If you are interested in knowing everything about the VOIP, this VoIP Guide is for you! In this guide, you will get to know everything about VoIP and its features.

You will come to know about the history, common terminology, how to get started, and finding the right solutions for your business.

So, if you are looking to set up a communication infrastructure or scale your business, this guide is for you. So, let’s get in it:


Communication is the core of every business; it can help foster a good relationship between you and your team, which improves the efficiency and efficacy of the company.

This is particularly true when working remotely by navigating uncertain times. In addition, employees who invest in delivering a clear line of communications will build trust among employees, leading to increased output, productivity, and morale.

On the other hand, poor conversations, whether due to inefficient business phone services or insufficient technology, lead to downfall. So, the best way to upgrade the communication system is by upgrading your regular phone service plans and using VOIP service.

What is VOIP?

Voice Over Internet Protocol, is a phone technology that lets you make and receive voice calls using the Internet instead of the traditional phone lines. This digital technology converts voice signals into the IP packets that are transmitted over the Internet.

Unlike the traditional phone system, which is limited to desk phones, VOIP lets you make and receive phone calls from your regular smartphone, laptop, tablet, and VOIP-compatible phone set. Since all the calls are made from the Internet, it is cost-effective for long-distance and domestic calls. In addition, you can make calls by using the same number or manage multiple phone numbers with a single person.

Additionally, VOIP is not just limited to calls; you can enjoy features like SMS, chat, call recording, auto attendants, and more.

Vonage - Reliable VoIP Solutions

Our Rating

  • Voice, Video & Text Collaboration
  • Free Consultation
  • Plans For Large & Small Businesses
  • Conferencing Tools
  • CRM Integration - Including Salesforce
  • 99.999% Uptime

History of VOIP:

Danny Cohen first introduced the packet voice network in 1973 as a part of the flight simulator application, which operated across the ARPANET. At ARPANET, real-time voice communications were not possible with the pulse-code modulation digital speech packets, having a bit rate of 64 Kbps, greater than the early modems.

Then in 1966, Fumitada Itakura of Nagoya University and Shuzo Saito of Nippon Telegraph and Telephone came up with linear predictive coding, a speech coding data compression algorithm capable of compressing down the bit rate. This compression in bite rate to 2.4 Kbps made it possible to make the first successful real-time conversations over ARPANET.

In the next two decades, various other forms of packet telephony were developed, and many industry leaders came to support new technologies.

After some time, ARPANET got terminated, and IP telephony comes in testing for commercial use till the introduction of VocalChat, first in 1990 and then in Feb 1995.

Officially, the VocalChat, which was an audio transceiver commercial software, was released by VocalTech. The software was patent by Lior Haramaty and Alon Cohen and was followed by other VoIP infrastructure components like telephony gateways and switching servers.

In the late 1990s, the first soft switches and the new protocols like H.323, MGCP, and the session Initiated Protocol became popular. In early 2000, the high-bandwidth Internet connection for the residential and businesses boosts the Internet Telephony service providers (ITSPs).

Later the open-source telephony system, Asterisk PBX, was developed, and the entrepreneurship in the voice over-IP service with the new technology and the cloud services in the telephony gained momentum.

Apple’s Facetime, by using the AAc-LD, was introduced in 2010, and the CELT codec came in 2011; the Opus codec became popular in 2012; and finally, the paradigm shift in the VOIP industry was seen in 2015 with the WhatsApp voice calling feature.


Year Achievements
1966-1974 Linear Predictive Coding was introduced, packet voice applications came into existence, and the first successful real-time conversation over ARPANET was introduced.
1977-1991 Separation of IP from TCP, the code-excited linear prediction (type of LPC algorithm) was developed, a voice-over-IP application (speak Freely) was released to the public domain.
1992 InSoft Inc. announces the desktop conferencing product Communique, which includes VoIP and Video.
1993 The VocalChat, a commercial packet network from VocalTec, was introduced.
1995 VocalTec releases internet Phone commercial Internet Phone software
1999 SIP specification RFC 2543 was released, the first open-source private branch exchange software was developed, a discrete cosine transform was adopted
2004-2012 Many companies start introducing the Commercial VoIP service providers; wideband codec introduced, Apple introduces FaceTime, and later Opus Codec was introduced by using LPC algorithm and MDCT.

