How does voice over IP work?

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VoIP phone system: a simple explanation

Voice over Internet Protocol (VoIP) is a technology that allows people to make calls over the internet instead of traditional public-switched telephone networks (PSTN). Here’s how it works:

1

It makes the human voice internet-ready - VoIP takes analog signals (like our voices) and converts them into packets of data (coding).

2

It makes digital data human ear-ready - These packets of data are sent over the internet and converted back into analog signals (decoding).

VoIP relies on special algorithms called codecs (COder-DECoder) to code and decode data. To better understand how a VoIP phone system works, let’s compare it with a traditional landline system.

Employee participating in a Voice over IP call on mobile while away from the office

Voice over IP vs. Public-Switched Telephone Network

Landline phone systems rely on PSTN (aka traditional circuit-switched phone networks) to make calls happen. That’s not the case with VoIP, which uses packet-switched networks. What’s the difference?

  • PSTN (circuit switching) - When person A calls person B, the network tries to find a connection from different circuits (sort of like paths or trails with gates). Once a connection is established, the conversation takes place and the circuit stays open until the call is finished.
  • VoIP (packet switching) - When person A calls person B, person A’s voice signals are broken down into data packets (as explained above). Each packet contains the source and destination addresses (where the message comes from and where it’s going). This is important, since the packets may take different routes. When they arrive, the destination device (phone or computer) reassembles them into person A’s original voice signals. The same thing happens to person B’s voice signals as the conversation goes on.

Fun fact: If you’ve heard of POTS, don’t be confused. It just means “Plain Old Telephone Service,” which is another way of saying PSTN. Yes, POTS and PSTN are the same thing, and the terms can be used interchangeably.

There are other differences between how PSTN and VoIP connect calls too, which really show the dissimilarities between landline and VoIP phone systems. Here are some of them:

Basis for comparison PSTN VoIP
Pricing Cost depends on time and distance because it’s harder to keep circuits open when voice signals take longer to reach their destination (because of this, long-distance and international calls tend to be more expensive) Cost depends on the plan set by providers (which is usually customized to your needs), not on time and distance
Extra features (call waiting, call transfer, caller ID, etc.) Available for an extra cost Typically included in the service
Extensions Requires additional hardware and dedicated lines Can be added, deleted, or reassigned within the software (sometimes for free)
Multimedia support Only allows voice calls Allows voice calls and other forms of multimedia communication, such as SMS and web conferencing
Emergency calling Emergency calls are traceable because the number is associated with a physical address Emergency calls aren’t traceable, although some providers have found a way to support emergency calls (ask your provider about it)
Call quality Call quality is consistent A problem in VoIP’s early days, but this has improved drastically over the years (more on this later)

In terms of call quality, there’s been a persistent myth that VoIP is inferior to PSTN—one of the main reasons why some businesses are still reluctant to make the switch. This hasn't been true for the last decade, especially now that top providers are delivering HD quality VoIP calls that’s comparable to sound quality old-school phones. However, a few factors that can still affect VoIP call quality.

VoIP call quality: Common issues and how to fix them

Because VoIP relies on the internet, it needs a reliable broadband connection. The good news is, there are things you can do to fix an unreliable connection.

Choppy audio

There are few things more annoying than being on a call with a choppy audio signal. Now imagine that it’s an angry customer hearing the stuttering audio of your customer service rep’s voice. Your chances of winning back that customer? Pretty slim.

Common causes Possible solutions
Insufficient bandwidth Turn off other devices connected to your network.

Close other apps that eat up your bandwidth.

Test your bandwidth speed (there are free services for this).

Test for malware or spyware infection (there are free anti-malware/spyware software programs out there).
Improperly prioritized Quality of Service (QoS) * Adjust your router’s QoS to prioritize VoIP traffic over other types of traffic (like streaming and downloads).

Echo

Have you ever experienced hearing your own voice or the voice of the other person echoing through the speaker during a call? That happens when a person’s voice takes longer to reach the listener’s ear, causing an audio delay (also called latency). In a video conference, the delay could result in the audio and video being out of sync.

Common causes Possible solutions
Acoustic interference (volume on the earpiece is too loud, overpowering the mouthpiece) Cover the mouthpiece or microphone. If the echoing stops, turn down the volume of your earpiece.
Electromagnetic interference (VoIP hardware might be too close to each other) Make sure your phone, computer, router, power strip, and other VoIP equipment aren’t too close to each other.
Electromagnetic interference (from splitters or caller ID devices) Disconnect the splitters or caller ID devices from your phone or computer.
Faulty equipment Replace old or defective hardware.

Check for wet or damaged wiring.

Jitters

If you’ve ever heard static sounds during a call, then you’ve experienced jitters. They may have the same causes as echoes. In this case, you can still hear the other person but the extra noise makes the conversation unclear.

Common causes Possible solutions
Improperly prioritized Quality of Service (QoS) Adjust your router’s QoS to prioritize VoIP traffic over other types of traffic (like streaming and downloads).
Insufficient bandwidth (especially if it happens often) Test your bandwidth speed (there are free services).
Electromagnetic interference (VoIP hardware might be too close to each other) Make sure your phone, computer, router, power strip, and other VoIP equipment aren’t too close to each other.
Electromagnetic interference (from splitters or caller ID devices) Disconnect the splitters or caller ID devices from your phone or computer.
Faulty equipment Replace old or defective hardware (especially the power supply).

Check for wet or damaged wiring.
Improperly configured jitter buffer (device/software that eliminates jitter) You may want to replace jitter buffer hardware with a dynamic (software-based) version. Your network administrator should be able to reconfigure the system based on the issue.

Dropped calls

It’s happened to many of us—you’re talking to someone and get disconnected in the middle of a conversation. Of course, you can always call back and pick up where you left off. But that dropped call could still mean the difference between closing a sale or losing a potential customer.

Common causes Possible solutions
Insufficient bandwidth (especially if it happens during office peak times) Test your bandwidth speed (there are free services).
Improperly prioritized Quality of Service (QoS) Adjust your router’s QoS to prioritize VoIP traffic over other types of traffic (like streaming and downloads).

Knowing how to spot and troubleshoot common VoIP problems can save you time and money (not to mention the headaches). Luckily, all these issues can be averted if you do the right prep work before signing on the dotted line. For this, make sure the VoIP provider you choose will guide you from planning to migration—and has top-tier support too.

 

There are a ton of VoIP options out there, and many of them have a free trial option so that you can explore the product. For example—okay we’re a little biased, but RingCentral has been innovating and refining its VoIP services for years. 

 

Whether your business is a complex organization or a scrappy small business, RingCentral’s all-in-one communication platform has all the VoIP features you’d need. Try it out for free here.

*Quality of Service is a set of rules (or settings) that can be configured to favor certain traffic and achieve a desired level of quality. So if you adjust your router's QoS to prioritize voice calls, VoIP packets will pass through the router ahead of packets for streaming or downloading. This way, VoIP calls remain crystal clear.

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