What is VoIP? How Does It Work?

Have you ever made or received a WhatsApp call? What about Skype, or Zoom, or Microsoft Teams? If yes, then you have certainly utilized the Voice over Internet Protocol. While most people prefer to just use VoIP services without giving it any additional thought, if you wish to know what goes on behind the scenes when you establish a VoIP connection, then you are in the right place. Today, we will answer the question of what is VoIP and how does it work?

Updated: 14 Dec, 21 by Antoniy Yushkevych 12 Min

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VoIP is the acronym for Voice over Internet Protocol that is the latest technology that allows you to place an audio call over the internet. Unlike the traditional landline calls or simple analogue phone calls from one sim card to another, VoIP costs less and also comes with many extensive features. And moreover, VoIP supports direct audio calls from your computer by connecting one IP to another. If you don’t know much about the VOIP service, we suggest you read this post from beginning to end and discover what VoIP is and how it works.


VoIP connects one IP address to another to place an audio call and you can manage unlimited calls in one go with VoIP. Like cloud phone call services, you can record phone calls, use a custom caller ID, send a voicemail, and do a lot more with VoIP. However, to make a call use the Voice over Internet Protocol service, you will have to access your broadband connection. The VoIP service is enabled by default on many computers and as you know, the service is not that latest. VoIP has been on the internet since the 90s but over the decades it has improved for the users.

While landlines and cellular phone calls are depending on the Public Switched Telephone Network (PSTN), VoIP is taken care of by Voice over Internet Protocol service providers. Traditional landlines are quite expensive and come with lots of configurations. But Voice over Internet Protocol providers will take care of your Voice over Internet requirements all by themselves. All you need to do is connect your device to the internet and you are available to receive and make calls. Usually, Voice over Internet Protocol requires a high-speed internet connection to establish a connection. 

If you have a strong Wi-Fi signal or an Ethernet connection, you can make phone calls via VoIP. We will talk about the benefits of VoIP later but for now, let’s focus on how it works.


Through VoIP, your voice will be converted into digital signals and your IP address will carry that signal to another IP address. This allows the service to help you make a phone call from your computer, smartphone, or any device with a data connection. VoIP has several different names such as IP telephony, broadband telephony, internet telephony, and broadband phone service. 

When your device is available for VoIP, it allows your IP to exchange data with another IP using small data packets. Here data refers to the conversation that you have over the phone with another person and the data is transferred through the internet. These small data packets are generated in your device and go through your VoIP provider. Other than allowing you to make audio calls, VoIP supports call recording, voicemail, and call forwarding as well. Here is how the VoIP works step-by-step.

  1. You connect your device to your Local Area Network (LAN) through a router or ethernet cable
  2. You dial a phone number and your IP address communicates with your VoIP service provider to ask them to make the call to the other person.
  3. The VoIP service provider will then create the phone call and send those small data packets from your IP address to the other party
  4. The VoIP service provider converts the small data packets into digital signals that come out as voices.

Ever since the Voice over Internet Protocol became popular, people started using fewer telephone communications and more VoIP. If you have a broadband connection at your home or office, you can use VOIP instead of a telephone company. These days, VoIP is made of Session Initiation Protocol (SIP) standards that support multiple features of a phone call. For example, you can make multiple calls at a time and also make them conference and use the call routing, call record, etc. services. Therefore, VoIP is greater than the analog phone system because it charges less money but the quality of the audio calls is superior. 


Maybe at first glance, you will think that VoIP is not that cheap but when you learn about all its features, you will notice why people prefer it over telephone communications. VoIP costs around $35 per month for one person but it is still affordable than traditional phone systems or Cloud-based PBXs. Let’s have a look at the potential cost of VoIP:

  • It may cost between $0-$50 per line as an initial cost
  • May charge between $19-$45 per line per month
  • An IP phone may cost between $80-$600 
  • Get ready to pay $0.01+ per minute for making calls outside of your country
  • And the taxes and call fees vary from country to country.

And then there is the traditional call system that costs more than VoIP. Let’s see the difference:

  • Installation fees for telephone or landline will take between $50-100
  • You will have to deposit $100-$500 for making monthly phone calls
  • $1000+ maintenance cost per annum
  • International calls cost $1.00+ per minute

So, as you can clearly see, VoIP has advantages over traditional landline systems. But it also comes with some downsides.


Before changing your phone service from landline to VoIP, you need to consider its advantages and disadvantages. 

Advantages of VoIP

  • Saves up to 60% of phone bills
  • The sound or audio quality of VOIP is better than telephone 
  • Additional call features are available such as call recording, call queues, conference calls, etc.
  • You can use VoIP from wherever you want because there are no troublesome configurations
  • You can contact anyone from wherever you want.

Disadvantages of VoIP

  • You should have a high-speed internet connection of at least 100 kbps (0.1 Mbps) to make a phone call
  • Emergency phone calls are difficult. You will have to tell your exact location to the VoIP provider so that you can connect with 911
  • Might not support outdated analog devices.