How does VOIP Works?

The VoIP phone system works by using packet-switching technology, which converts analog voice signals to digital data. The sound waves get converted to digital data, allowing people to use the Internet as the prime mode of communication.

Here’s a step-by-step guide about how VOIP phone works with the following steps:

  • When a VoIP phone receives data digitally from another device, it divides the data into small information packets and puts the destination address on every packet.
  • The converted data is then sent to your broadband line into the router.
  • Once the router receives the data, it finds the shortest path to reach its destination. The packet might have to pass from multiple routers to finalize the actual route.
  • The packet is received at the destination, and the receiving VoIP uses the address for each packet to put them in the correct order.
  • The VoIP user then receives the data as a recognizable speech.

Additionally, how VoIP work also depends on the type of method you are using:

  • IP Telephones: These devices work similarly to the traditional phone system, but they are plugged straight into the device in IP telephones. Also, IP phones come with hardware and software that can be connected with the router or server.
  • Computer-to-computer services: This method needs software and a decent sound card. Also, a microphone and a headset are a plus.
  • Analog Telephone Adaptor (ATA): An ATA adaptor lets you plug the traditional telephone into your computer to make VoIP calls. All you need is an analog signal from your traditional phone to convert into the digital one.
  • Analog Telephone Adaptor: An analog telephone adaptor helps you plug your traditional telephone with the computer and make internet-based calls. Using them, you can take analog signals from your traditional software to convert them to digital data, which can then be transferred to the Internet.

What Equipment Do you Need for VoIP?

The right equipment depends on which method of VoIP you are using, but the most important thing you need is a reliable internet solution. A fiber-optic one will be more reliable, and the unlimited connection will let you make unlimited calls.

For businesses, you can use FTTP or Ethernet connection. Also, depending upon the type of VoIP connection, you will need a different type of equipment.

  • For VoIP with an adapter, you will need A VoIP adapter with a compatible phone. If you are using a router, you will also need a compatible router.
  • For VoIP connected with a computer, you need a desktop or laptop computer with an Internet connection, the right software, and a headset or speakers and microphone.
  • For VoIP with Smartphone, you need a Smartphone connected Wi-fi and your chosen VoIP-connected app.

Fixed vs. Non-Fixed:

Fixed VoIP:

Fixed VoIP can be the replacement for your landline traditional PSTN phones with more features and functionality. The Fixed VoIP is linked with the physical address, and if you move from one location to another, you can update it easily.

You can use a Fixed IP phone to make and receive calls; the service provider may offer free or chargeable calls on your bill. You can also use the fixed service through a mobile app, which you might not do with a PSTN phone.

Here are some advantages of fixed VOIP:

  • It can be used by residential and commercial users in replacement of the traditional phone lines.
  • You get features like emergency dialing and real-time alerts
  • Cost-effective, especially for making long-distance & international calls.

Non-Fixed VoIP:

With non-fixed VoIP services, users can sign up and subscribe without any physical address; Skype and Google Voice are the best examples of these two. Unlike fixed services that fall under various laws like TCPA, non-fixed are not highly regulated. Also, the fact that users from one country may signup with this and give the address of another country makes it ideal for the organizations who want to maintain a local presence.

Advantages of non-fixed services:

  • Anyone from any country can signup for free
  • Perfect for communications between remote teams at low costs
  • You only have to pay for internet users to make calls anywhere

Types of VOIP

  1. Hosted VoIP services: Hosted VoIP services are for businesses that can’t afford an in-house VoIP system or want to cut the cost of hiring experts. Some hosted organizations also have leasing solutions to ease out the fixed cost for the VoIP system. It can be out from the company with the VoIP system installed in the premises and connected to its communication line.
  2. Hybrid system: A hybrid network uses more than one type of connecting device, such as a home using Ethernet and Wi-Fi to connect to computers. Business offer relies on a hybrid network to ensure that the employees who are not working on the same devices will access the same data. This type of network is accessible and cost-saving.
  3. PBX Network: In the PBX network, the existing landline connected to your current service providers will be replaced with the Internet connection. This can be dedicated or routed through the existing network connection.

