What is VoIP?

VoIP Guide

VoIP is an acronym for Voice Over Internet Protocol. It is a technology which enables you to make phone calls using a broadband connection. The basic VoIP service or peer-to-peer VoIP service will allow you to call persons who use the same service like you. However, by subscribing with a VoIP service provider you can call any number - whether local, international, landline or mobile. While the basic requirements for making VoIP calls are just a PC, simple audio equipment and a broadband connection, specially designed VoIP phones and VoIP adapters help you to get a feel of traditional telephone system.

VoIP integrates both your data and voice communications within your PC using a single network. In other words, VoIP is a technology that helps you to send and receive voice via internet. In contrast with traditional telephony that converts your voice into analog signals, VoIP converts your voice into digital data and transmits in form of packets just like any other information that your PC transmits via internet.

Using VoIP, you can make calls, send faxes just by logging on into your broadband connection. As far as you use the basic VoIP service, you will not be charged anything other than your internet charges even if you call a person living in another country.

Traditional phone services charge you for the additional features they offer like caller ID, call waiting, call forwarding etc. In addition, your phone bills go up with the inclusion of surcharges and taxes.

In comparison, VoIP providers offer services at an incredibly cheaper price. It is a fixed monthly bill that includes a variety of features which come free of cost. Usually there will be different sets of monthly charges for your national calls and international calls. Within international call structure, there will be different rates for different regions.

Advantages of VOIP over traditional phone

VoIP has many useful features that make it unique from conventional telephone. The most striking feature of VoIP is that it enables number of users in a network to communicate with each other using a single broadband connection.

With VoIP, you actually get an extra telephone line. If you are using ADSL broadband, a single wire will bring everything to your home - standard telephony, broadband and VoIP service.

You can receive your incoming VoIP calls anywhere in the computer network providing that you connect your VoIP phone to internet. Unlike conventional phone which works at a fixed place, VoIP provides greater mobility to the users.

VoIP providers offer you free numbers for use. Other people will use this number to call you. So, you will have two numbers - a landline number and a number given by provider.

With VoIP service, you get free services like caller ID, 3-way calling, call forwarding, automatic redial, call screening, forwarding, multiple phone numbers etc. VoIP also provides you with voice mail service which allows you to send and receive voice data via your mail.

How does VoIP work?

Your traditional phone equipment sends your voice as analog signals over the telephone wire. On the other hand, VoIP converts your voice into digital signals which go through various processes before they reach their destination. The same processes are repeated when you get a reply from the other end.

Step 1

One of the VoIP equipment that you get when you subscribe to a VoIP provider is Analog Telephone Adapter (ATA).

Your voice is made up of analog signals and as such it cannot be transmitted over the internet unless it is converted into digital signals. ATA converts your voice into digital form by using Analog-to-Digital (ADC).

Step 2

To make the voice communication faster and instantaneous, the digital data is compressed into a standard format like G723 which is commonly used for VoIP telephony. The compression of data is done by digital signal processor (DSP) which stores the compressed data within packets.

Step 3

Now, your conversation has to travel over internet as digital packets. VoIP uses standard protocols like PPP and Real-time Transport Protcol (RTP) to transfer the data between you and another person. A protocol is a standard set by a software or hardware to enable the communication and transfer of data between two users. Generally, protocols in different IP layers are involved in data communication and each IP layer carries out a specific task to make the communication faster and efficient.

Step 4

VoIP uses two standard protocols - SIP and H.323 - to send the packets over internet. These protocols are preferred as they help the data move faster and easier even through firewalls.

Step 5

When the packets reach the other end, the compressed data in the packets is decompressed. Then, the digital data is converted into analog voice signals which are heard by the other end user.

Types of VoIP Services

Basically, there are two forms of VoIP services which you can use for making and receiving calls.


To use this service, you need some software like Skype, Yahoo Messenger or MSN messenger. All you need to do is to install any of this software and run it. It is the cheapest option as well. When a headset is plugged into soundcard in your PC, your softphone is ready for use. You do not require any special hardware.

Using softphone, you can make calls to other softphones or to landline or mobile phone. Calls between softphones i.e. PC-to PC calls are free of cost. PC-to-phone calls or vice versa are generally not free. However, if you subscribe to your VoIP providers like Skype or Vonage , you can call any landline phones or mobiles.

To setup a softphone, you will need following components:

  • A PC with speakers and microphones. Nowadays, there is a wide range of headsets, earpieces and microphones available for your use. You can either choose a fixed phone or a cordless phone or earpiece if you want to enjoy greater mobility.
  • A broadband connection. It does not matter whether it is ADSL or Cable or Wireless broadband. However, it should meet the minimum requirements of VoIP service.
  • Sign-up with a VoIP provider. You can simply download Skype or any Instant messenger Service like Yahoo messenger from the internet and install the software. You have to create an account with the VoIP provider before you use softphone.