However, VoIP is still easier to use than a landline system and is the best for your business calls because you can make them over the internet without any restrictions. Also, you won’t have to depend on Skype or WhatsApp to make international calls. Those apps only allow the users to call another user who is using the same app. With VoIP, it does not matter whether your friend uses Skype or not, your call will still be connected to him. 

And if you think about the set-up and configuration of VoIP, you don’t have to think that technical either. VoIP only requires a network cable and power cord. Plug a power cord into your wall and a network cable to your device to call anyone in the world via the internet. You can alternatively download a free VoIP app on your phone and make voice calls from that application after registration. Apart from Skype and WhatsApp, there are a few other good choices for making VoIP phone calls.


VoIP apps are easy to use and most of them are cross-platform. Here are a few apps for your different platforms that support VoIP calls.

VoIP apps for Android and iOS

Since people are using smartphones all the time, you probably want to make a call from your Android or smartphone without a sim card. And luckily, there are some apps that don’t cost much and some apps that are completely free like WhatsApp. But if you want to enjoy more features, check out the list below.

Use the Android SIP support

There is in-built SIP support in Android that you won’t find in iOS. It means, you don’t have to install any third-party apps but have to configure the settings for using the SIP support. In SIP, you don’t need any sim card but you can make calls through a speedy Wi-Fi connection. You can receive and send phone call requests over the internet.

Nextiva App

Nextiva App is a fantastic VoIP app for Android and iOS that you can directly download from Google Play Store and App Store. It acts like WhatsApp where you can make group chats, conference calls, video calls, manage voicemails, call forwarding, and so on. Nextiva app even supports the HD video chat option and screen sharing with other users.


Zoiper works with your phone’s SIP function and IAX providers as well to provide you with VoIP services on your device. You can customize the application on your mobile and enjoy its service but you will have to have a SIP account either from a third-party provider or from your phone’s in-built function to use Zoiper. You should provide your SIP username, password, and server info to start using Zoiper.

VoIP Phone 

You can have a cloud-based office system phone to carry out business communications without a landline system. However, the features of a VoIP phone will be dependent on your business and phone-related requirements. 


Let’s find out the top VoIP phone system features that help you make phone calls from your business.

Auto Attendant

You can direct calls from your customers to other attendants of the company and if the customers are calling outside the office hours, their calls will be converted into voicemails. The conversion of the calls from customers will be automatic or you can do that manually by pressing a certain button.

Mobile and Desktop Applications

These VoIP apps are not like landline phone calls that you will miss when you leave the office. Many VoIP service providers offer a mobile and desktop app for their voice over internet service where you can receive calls and even make calls to other devices. You can even send text messages from here.

Uninterrupted Communications

VoIP uses the Unified Communications (UC) technique to connect your call with the other parties. Therefore, it makes it easier for your customers to communicate with the staff. Your employees can also talk to each other over the phone without losing the quality of the voice call. Other features of the Unified Communications (UC) technique include video meetings, mobile and desktop applications, screen sharing, and more. 

If you want to use all these features of the VoIP Phone, you need to ask yourself whether or not you really need the phone. 


If you use a traditional phone, then it might not be suitable for VoIP connection but if your buy a VoIP phone, it will help you continue your conversation with your partners and friends smoothly. These types of phones are not overly expensive but you need to figure out whether you require one. But whether or not you require the VoIP service to use on your phone, you need to figure that out on your own.

If you work from home—which many of us do by now—you might need a good VoIP phone. Tweaking a lot of Local Area Network settings might not be the suitable thing to try to keep on the communication with your colleagues and team members, you can contact a VoIP provider. The best thing about having a VoIP phone in a work-from-home situation is you can interact with your team smoothly without any communication interruption because the VoIP service supports flawless conference calls.


Using a commercial phone system will make your business look more credible to your customers. But you need to figure out what you need from the VoIP service to be able to choose the best provider. For example, if you are using the VoIP service only for customer-staff communication, then you need to find a provider who will provide the same service affordably and professionally. Also, consider what goals you have with your VoIP phone calls so that you can choose the best monthly or yearly plan.


Consider choosing a VoIP service provider that offers you an affordable service and plans that will also help you grow your business. For finding the best VoIP provider, consider looking into their portfolio, documentation, customer reviews, ratings, etc. Also, make sure that they are available 24/7 to provide you with live customer support and their VoIP is compatible with your network. 

Since you now know the advantages and everything about VoIP, it’s your call to make whether or not you require the service. But choosing the VoIP for your company will surely smoothen your conversation with employees and customers alike.

Antoniy Yushkevych

Antoniy Yushkevych

Master of word when it comes to technology, internet and privacy. I'm also your usual guy that always aims for the best result and takes a skateboard to work. If you need me, you will find me at the office's Counter-Strike championships on Fridays or at a.yushkevych@monovm.com
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Hunter Abbott

2024, Jun, 24

Great breakdown of VoIP technology! It's impressive how much VoIP has evolved since the 90s, offering features like call recording and conferencing that traditional landlines can't match. The cost savings alone make it worth considering for both personal and business use. The additional benefits like HD voice quality and flexibility make switching to VoIP a no-brainer if you have a strong internet connection. Thanks for the detailed explanation!