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What Is VoIP and How Does It Work?

So, what Is VoIP, and how does it work?

If you run a B2B company, you’ll almost certainly agree that communications can make or break your business. How well your communications setup accommodates calls from leads will determine how your business prospers. Your team’s performance and synchronicity can also improve or dip based on how you set up your phone networks.

For the most part, determining the best setup always becomes a balancing act between budget-friendliness and effectiveness. Go too far in either direction, and your communication setup may need to improve or be more costly to maintain.

However, what if there was a way you could cost-effectively streamline your communications?

Enter VoIP.

VoIP enables you to communicate with multiple parties across various devices. This ability to accommodate numerous calls and messages allows your company to scale its operations.

Here’s the best part:

Because business VoIP systems are on networks free of wires and hardware, you don’t need much equipment to set it up. As a result, it’s less bulky, and most importantly, it’s cost-effective, unlike traditional phone services. But what is VoIP, and how does it work? We answer these questions and more below. Learn more about VoIP, how it works, and why it might be the missing ingredient to your small or medium-sized business.

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What Is a VoIP Phone Network?

VoIP is short for “voice over internet protocol.” As the phrase implies, it’s a form of communications technology that enables you to make calls using the internet.

A VoIP network differs from a traditional landline network in several ways. A conventional landline or phone network transmits voice signals using copper wires interlinked with other phone networks.

In comparison, VoIP phone solutions are not reliant on wires or interconnected hardware. All a system needs is a few IP phones, a data storage facility of some sort, and, of course, a stable internet connection.

With a VoIP system, you will no longer need multiple telephone lines. As a bonus, the system is accessible on various devices, meaning you can jump from one communication method to another. For example, you can use the same VoIP network to make calls and send messages.

While VoIP requires no bulky hardware, you should still expect to purchase a few pieces of equipment. At the very least, you will have to undergo internet connection installation if your business still needs it.

VoIP companies often provide installation and hardware in bundles. However, cloud-based service providers will set up your network and infrastructure with minimal equipment. For more on our cloud-based VoIP service, don’t hesitate to reach out.

In the meantime, we can sum up what VoIP is this way:

A VoIP system is a communications network that uses the internet for interconnectivity. With such a system in place, you can vary your devices and communication methods, corresponding with your team and clients wherever you are.

The Difference Between VoIP and a Traditional Phone System

When distinguishing VoIP and traditional phone systems, we need to talk about the input — voice. More specifically, the difference lies in how both systems convert voice input.

Let’s start with how traditional phone systems perform this task.

Traditional Landline or Phone Systems

With a traditional phone system, the voice is an input that sends a signal which is then converted in a telephone’s microchip. The converted signal travels through an interconnected network of copper wires mediated by communications satellites.

The signal then passes through a series of circuits that connect one telephone to another. Circuit-switching enables one input from one telephone line to make it to another.

In short, we can summarize what happens to a voice signal over a traditional phone system this way:

First, the voice enters a phone’s microchip that sends a signal. Copper wires and circuits transmit the signals to a specific telephone line — usually the recipient. As a result, the recipient hears the signal and sends a response back as another signal (i.e., another voice input).

VoIP Systems

Unlike traditional phone services, VoIP services rely on computer networks instead of telephone networks. Instead of copper wires and circuits, computer networks with unique IP addresses receive the voice input and convert them into data packets.

Computer networks then transmit these packets of data over the internet. The data packets are not intelligible on their own and require reassembly before reaching the recipient.

Eventually, the data packets that comprise the voice signal end up with a recipient. Upon reaching the signal’s recipient, these pieces of data undergo reassembly.

However, because data packets are also convertible into other output forms, VoIP systems can convert voice signals into other formats. The most popular media forms available with VoIP include video, audio-to-text, and pre-recorded voice messages.

With signals being convertible into multiple formats, communications can occur on various devices across multiple mobile phone applications.

Summary of Differences

To summarize, VoIP and traditional landline or phone systems differ mainly in how they convert and transmit voice signals. While traditional phone systems transmit voice using copper wires, VoIP performs the same task using IP networks.

With traditional phone networks relying heavily on circuit-switching technology, communication becomes possible and secure over various distances. However, the benefits conferred by circuit-switching technology are not without their drawbacks. More specifically, circuit-reliant communication has led to the following downsides:

  • High hardware maintenance costs
  • Limited connectivity when dealing with multiple callers
  • Bulky hardware and connection installations in offices
  • Correspondences are limited to one communication method.

In contrast, because VoIP transmits inputs in data packets over IP networks, you can bet that VoIP communications are:

  • Faster
  • Clearer
  • More cost-effective
  • Less reliant on bulky hardware or physical connections
  • Accessible across multiple devices.