Skype is one of the most popular softphones and nearly 2 million users are reported to be using skype. It is very easy to use. You can also get various models of broadband phone and USB phones that are compatible with Skype and you can use them instead of headsets and speakers. If you sign up for SkypeOut, you can call landlines and mobiles for a fixed monthly rental. SkypeIn offers you a phone number which enables any other person to call you.

Major features of Skype:
  • Calls from Skype to Skype are free.
  • Skype is usually ad-free.
  • You can call up to five people for conferencing

Instant Messenger services

You can also use Instant Messenger applications like MSN Messenger and Yahoo Messenger. For example, new version of Yahoo Messenger has come with various features like free voice calls, free voicemails, files download and photo sharing.

Hardware-based VoIP phone and SIP phone

The second type of VoIP service requires a dedicated hardware like Analog Telephone Adaptors (ATA) and VoIP hand sets. The benefit of this type VoIP is that you can make calls without switching the computer on. When the phone is connected to broadband via ATA, it becomes functional. To use this kind VoIP service, you have to begin an account with a VoIP provider like Skype or Vonage. Usually different providers will supply you different sets of ATAs and one device can not be used with the VoIP service provided by another VoIP provider. VoIP ATAs usually communicate with the VoIP server without the help of any software. So, this kind of VoIP calls can be made with or without computers.

To begin using this form of VoIP service, you will need handsets, ATA, and an account with VoIP providers like Skype or Vonage. You may need a VoIP router to use a number of standard phones in a VoIP setup.

What is ATA?

ATA is a device which connects a standard telephone (analog), sometimes, a network of phones to a VoIP network. Primarily ATA has two functions:

  • It encodes and decodes voice signals based on different codecs like ?-law, A-law, GSM, iLBC. This is how they convert voice signals from analog to digital and vice versa.
  • It communicates with the VoIP server using different protocols like H.323, SIP, MGCP or IAX.

VoIP router

This hardware enables you to use standard phones to make and receive VoIP calls. All you need to do is to insert phone/s into the router and configure them based on your account information.


You can choose a handset from a wide range of handsets that are available today. However, make sure the handset you choose is compatible with your service provider.

IP phones and Wi-fi phones are the latest innovations in VoIP telephony. IP phones can be connected directly to the router and can be used just like a standard phones. If you have Wi-fi router, Wi-fi phone enables you to make wireless calls.


Vonage is one of leading VoIP providers and second to Comcast in terms of subscriber lines. Presently, Vonage has more than 2.4 million subscriber lines in countries like the UK, the USA and Canada. Vonage offers various features like caller ID, call waiting, voicemail and call transfer etc. If you want to sign up for the call plans of Vonage, you are required to buy Vonage handset, ATA and router.

Pros and cons of VoIP services


Cheaper than standardard telephone service

VoIP offers many unique features that are not possible with traditional telephone service. The most striking feature of VoIP service is its cost-effectiveness. While your PC-to-PC calls are absolutely free, the calls to landline line numbers or mobiles are much cheaper than standard telephone service. Most VoIP providers come with fixed monthly low cost phone plans. If you regularly make long distance and international calls, the VoIP will also include cheap international calls in fixed monthly bill.

Greater mobility

VoIP service offers greater mobility. You need not make and receive calls at a fixed place as in standard telephone service. Instead, you can connect ATA and VoIP phone anywhere in the network where you can get internet access.

Free extra features

With VoIP service, you get an extensive list of features at no extra charge. The include caller ID, call screening, forwarding, multiple phone number etc. VoIP also provides you with voice mail service. You can send and receive voice data via email.


Your VoIP service depends on power and broadband connection

To use VoIP services, you require a PC, broadband connection and ATA and all these components require electricity. If there is power failure or if your broadband service falters, VoIP goes out of use.

You cannot make calls to emergency services

Using VoIP, you can make and receive calls anywhere in the world. This also leads to a severe drawback. The other end user would never know where you are calling from. So, most of the VoIP services would not allow you to access emergency services like hospitals, airports, restaurants etc.

No directory assistance

If you are a VoIP user, you would not get directory assistance like the standard telephone service provides for its customers and this may cause inconvenience for you.

You require a landline phone

Although VoIP can be used as an alternate for standard landline phone, still you need to have a landline phone along with it. Unless you get broadband via cable or wireless, you cannot wind up your landline service. In case of emergencies, usually landline phones and mobiles come handier than VoIP phones.

Quality dependant on internet speed

The quality of VoIP depends upon the internet speed that you get. If the speed is below the minimum requirement, the voice quality will be affected and your conversation will sound patchy.

Bandwidth-related problems

VoIP involves continuous data transfer so it will consume large amount of your bandwidth when you use it. If you go for video conferencing for a lengthy period, it may gobble up huge amount of your bandwidth. If you have signed up for a broadband package with a download cap, you should see that your VoIP calls do not make you to exceed the monthly usage limit.

Check our Broadband Networking Guide for more information about networking.