What Is VoIP and How Does It Work?

What Is VoIP and How Does It Work?
Graphics: Nathaniel Blum

What Is VoIP and How Does It Work?

Kim Porter
Updated February 6, 2020

“VoIP,” or voice over internet protocol, allows you to place voice calls using an internet connection instead of a phone line.

While you may not know it by name, VoIP is the technology behind services like Skype, Google Voice and even the broadband-enabled phone system at your workplace. Consumers who want privacy can even get a VoIP number to hand out in place of their real cell number.

The technology makes calls free or cheap, and offers more features than with a traditional phone. However, VoIP has its downsides. Here’s what you need to know before trying VoIP.

What is VoIP?

VoIP is a communication tool that uses data networks and the internet to send and receive analog telephone calls. Callers pay less to make these calls but get more features compared to a traditional analog phone system.

It’s a departure from “old-style telephone services, where you would have a dedicated communication link between two parties and an analog signal between those parties to communicate voice,” said Jay Cahit Akin, CEO and founder of Mushroom Networks, a company that builds advanced routers and SD-WAN appliances.

While VoIP technology has been around since the 1970s, the first internet phone software wasn’t introduced until the mid-1990s. Today, businesses and consumers are flocking to VoIP services. In 2018, there were 41.6 million residential lines and 76.6 million business lines using VoIP in the U.S. That’s just a fraction compared to the 1.5 billion people worldwide who communicated with VoIP-powered WhatsApp on their smartphones in 2017.

How does VoIP work? What are the pros and cons?

Using VoIP is like using a telephone: Pick up the phone or open an app, dial a number and connect with the intended person. Behind the scenes, VoIP “converts your voice into a digital signal, compresses it, translates it into digital packets and distributes it over the internet to other voice-enabled devices,” said Eric Turner, phone number specialist at GBPN.com.

Pros of using VoIP:

  • Choose who sees your real phone number. Some consumers don’t want their number out there, Turner said. “So they buy a VoIP phone number and point it at their cellphone. This masks your phone number behind another number you can better control.” Small-business owners also use VoIP numbers “so their normal customers aren’t calling at 10:30 at night,” Turner added.
  • Make cheaper calls. Residential and business services have different pricing tiers, but VoIP generally makes calls cheaper. Some providers, such as Google Voice, allow you to make free calls as long as you have an internet connection. Other providers may: charge a flat fee that starts around $20 per line per month, charge for both the line access and each phone call, or bundle VoIP with TV and internet service.
  • Get extra features. These also vary by provider, but typically you can pay to include voicemail, call routing, voicemail transcription, group calling, video conferencing and more.

Cons of using VoIP:

  • The technology may not work during inclement weather. Some VoIP services don’t work during power outages or when your internet is down.
  • You may have problems with emergency services. Depending on your VoIP service, you may not be able to dial 911 directly, or emergency operators might not be able to pinpoint your location.
  • Limits may apply. Depending on your service provider, you may be allowed to call anyone—or you might be limited to only calling other subscribers of the service.
  • Phone spam has skyrocketed. A drawback of the technology itself, scammers are known to place robocalls using VoIP. “In a twisted way, they do that because of the pros of VoIP,” Akin said. “They can create a large number of those calls with minimal cost.”

How can I use VoIP?

There are two main ways to use VoIP: on a cellphone with an app, such as Skype, or on a landline, using a service provider such as Vonage. Your VoIP service provider may bundle high-speed internet with VoIP services or provide just the voice-call feature (internet sold separately).

To get started, first register with the service provider or app and set up your account. You’ll need a phone, an internet connection and a phone adapter if you’re using a traditional telephone. Then, follow these best practices from the experts:

  • Prepare for a power outage. Install a backup power supply, or ask your VoIP provider to forward calls to another landline or cellphone number during an outage.
  • Consider how you’ll reach 911. “Make sure your phone’s configured correctly to make calls to emergency services,” Turner said, “so operators can find you if needed.”
  • Be cautious with unknown numbers. Use a reverse phone lookup service if you get a call from an unknown number. If you find the caller’s name and want to know more, try using a people search tool.

VoIP makes phone calls cheaper and gives you more options, but it’s important to understand its limitations if you want to make a total switch from analog to digital.

Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.