What is VOIP? How Internet Phones Work in Business

VOIP, or Voice Over Internet Protocol, is the term for a set of communication standards and technologies that allow for the transmission of voice over the internet. Although high-speed internet and market penetration has allowed VOIP phone services to take off rapidly, they may not be suitable for everyone.

VOIP, or Voice Over Internet Protocol, is the term used for the facilitation of voice communication using the same technological framework that is used to transmit information over the internet. Specifically, VOIP uses the “packet switching” technology that the internet is based on. Packet switching works like this: when a person makes a VOIP call, the audio information is split into packets of a certain size and sent between two points, over the internet network. This is the same way that a computer receives and transmits information, for instance, if the user is watching an online video or downloading an image file. When a telephone user makes a call using a telephone network, something slightly different happens. In that case, the information is transmitted constantly between the two points, in a circuit.

VOIP was originally a challenge for developers, and it took decades for the technology to work with anything approaching reliability. Consider how much more information is contained in a telephone call than in a text file or web page, and also the reliability required to make a telephone call.

However, VOIP phones are now becoming more and more common. They often provide a way for domestic telephone customers to save money and bundle their telephone service with their internet connection. For business customers, the story is a little different. VOIP service certainly has several advantages where large enterprises are concerned: telephone numbers that can easily be programmed and reprogrammed when offices and individuals move; networks that consolidate both locations and data/voice applications; and significantly lower infrastructure costs, especially where a private branch exchange is needed.

Similarly, many of the advantages of VOIP phones apply to both large and small enterprises: although VOIP phones have a larger feature set, they are much more user-friendly, allowing the end user to program their own phone with ease. additionally, VOIP phones can run straight from the user’s computer, over the same data network: significantly decreasing the cost and time needed for networking. Newer dual-mode phones allow users to switch between wireless internet and cellular networks with ease.

However, VOIP phones are not always suited for small business applications, and the use of a VOIP phone in small business simply may not lead to a significant saving. This is due to the fact that while VOIP services offer high reliability in situations where excellent, very robust internet connections already exist (such as in a large office building). If a small business customer has a domestic internet connection, or one that is below ADSL2+ speed, they may find that VOIP simply presents too many problems in terms of reliability. Additionally, while large business customers can negotiate VOIP agreements that include a high level of support, cheap additional hardware (such as desk handsets) and additional infrastructure, many small business customers may find that anything more involved than a simple “naked ADSL” — like a VOIP phone bundled with an ADSL subscription — may be cost prohibitive, inconvenient, and more trouble than it is worth.