What is VoIP?

For this post, the seventh installment in our Telecom Tip Tuesdays series, we are going to get a little technical.  We are going to spend the next few posts talking about subjects that are a little confusing, but have a lot of impact on how we will communicate with each other throughout the next quarter of a century.

What is VoIP?

How does VoIP work?

How will VoIP change the way my business buys telecom?

These are technical topics, but the idea behind them is simple – VoIP allows you to send voice traffic over your data network.  This is a topic that we’ve discussed many times – in fact we have a video that describes the concept.  Sorry about the dry presentation!

If you don’t feel like watching the video, we’ll cover the basic facts from the video here.

Basic Concepts

Voice over IP (or VoIP) is a technology available in many modern telecommunications systems that enables you to use your data network to carry voice traffic. The term “IP” stands for “Internet Protocol”, which is the language that computers use to communicate over the Internet. VoIP is a technology for breaking up voice into digital packets and sending them over a data network. Usually that data network is the Internet, but it could be any data network running IP, like an organization’s private network (or MPLS).

Phone companies have been using data networks to carry voice for a long time – that’s how they send traffic over their internal networks.  What makes VoIP different is that it relies on the Internet Protocol for these tasks rather than the proprietary phone company protocols. Since it is based on a widely available technology, VoIP can be made available to the general public more cheaply. Also, the nationwide build-out of broadband networks has made Internet access available almost everywhere, enabling organizations to connect all of their locations through the Internet rather than building expensive private data networks. All of these factors have converged during the last decade to make VoIP an inexpensive option for most organizations.

How VoIP Works

To connect two phones and carry on a conversation, VoIP requires a device at each end of the conversation called a VoIP Modem. This device can be standalone, part of the Phone, or part of a phone system, but it is always part of the conversation. The VoIP Modem is the device that converts the analog voice signal to digital and back again.

Helpful VoIP Diagram


During the conversation, the Modem takes the voice signal from the phone that is sending and converts it to digital packets. It transmits these digital packets over the internet addressed to the second Modem. The second modem converts those packets back into an analog voice signal and sends it to the receiving phone.

SIP Trunking

SIP trunking is the application of Voice over IP (VoIP) technology to provide connectivity to your phone system. In this case, your organization must have a phone system that can accommodate SIP trunks in place of, or in addition to, regular phone lines.  You can buy SIP trunks individually, in bundles, or even in “as much as you need whenever you need it” quantities. Since these trunks are based on the VoIP technology, they offer the same benefits and suffer from the same issues as other products giving you voice connectivity over the Internet.

Amazingly Helpful SIP Diagram


A SIP Trunk is provided to your phone system by a VoIP provider over the Internet.  The SIP provider’s job is to take your VoIP calls and connect the Public Switched Telephone Network (i.e. the Phone Company).  For instance, when you make a call to someone who does not have a VoIP modem, the SIP provider converts that call to analog and send it over the Phone Company network to the party you were calling.

So why use VoIP?

In terms of the benefits, SIP trunks are often less expensive than traditional phone lines because they can ride on the installed data network and you can stuff many of them on a single circuit.  In addition to cost advantages, SIP trunks can also offer many of the more advanced telecom services, such as the ability to have multiple phone numbers over a single trunk line and the ability to have a single connection handle multiple simultaneous calls.

In addition, SIP trunks can offer features that were never available over traditional services. For instance, you can have phone numbers from California ring on lines in New York (or anywhere for that matter). You can have long distance calls operate like local calls, and at a very inexpensive rate. SIP trunks usually come with advanced features like CallerID, Call Waiting, Call Return, Voice Mail to Email, Efax, etc. and they can be managed via a simple web interface.

However, SIP trunks can be less reliable than traditional services. The older analog phone services were built with tremendous redundancy so that phone service would always be available even under extremely adverse conditions (which really meant that they were over-designed for the typical user). More modern data networks were built to operate at a much lower cost, but with a slightly higher risk of failure and SIP trunks carry that same risk. For some organizations, that small risk is acceptable but others may choose differently.


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