Everything You Need to Know About VoIP (& How It Can Help You Save)

April 24, 2023
6 min read
Everything You Need to Know About VoIP (& How It Can Help You Save)

Voice over Internet Protocol (VoIP) was launched on the internet in 1995, and it has since changed the way we communicate. VoIP made businesses more mobile and flexible while saving money, allowing people to connect internationally without high long-distance fees.

According to a report by Persistence Market Research, the global VoIP services market is expected to experience major growth between 2017 and 2024. By the end of 2024, the global market for VoIP services is estimated to generate US$ 194.5 billion in revenue.

Wondering how VoIP phone systems work? We'll detail everything you need to know about making calls over the internet in this article.

VoIP: What Is It?

With many households now using cell phones, it might be time to reevaluate your landline service. VoIP is an affordable solution that lets people make and receive calls over the internet with a traditional phone or a computer.

VoIP is a phone system that uses an internet connection to make and receive calls, rather than the outdated method of landlines. VoIP is also called Internet Telephony, VoIP phones, IP phones, cloud-based telephony, and hosted telephony.

Voice over IP is getting popular because it doesn't require a telephone landline, which cuts down on long-distance charges. If you have internet, VoIP lets you make calls without extra costs. This makes it perfect for employees who work from home or telecommute from time to time.

VoIP: How Does It Work?

Voice over Internet Protocol (VoIP) phone service allows a Private Branch Exchange (IP PBX) to make calls using a company’s existing internet connection instead of a separate phone line. In other words, VoIP uses the internet to create phone connections instead of telephone wires.VoIP uses the internet to send data, so your information is stored in a secure cloud.

VoIP technology takes your voice and transforms it into a digital signal. This data is compressed and sent over the internet using a VoIP service provider. Once it reaches its destination, data is uncompressed into a sound that passes through phone speakers or headphones.

VoIP usually consists of a regular desk phone and a SIP server, which you can get from most VoIP service providers. You need either a SIP-compatible desk phone or a VoIP calling app to reach someone using VoIP. Your device will be assigned an IP address, which allows calls to be made from your network.

VoIP: What Are the Types?

Several VoIP services are available on the market, so it can be challenging to know which is best for your business. Keep reading to learn more about the different types of VoIP and how they can benefit your business.

1. Hosted VoIP systems

For businesses that don't want to spend the money on an in-house VoIP system or can't afford to hire specialists for support, hosted VoIP services provide a more economical solution by turning capital expenses into operating costs.

Many hosting companies work with finance houses that offer leasing solutions for VoIP systems, so customers have the peace of mind of knowing how much their periodic payments will be.

There is a risk when the hosting organization is external to the company and the VoIP system is at their premises. If there's a loss of communications line, then all voice calls will be lost too. An interface can be established within the company so internal calls can continue even if the link goes down.

2. Hybrid systems

Some companies are perfectly content with their current landline telephone system and have no desire to switch to VoIP. However, they're also interested in taking advantage of cheaper rates and additional features VoIP provides.

As a result, these businesses often use both systems concurrently. Over time though, most hybrid system users eventually migrate entirely over to VoIP. Companies with more employees will most likely have an in-house system.

3. In-House/On-Premise VoIP Systems

In-house or on-premise solutions are the best choice if you desire full power over your IP PBX and want to choose any ISP. With this type of system, the PBX is on-site, similar to how a traditional phone system would be set up.

The up-front costs of an in-house PBX are more expensive, but you save more money in the long run with lower monthly fees. Companies can also avail of SIP trunks from any provider with this system, which isn't always an option for hosted solutions. Internal calls go through your local network instead of using internet bandwidth.

VoIP: What Are the Top Features?

A cloud-based office phone system offers many features, but which are the most popular among businesses? Here is a list of the top VoIP features that companies find beneficial.

1. Automated Attendant

VoIP's auto attendant feature is an answering machine that transfers calls to the exact extension. You can also use it to send messages to voicemail or outside of business hours.

2. Call Encryption and VoIP Security

The safety of your telephone calls is essential for business owners. Calls often include confidential customer information, like credit card numbers and HR conversations. Without proper protection, this could cost you.

Your VoIP calls are safe and protected as data travels through the internet. IP phone systems have security features to prevent people from tapping into your conversations.

3. Phone and Desktop Apps

By choosing the right VoIP phone system, you gain access to an app that allows you to take and place calls from your desktop computer or any mobile device.

With so many people working remotely now, it's more important than ever to have a VoIP solution in place for your team. These apps allow you and your employees to make phone calls, join conference calls, and send text messages.

4. High-Quality Calls

There's rarely anything more frustrating than having to repeat yourself on a phone call. A feature called HD Voice significantly improves sound quality, making VoIP calls twice as comprehensible as traditional phone calls. VoIP phones and headsets often come with noise-canceling capabilities for even fuller sound.

5. Unified Communications

VoIP creates a seamless workflow for your team through Unified Communications (UC). With UC, you won't bother using separate apps for different tasks. It's even more convenient for colleagues and customers to connect.

VoIP: What Are the Pros and Cons?

Before investing in Voice over Internet Protocol, you should weigh the pros and cons. Here are the benefits and downsides to know about:


  • Advanced functions
  • Expanded Accessibility
  • High-quality calls
  • Reduced costs


  • Requires a reliable internet connection
  • Vulnerable to cyber attacks
  • Limited location tracking
  • No integrated emergency services

Although there are several benefits to using VoIP, you should also be aware of a few downsides before deciding if it is the right fit for your needs.

VoIP: What Are Your Best Options?

VoIP services are becoming increasingly popular as technology advances, and companies strive to cut costs, improve remote collaboration, and increase efficiency. VoIP is a cloud-based utility that integrates with other software, making it an ideal solution for businesses of all sizes.

With hundreds of VoIP providers on the market, each with different features and pricing, it can be daunting to know which is right for your business. To make things easier, we've compiled a list of the top options available. These include:

  • Dialpad
  • Grasshopper
  • magicJack
  • Nextiva
  • RingCentral
  • Vonage
  • 8x8

When choosing a VoIP service provider, there's no one-size-fits-all solution. The best provider for your business will depend on many factors, including cost, features, and ease of use. Taking the time to evaluate and compare different providers makes it easy to find the perfect fit for your business.

Explore and Learn More About VoIP

VoIP has many advantages over traditional phone service, including lower costs, increased flexibility, and a wide array of features. If you're thinking about switching to VoIP for your business or home office, do your research and choose a reputable provider who can give you the best possible experience.

Explore and learn more about VoIP today!

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