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What is VoIP and How Does it Work?
July 17th, 2015

What is VoIP and How Does it Work?

Ian Linton

If you’re considering VoIP for the first time, you may need some guidance around the product and the technology that supports it. You’ll find many useful articles on this site about the different busi...

If you’re considering VoIP for the first time, you may need some guidance around the product and the technology that supports it. You’ll find many useful articles on this site about the different business, technical and financial aspects of VoIP. Here, we give you a broad overview to answer the question, “What is VoIP and how does it work?”

Say goodbye to fixed telephone services

VoIP, or Voice over Internet Protocol, is a telecommunication system that offers an alternative to traditional systems based on a PBX – Private Branch Exchange – and an internal network that is separate to other networks in a building.

The IP in VoIP relates to the way calls are delivered to users outside a building or a campus. These calls travel over the Internet, rather than the fixed cables operated by telecom companies.

If you use a service like Skype for business or personal calls, you are using a form of VoIP. Any calls you make to other Skype users are free – it doesn’t matter where they are in the world.

Compare that with the cost of making international calls over traditional phone networks. And, VoIP on a business scale, as we’ll explain, works on the same basis.

Calls to other VoIP users are free, and that can mean big savings on your call charges.

Make more of your networks

VoIP networks connect people inside and outside a company. The internal network can run over an existing local or wide area network (LAN or WAN) within your building or campus. As LANs or WANs are data networks, your IT team may have to upgrade them to achieve the Quality of Service and traffic prioritization needed for clear voice quality.

With this type of infrastructure in place, employees can take their handsets to any part of the site and plug-in to access their VoIP services. That gives employees much greater mobility and flexibility, allowing them to make and take calls, check voicemail or join a conference, even when they are away from their desks. With a wireless network in place, employees can have even more freedom.

An alternative to setting up or upgrading a LAN or WAN is to source your VoIP service from a cloud service provider. They provide the infrastructure so that you won’t incur any upfront costs. You pay a monthly fee to the service provider, and your employees access their service via secure Internet connections.

Connect people in new ways

For calls to contacts outside your organization, there are a number of possible routes. Calls to other VoIP users anywhere in the world travel over the public Internet and they incur no call charges. Calls to non-VoIP users travel over regular carrier routes and incur standard call charges. You can also set up links to regular users, such as branch offices or homeworkers, over routes known as Virtual Private Networks (VPNs). VPNs use the Internet as a carrier but have levels of security not available on the public network.

Extend the enterprise

You can also use VPNs to create an “extended enterprise” with customers, suppliers and other business partners. Using VoIP in this way can help you improve supply chain communications, increase efficiency and build stronger relationships with your partners.

Recent developments in smartphone capability make it possible to extend VoIP capability to your mobile employees, such as sales representatives, transport drivers or service engineers. If they have a smartphone, they can use your cell phone provider’s data networks as a lower-cost channel for voice calls and reduce their call costs. They can also access VoIP from WiFi hotspots in hotels, cafes or public spaces for occasional calls.

Hit new levels of productivity and efficiency

With VoIP networks in place, your employees can benefit from a broad range of services that improve productivity and efficiency. Presence, for example, makes colleagues aware of your status – whether you are available for calls, don’t want to be disturbed or unavailable.

Unified messaging brings together voicemail, email, text messages and Instant Messages in a single inbox. Employees can collaborate over audio, video or Web conferencing facilities. You can find out more about VoIP services in other articles on this site.

Make an informed decision

If you think that VoIP may be suitable for your business, you need to carry out a thorough assessment of the business, technical and financial aspects of your next system. How will the system benefit your company? What are the costs and potential savings, and what are the technical and operational implications of a new telecommunication system?

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