What is VoIP and how does it Work?

This article provides an introduction into what VoIP is, how it works, the benefits of using such a service and the equipment needed.

How VoIP Works

VoIP stands for "Voice Over Internet Protocol", which is a technology that allows you to make phone calls using your Internet connection instead of your old copper landline.

In terms of how VoIP works with respect to your existing telephone, well it works exactly as it has always done and you simply dial any number and talk. The difference is that the call is turned into digital packets and sent over the Internet rath than an analog signal over a copper landline.

The only requirement for this technology is a high speed Internet connection, such as DSL, fiber or cable, as the service is based on Internet communication. A VoIP call requires a speed of up to 90Kbps depending on the voice compression algorithm chosen by the service provider. This is a higher speed than dial-up Internet so a high speed Internet is a requirement.

What are the benefits of VoIP?

The following are the main benefits of using VoIP for your phone service:

  • One low monthly fee often covers all of your phone calls in the U.S and Canada. This is where we can help you - compare our most popular residential VoIP providers.
  • While there are some taxes, they are clearly explained and much lower than what your regular phone company will charge you.
  • Making international calls costs a lot less and it is easy to find some specialized plans that include a certain number of free monthly international calling minutes. VoIP companies take advantage of the Internet to connect these calls which enables them to offer such great low rates.

What features do I get?

The features available are impressive. Your voice, which is an analog signal, is converted into small packets of digital data and sent over the Internet to your VoIP provider. This digital data is perfect for the Internet and it means your service provider can do many things with it such as:

  • Store incoming calls to voice mail if you do not want to be disturbed by the telephone.
  • Send a voice mail to you as an e-mail attachment so you can listen to it on any computer and at any time.
  • 3-way calling. Many plans allow up to three people in one conference call, allowing you to talk with your entire family at once.
  • Offer caller ID, call blocking, call forwarding and call waiting. These features are often thrown in for free. You would normally need to pay for the privilege with a local landline provider.

There are many other cool features that VoIP offers and it should be remembered that this technology is still growing fast so the possibilities are almost endless. Check out our guide to many of the VoIP Features available from the providers you see on our website.

Are there any disadvantages?

There are a couple of items to consider before you choose VoIP. These are usually not an issue for most people but worth highlighting in case it is a problem for you.

Most providers have Emergency 911 (or E911) service which is a little different to the standard 911 service you may be use to. Verify with your provider of choice that they have this service. The reason for E911 is because VoIP is so portable and you could have a phone number for anywhere in the world. This of course poses problems when it comes to emergencies - the emergency services do not automatically know where you are located. This typically requires you to set up your home address in the emergency systems so that they know your location in case of emergency. An extra step perhaps but not really that big a deal and involves simply adding your current physical location to your portal on the providers website.

The biggest disadvantage that skeptics will throw at you is what happens when your power goes out at home or you lose your Internet connection. You see VoIP relies on having a reliable Internet connection so if that goes down so does your phone service. However, in the days when most of us have a cell phone of some sort, even if it is just "pay as you go", is this really a big issue? Also, some people will buy an Uninterruptible Power Supply (UPS) so if the power goes out you can still power your Internet modem and VoIP adapter.

What equipment do I need?

To make a VoIP call the only additional piece of equipment that a typical setup will need is an Analog Telephone Adapter (or ATA), which is usually supplied by the service provider when you sign up for service.

This allows you to make phone calls as normal, using your own standard phone. The ATA does the clever conversion of your analog voice to a digital signal that the Internet can understand. It then sends that signal on to your Internet modem, which passes it over the Internet.

A typical residential phone solution looks like this:

Why is the computer in the picture - you still want your high speed Internet, right? You can surf the web while your daughter talks to her friends on the phone.

If you have more than one phone in your home the recommended connection is to use cordless telephones. The ATA is an interface between the VoIP phone line and the cordless phones base station and should be connected using an RJ-11 cable. The additional handsets can then be located wherever you choose to have them in your home. For other options check out "How do I add multiple phones to my VoIP service?" in our FAQ.

For homes with more than one computer simply connect a router to the ATA instead of the PC in the diagram above. Your computers then connect to the router. Note that many other connectivity options exist for this type of setup. If your home network is a little more complex, take a look at our VoIP setup article.

Now that WhichVoIP.com has given you an insight into this technology you hopefully can now see why VoIP is the most economical and smart method of making phone calls. Check out some of the providers on this page in our comparison table to get an idea of pricing and read user reviews.

For the techies: Check out our Advanced VoIP Guide for an in-depth explanation of how a VoIP call works.


Author: Andrew

Published: by WhichVoIP

Related Articles for Further Reading:

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WhichVoIP Visitor Comments

#12 : Posted by Mark Schroeder on March 26th, 2016:

Can I use Voip if I don't have a land line and I just want to use it with my computer and cell phone?

-> Response: Yes you can, so long as you have a good Internet connection (or data connection through cellular or WiFi if using an App on your smart phone).


#11 : Posted by Gary Johnson on January 1st, 2015:

I have cell phone service that has a marginal signal level at our house. I would like to use our Android cell phones to connect to the Internet via our LAN and make VoIP calls. This would require an app on the cell phones and it would use the phone's functions. Also my Contacts on the phone would be available to make calls.

