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What is Voice over IP?

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A manager using voice over IP to contact her team members

The definition of Voice over IP

Voice over IP (Voice over Internet Protocol, or you may know of it as “VoIP”) is a technology that makes phone calling through the internet possible. How? By bypassing traditional phone lines and mobile networks to let you make inexpensive—sometimes free!—voice calls. All you need is a broadband connection.

Here’s how it works


The sound you make when you speak into the headset microphone (aka your “voice signals”) is broken down into smaller pieces (called data packets) for the internet to understand. Each packet carries unique information: its origin, destination, and place in the original file.


The packets reach the router (more on this later), which reviews them and sends them over the  network to where they need to be (based on their destination information).


The packets take different paths, so there’s a chance they’ll end up out of order when they reach their destination. This is where the destination device comes in. It reads place in original file information and reassemble the packets accordingly. The recreated file now goes back to being the voice signals that humans can understand.

Diagram of how Voice over IP works

A brief history of VoIP

In the late ‘60s, the Advanced Research Projects Agency (ARPA) started to develop the ARPANET, a packet-switched network for interconnecting small computers. This government-funded experiment gave way to one of the most important technologies of this era.

What to know how it all went down? Here’s a quick timeline:

  • 1960s-70s Researchers were testing a preliminary version of a packet-switching network (ARPA) while developing a more effective mode of communication for the military. During this time, the very first VoIP data packet was sent out. 
  • 1990s In 1995, the first commercial internet telephony software was created by an Israeli company called VocalTec. It didn’t take long for other tech giants to work on standardizing VoIP communications systems. By the end of the decade, VoIP was considered as the most disruptive communications technology of the time.
  • 2000s VoIP gained momentum both for home and business use. New VoIP providers were born as the older ones started to offer hosted services. In the United States, the government started to regulate VoIP communications.

Now backed by cloud technology, VoIP has gone completely mainstream. Almost every business anywhere in the world uses VoIP solutions in some capacity.

Voice over IP is still growing—who knows where it can lead businesses in the future?

What kind of VoIP hardware would you need?

One of the things that makes VoIP so easy on the budget is the fact that it doesn't need you to invest in expensive hardware (like physical cables and an on-premise PBX). But that doesn’t mean you don’t need hardware at all! Here’s a closer look at some important equipment a business might need for Voice over IP.


A business router

The VoIP router is responsible for moving data packets between devices in an IP network. Since these packets take on different paths (see diagram A), the router assigns a local IP address to every device to make sure they don’t get lost or intercepted (whoever intercepts the digital data can also listen to them).

Institutions that store personal data and other sensitive information like healthcare providers, government agencies, and law firms, are extra vulnerable to cyberattacks. Thankfully, routers can identify suspicious behavior since they have built-in encryption that protects the data within your network.

Fun fact: Many VoIP service providers use just one type of protocol. To ensure first-rate call quality, some companies, like RingCentral, employ multiple protocols.


VoIP handsets

When someone says “handset”, you’ll probably think of one of two things: the part of the landline phone you pick up and hold close to your ear and mouth during a call (it’s connected by wire to the unit), or a mobile phone.

VoIP-enabled handsets allow you to make and receive calls, much like regular phones (but with help from the internet instead of copper lines). There are many kinds of VoIP phones available in the market depending on what you need to use it for—for example, conference phones and USB phones.


Computers and mobile devices

Apart from handsets, you can also use computers and mobile devices like smartphones and tablets to make and receive VoIP calls. And as long as they have VoIP software installed, you can use them to explore other VoIP capabilities like video conferencing and online fax.



Headsets with microphones let you hear and send voice audio from your computer. This is often used with a computer running VoIP software (like RingCentral).


Analog telephone adapter (ATA)

Yes, you can still place calls over the internet using your existing landline phone!

An ATA makes that possible. This device connects your landline phone system to an IP network, automatically converting your voice into data packets that can travel through the internet.

Sounds like a money saver, right? It can be, sure—after all, this means you won’t have to replace all your phones. One thing to keep in mind, though, is that an ATA doesn’t give you advanced features the way a VoIP phone does. Without a touchscreen display, for example, you won't have easy access to directories and call logs directly on your phone.

How to make a VoIP call

One great thing about VoIP is that there’s no one way to make a call. Legacy phone systems only let you communicate from phone to phone. On the other hand, VoIP lets you call from:


Computer to computer

The process is pretty simple:

  • Download a VoIP-enabled program and install it on your computer.
  • Create an account.

That’s all you need to make a computer-to-computer call, which is free (as long as the person you’re calling is also using the same application). This setup is great for personal use but could be a problem for businesses as it typically lacks security protocols and falls short when it comes to sound quality and integrating with other tools.


Computer to phone

Here’s how you do it:

  • Have your VoIP provider enable out-of-network calls (not free, but still cheaper than services from traditional phone companies).
  • Connect to a landline phone using a computer running a VoIP-enabled program.

And that’s it! Businesses that regularly make calls to areas without a strong internet connection would benefit most from a computer-to-phone option.


Mobile apps

This option is great for remote workers:

  • Download a mobile version of a VoIP-enabled program and install it on your device. Create an account.

If you have field or remote workers, it’s probably more convenient (and will make things run more smoothly) if you have mobile apps.


Landline phones connected to an ATA

How to do it:

  • Plug your phone cable into the ATA.
  • Start making VoIP calls by picking up the handset and dialing.

Some companies use an ATA to get a feel for VoIP first before going all in.

What’s a VoIP phone service?

A VoIP phone service is a type of telecommunications service that uses the internet for different forms of communication like voice calls, fax, SMS, email, voice mail, and web conferencing (slightly different from having the software). This gives businesses the mobility and flexibility that legacy phone systems lack and helps them communicate and collaborate better.

In addition to free, downloadable VoIP software, you may also get VoIP phone services from a hosted provider. Third-party providers typically offer different plans (which include the app) for different needs and budgets.

Thinking of making the switch to VoIP?

From remote working options, to improved collaboration, to global expansion, VoIP opens up a world of possibilities for businesses no matter how big or small they are. If you want a flexible and cost-effective phone system, then it might be time to see if you should switch to VoIP.

But before jumping in, it’s always good to consult an expert. There are a ton of them online, or you can get in touch with someone from our team at RingCentral. They’re all super knowledgeable about VoIP and can walk you through what the migration process might look like  (and make it simpler for you too!).

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