What is a VoIP Network and How Does It Work?

May 18, 2022December 6, 2023

VoIP is a reinvention of the wheel, so to speak. It offers the same functionality of a traditional phone line but at half the cost.

What is VoIP, and how does it work? And why should your business use a VoIP network? This article will explore these and other questions so you can evaluate whether VoIP benefits your enterprise.

What is VoIP?

VoIP is the acronym for Voice over Internet Protocol. It’s a system that routes phone calls over the internet instead of a landline or cellular connection. VoIP converts a user’s voice into digital signals that travel over the internet. If you are familiar with how Skype works, you have a pretty good idea of the workings of VoIP.

VoIP’s most significant advantage over a traditional phone system is the cost. With VoIP, you only need to pay for internet connection, which you most likely already are, and a monthly service fee. There are no additional costs for long-distance or international calls. And because VoIP uses your existing internet connection, there’s no need to install new telephone lines.

Another advantage of VoIP is its scalability. You can easily add new users as your business grows. And because VoIP uses software, you can add features and functionality as needed.

VoIP is pretty cheap, yet its costs continue to decline by up to 5% every year. Companies that switch to VoIP report a reduction in monthly telecom costs by more than 50%. While it might cost a company more than $20,000 to set up a typical on-premise phone system, VoIP system setup costs are near zero.

How Does VoIP Work?

Now that we’ve answered the question “what is VoIP,” it’s time to look at how it works. As we mentioned, VoIP converts your voice into a digital signal that travels over the internet. But how does it do this?

VoIP uses a technology called packet switching. With packet switching, your voice is converted into packets of data. These data packets are then sent over the internet to their destination.

At the destination, the data packets are reassembled into your voice. The person on the other end hears you just as if you were on a regular phone call.

Packet switching is more efficient than the older circuit-switching technology used for landline phone calls. With circuit switching, a dedicated connection (or circuit) is established between the caller and the recipient. This connection is used for the entire duration of the call.

With packet switching, the data packets can take different routes to their destination. If one route is congested, the data packets can be routed over a different route. This makes VoIP calls more reliable than circuit-switched calls.

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VoIP Flavors: ATA, IP Phones, and Computer-to-computer

There are three main types of VoIP: ATA, IP phones, and computer-to-computer.

ATA stands for Analog Telephone Adapter. An ATA is a box that converts analog signals to digital so that you can use your regular phone with a VoIP service.
An IP phone is a phone that is specifically designed to work with a VoIP system. IP phones have all the features of a regular phone, plus additional features specific to VoIP.
Computer-to-computer VoIP is when you use your computer to make and receive VoIP calls. This can be done with a regular phone, but you’ll need to use special software. Skype is an example of computer-to-computer VoIP.

Why Should Your Business Start Using a VoIP Network?

There are many reasons why your business should start using a VoIP network. Here are just a few:

Cost savings: As we mentioned, VoIP is much cheaper than a traditional phone system. You can save 50% or more on your monthly telecom costs.
Scalability: VoIP is very scalable. You can easily add new users as your business grows.
Flexibility: With VoIP, you can work from anywhere. All you need is an internet connection.
Enhanced features: VoIP comes with a variety of enhanced features, such as call forwarding, caller ID, voicemail, and more.
Increased productivity: VoIP can help increase your business’s productivity. With features like voicemail and call forwarding, you can make sure that every call is handled promptly.

How to Make a Call Using VoIP?

Making a VoIP call is just like making a regular phone call. The only difference is that you’re using your internet connection instead of a phone line.

To make a VoIP call, you’ll need two things:

A high-speed internet connection
A VoIP adapter or IP phone

Once you have these two things, you’re ready to make a call. Just pick up the phone and dial the number as you would with a regular phone call. The person on the other end will hear your voice just as if you were on a regular phone call.

Private Brand Exchange (PBX System)

A communications center is a sort of central facility that allows for the management of phones within a company’s network. A private brand exchange (PBX) system is a communications center that organizes the phones in a firm’s network. It is a private telephone network that connects to the telephone network via the local area network, making it possible to make and receive calls.

PBX systems have evolved significantly; they now allow making calls using VoIP technology in a system called IP PBX. An IP PBX system is a call center that operates over IP networks and enables users to make phone calls using their internet connection.

Finding a VoIP Provider

There are many VoIP providers to choose from, so it’s important to research and find the one that best meets your needs. Here are a few things to keep in mind when you’re looking for a VoIP provider:

Cost: VoIP is much cheaper than a traditional phone system, but the cost will vary depending on the provider. Make sure to compare prices before you make your decision.
Features: Not all VoIP providers offer the same features. Make sure to find a provider that offers the features you need.
Reliability: Since VoIP uses your internet connection, it’s important to find a reliable provider. Make sure to read reviews and compare reliability before you make your decision.
Customer support: If you have any problems with your VoIP service, you’ll want to be able to reach customer support. Make sure to find a provider that offers good customer support.

VoIP-enabled CPaaS Solutions

Communications Platform as a Service (CPaaS) is a cloud-based platform that enables you to add real-time communications features to your apps and websites. Many CPaaS providers today include VoIP solutions.

CPaaS allows developers to integrate real-time communications features into their apps without building them from scratch. This saves time and money and allows developers to focus on other aspects of their app.

Through CPaaS, developers can implement VoIP features into their apps with just a few lines of code. What’s more, CPaaS ensures that a business’ real-time communications channels are securely encrypted.

At Signalmash, we provide CPaaS solutions that enable you to engage your customers through your app. With just a few lines of code, you can add voice, messaging, and SIP trunks via API to any existing application. Whether you need 2FA, SMS, programmatic voice, delivery notifications, PSTN connectivity, or software integrations, we have a solution that will fit your needs.

Reach out to us today and learn how our CPaaS solutions can help you take advantage of the benefits of a VoIP network, SMS API, programmatic voice and elastic SIP trunking.

Ask us how you can cut your Twilio or CPaaS bill up to 50%!!

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