With these differences, it is clear why your business would benefit from a VoIP service.

How Does VoIP Work?

Earlier, we discussed how VoIP makes communication possible over an IP network. However, VoIP establishes the link between computers, mobile phones, and other devices. We need to talk about codecs to understand better how communication is made possible over a VoIP system.

As mentioned, traditional phone systems convert analog voice input into signals using microchips and copper wires. Voice-over IP systems are not reliant on such hardware. Instead, the signals undergo conversion through codecs.

Codecs in a VoIP system receive voice input. After receiving the input, codecs will preserve it in data packets of varying lengths, usually ranging from 20 to 40 milliseconds.

The codecs then compress and convert the data packets into intelligible file formats using internet bandwidth as the conversion resource. More complex and lengthier voice inputs require more bandwidth. This is why it’s almost always easier to send text or email messages than to make video calls.

After the codec has completed the conversion process, the input comes out the other end as either voice or text. It all depends on what format the users of a VoIP desire or need.

In short, a VoIP network connects multiple computers and devices. What makes calls and messages intelligible to the network’s users are codecs in the VoIP system.

How Can VoIP Benefit My Business?

VoIP can consolidate internal and external communications within a unified internet-based system. As a bonus, VoIP systems allow companies to accommodate multiple callers and users at lower costs.

Depending on the type of VoIP service you sign up for, you can also benefit from additional support like multi-device compatibility and system integrations.

All in all, you can look forward to many advantages when you sign up for VoIP services. Let’s talk about the benefits in greater detail.

Easy Integration With Your Existing Communications Infrastructure

Most business owners are hesitant to add VoIP to their existing communications infrastructure. Contrary to popular belief, however, VoIP does not require a radical overhaul of a communications network. Instead, the systems can easily integrate with a business’s existing infrastructure, using telephone networks and existing connections as part of the system.

For the most part, the only part of a network that requires any change may be the internet connectivity. Because of the high bandwidth requirements of a VoIP system, the internet connection may need an upgrade.

Beyond that, everything in your communications network — from the phones to the routers — can stay where they are.

Lower Maintenance Costs

Traditional phone systems have hardware that may be susceptible to wear and tear. As a result, you may be looking down the barrel at maintenance fees that can add up over time.

A VoIP system requires less hardware. All you need to keep your system going are a few IP phones and a stable internet connection.

With minimal hardware, your maintenance costs can drop significantly, resulting in more savings you can allocate for other business processes.

Unified Communications

With VoIP, you don’t have to limit your communications to phones. VoIP networks consolidate all communications into one trunkline, using different apps accessible on various devices. As a result, everyone on your team can get in touch no matter where they are.

Excellent Support for Remote Work

Since the pandemic, more businesses have shifted to remote work arrangements to maintain their operations. If your team works from home, VoIP is for you.

VoIP helps you stay in touch with your team in real time. As a bonus, you get to communicate effectively with your team at a fraction of the cost.

This brings us to the next advantage of VoIP for your business.

Little to No International Fees

Cross-border communication is possible with traditional landline or phone systems. However, international rates can be costly — something you may want to consider if you have clients or team members overseas.

VoIP eliminates international fees. You can communicate effectively with your team and clients wherever they are, and all you need to pay for is the VoIP service and your monthly internet bill.

Helps You Deal With Multiple Callers

One of the best things about a VoIP service is how it helps your business deal with numerous callers simultaneously. VoIP systems allow callers to reach multiple endpoints or devices. In other words, when a caller tries to get in touch with you, anyone in your company can receive the call.

With VoIP in place, your callers will not hear a busy tone when other callers try to reach your business.

Long-term Scalability of Your Customer Service

As your business grows, you will be handling more calls. Your lead generation needs will also grow at a commensurate rate. For these reasons, you need a communications solution that helps you scale your ability to take more calls with the minimum investment.

With VoIP, you do not need to install additional telephone lines as you would if you had traditional phone networks. Instead, you get to accommodate as many callers as you want to at any given time — and you do not need to pay for any additional installations.

With a cloud-based VoIP service like the one we offer, you can scale far further before you upgrade.

Thinking of Switching to VoIP?

Whether you’re choosing a new telephone system or looking for additional integrations for your existing communications network, VoIP is for you. With VoIP, you can handle a large volume of calls from clients, leads, and team members. You also benefit from unlimited scalability with minimum hardware and maintenance fees.

VoIP is best when it’s delivered as a cloud-based off-premise service. If you need a provider with a proven quality of service, look no further. We at Intulse specialize in cloud-based VoIP solutions that take the guesswork out of VoIP installation and management. With us handling your VoIP system, you can focus more on what matters most.

Reach out now for VoIP solutions that help your business grow.