-> Response: Here is our Mobile VoIP section: http://www.whichvoip.com/mobile-voip.htm The mobile VoIP providers allow you to download an app and do what you require. Simply add credit to your account and start making calls on your cell phone.
However, another option depending on your cell provider and the phone you are using is to turn on WiFi calling. I recently did this with my cell provider (T-mobile) and turned it on for the iphone5S. There should be something similar for Android devices. Basically when I am at home my cell coverage is bad but now it all goes through my WiFi and works great.


#10 : Posted by Bob on July 31st, 2014:

Can my cable internet service provider (ISP) block me from using their connection for voip service? If so how can I find out which providers will allow it or which voip providers have defeated internet providers from blocking independent voip connection?

-> Response: Good question - which ISP provider do you currently use for Internet? I have not come across this for a long time, the last one was Clearwire (wireless) but the more mainstream ISPs do not perform this tactic.
It is also worth noting that sometimes when this occurs, it is not a block by the ISP directly but more an issue with the modem/router setup where the ports are not open for the SIP protocol that carries the VoIP calls. May be worth asking your Internet provider about this.


#9 : Posted by Sonya on January 3rd, 2014:

I am moving in about 3 week about 40 miles from here but I do not have the finance to still pay the 80 dollars for my tv and phone. Any other options? Excuse my English writing I am French.

-> Response: Sonya your English is great! For VoIP you need a decent Internet service so although VoIP is low cost the Internet can be expensive. If you can get low cost Internet then VoIP would be worth it and there are providers that offer some free International minutes so you can call France. Basic TV is normally low cost but alternatively just get an antenna for your TV and use Hulu. Add Netflix if you want more shows. Another option: Get a smartphone if you do not have one already. Low cost no contract options here and LTE 4G internet so it is fast. Add mobile voip apps e.g. Rebtel and make very low cost calls home to France. These options could probably get you down to about $40/month.


#8 : Posted by Lrm on October 11th, 2013:

Would it be possible to continue to use a fax machine with VOIP since the fax uses the phone line?

-> Response: We actually recently created an article on this very subject. It is possible and there are a few options. Take a look at our article on Fax over IP (FoIP).


#7 : Posted by Lenny on June 17th, 2013:

I use a fax machine will this be affected by changing to voip? it is a once a week thing but I definitely need the fax.

-> Response: Lenny, fax can be problematic with VoIP due to the timing specs for this old protocol. Some fax machines work others not so well. However many of the providers actually provide eFax (internet fax) service as part of the service or for a small add-on in which case you could remove the need for your fax machine altogether and do it all from your computer.


#6 : Posted by Anita Ramsawak on June 17th, 2013:

I am currently use TekSavvy High Speed Internet, I have 2 questions. If I get a home phone service, do I have to have a computer up and running while I'm on the phone and secondly do I use up my internet with the use of the home phone?

-> Response: Anita, you do not need a computer to run VoIP. The VoIP provider will usually send you an adaptor. Your regular phone plugs into this adaptor and your adaptor connects to your internet modem. Your calls then go across the internet. Your phone service will use up some of your internet allowance but it is very small compared to your regular internet use.


#5 : Posted by Heidi on June 11th, 2013:

i have hughesnet satelite will that work?

-> Response: Heidi, satellite broadband can be hit or miss due to the latencies involved (i.e. enough bandwidth but delays make the quality poor). Most providers have a 30 day return policy so you could try it (just with a new number, do not transfer your home number over yet, you can do that later). Also worth trying our Speed/jitter test first..

-> UPDATE: We created an article on VoIP over satellite which may be of interest to you.


#4 : Posted by Judy Bullard on June 8th, 2013:

Can I get a new number as I have not had home phone service for a while.

-> Response: Sure Judy, you can get a new number.


#3 : Posted by Pete Dodd on June 5th, 2013:

This is all new to me. I'm a senior with very basic pension. Been with Bell for over 40 years. Bell handles my telephone land line (about $40 per month), plus my Internet and personal website with 2 emails to that site (about $39 per month), and won't give me any better deal...(over $85 / month with taxes!...so much for loyalty!!! How do I split everything up and not lose my website / emails, but still save money with VOIP? Is there another way or a different handler (sorry, I'm mixed up with Servers, Providers and Hosters, to handle my website and emails?). Could you advise me (and all other seniors not schooled in digital), the simplest way to slot Tel, Internet, Website and Emails to get the best and efficient service? Thank you so much for your efforts. Pete.

-> Response: Hi Pete. Providing you are not under some form of contract with Bell, you should have no problems just removing the telephone line and keeping Internet and website/emails. You could pick up a VoIP service for as low as $6 per month (see our comparison tables) so that would save you $34 per month. Only issue may be that Bell usually is DSL service (i.e. your Internet runs over your telephone wires coming into your house) so they may pull a fast one and still charge you line rental so ask them about that before you cut them off. The terminology here is naked DSL, I think in Canada it is called dry DSL. Basically this allows you to use their DSL without their phone service, may cost a few dollars per month but still significant savings for you I'm sure. Before you switch their phone service off, it may be worth getting the VoIP running over your Internet to make sure you are happy (just get a new phone number when you sign up for VoIP, to begin with). Once happy, transfer your existing number with Bell over to VoIP. Do not shut off your Bell phone line before transferring your number over to VoIP, the timing is important here. The Internet bill including email and websites seems reasonable to me so you could shop around and save a few dollars but not much I would say. Hope this helps.



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