How VoIP Works

VoIP stands for Voice over Internet Protocol, indicating the ability to carry vocals over the internet. Many businesses and homes are switching to VoIP softphones because the price is significantly lower. These lower costs are great, and just knowing that VoIP really can help you save might be enough, but for those inquiring minds out there here is brief introduction to how VoIP works.

VoIP technology takes advantage of existing data networks to transfer calls letting the Internet do most or all of the work. So by paying for your Internet connection you are already paying for the networking capabilities needed to have a VoIP telephone call. This means that many providers will offer completely free phone calls for calls made from one VoIP caller to another, or PC-to-PC calls, because they are handled entirely "on-line." When you want to call someone on a land-line phone, SIP gateway providers can connect you to a local phone service. The SIP provider uses the web to get your phone call as close to the other caller as possible before connecting to a standard phone line. This virtually eliminates long-distance charges altogether, which is why the rates are so much lower.

Advantages of VoIP

• VoIP is very scalable, letting you transmit more than one telephone call on the same broadband-connected telephone line, making it easy to add extra telephone lines
  
• Because VoIP is location independent, you can take your VoIP phone with you wherever you go, provided you are connected to the Internet
  
• VoIP reduces the need for dedicated phone wiring and some of the expensive hardware needed for a complete traditional telephony system
  

Tip: When choosing a provider, it is usually better to pick one who offers service specifically in your area. If you are calling a particular country a significant amount, choosing a provider from that country can potentially further reduce your costs further.

To learn more about the technical side of VoIP you might to check out the VoIP Demystified Video where the good people at HowStuffWorks.com give some more details about how VoIP works and voice information is transferred.