The market has seen recently many products related to VoIP like mobile phones that operates on both GSM and Wi- Fi or internet connection thorugh 3G networks also new products that uses WVoIP (Wlan VoIP) that operated wirelessly using Wi-Fi hotspots.  With more development and as the technology advances VoIP could be the standard for telephony communications.