Vonage - Reliable VoIP Solutions

Our Rating

  • Voice, Video & Text Collaboration
  • Free Consultation
  • Plans For Large & Small Businesses
  • Conferencing Tools
  • CRM Integration - Including Salesforce
  • 99.999% Uptime

What are VOIP numbers used for?

Unlike the PSTNs, where phone numbers are tied to the physical locations, the VoIP is free from all restrictions. The users only need an Internet connection with an ATA converter to use with the virtual number. Using this, the users can make or receive calls regardless of location. Also, VoIP is used for sending text messages, voicemails, videos, and even fax. Let’s consider how VoIP can be used:

  • As Area Code: One of the most popular reasons for businesses switching to VoIP numbers is establishing a local presence without having any local office. Businesses can choose the area code and thus reduce the cost of a call, giving it the local appearance.
  • Using it as a Toll-free Number: Businesses can set VoIP numbers as a toll-free number to receive calls. This boosts the credibility and trust among clients. Also, a toll-free number can be easily routed to another number; incoming calls can ring multiple devices, and users can pick the call with the most convenient device.
  • Scalability and Mobility: VoIP numbers are not tied to any wire or landline. They offer complete flexibility of receiving calls from any device. Also, you can use the same number to transmit fax, text, and voicemail; you can also engage in video chat and conferencing using this.

6 Impressive Features of VoIP

Call Forwarding:

Small businesses can’t be open around the clock, which means there might be some calls that get unnoticed. A good VoIP provider will help you with the voicemail system to ensure that the calls cannot get unnoticed.

Most of the industry VoIP providers also offer the ability to convert phone messages into emails. A feature like call forwarding allows users to receive calls regardless of location.

Call Transferring:

Call transferring is another compelling reason why you should switch to VoIP calls. You can press the button on an IP phone to transfer the incoming call to another phone number.

The caller doesn’t have to call that number, they will be put on hold, and their call will be transferred. If you are using a softphone, you can use software to transfer calls. This is used in call centers, where the calls need to be transferred from one employee to another.

Call transferring also comes in handy when the caller dials the wrong extension and redirects to the right department. Call transfer is of three types:

  • Blind Transfer: This is used when a person who picks the call first transfers it to the respective person without informing the caller.
  • Attended Transfer: This is used when one employee transfers the call to another, but before doing also informs the recipient about the issue.
  • Call recording: If your company works in a regulated industry, you might need to record calls. You may also need to record calls to track customer satisfaction and questions. A good VoIP provider helps users record calls at the click of the mouse and store them in audio format. Call records may be used as evidence to review performance or quality for improvement.

Call Screening:

VoIP’s call screening can save your time and lets you block numbers with whom you don’t want to connect. You can create a list of approved numbers from where the numbers go in the blocked list or the acceptable ones.

Activate call screening to see the caller’s ID before you connect the call. You can also accept or reject the call or can fit it into the screening list to reject that call.


If your office receives hundreds of calls and your workers are continuously on the phone, use the voicemail feature. If your employees are busy with some other clients on the phone, you can put them to voicemail. The Voicemail will server answers your incoming call and sends a message to the user’s mailbox.

You can retrieve the inbound voice messages the way you listen to your answerphone. You can also configure the VoIP phone system to send it to the email address. This way, you can check your mail and voicemail and respond to urgent messages.

Caller ID:

Caller ID is simple; when you receive inbound calls, the screen displays the caller’s name and number. SIPs verifies the number, and you can configure your VoIP system to enable callers and the rejected callers.

Why is VOIP Different From Other Services?

Now that you know the impressive features of VOIP and how it works, the next thing that arises is why you should invest in it?

Low-cost Plans: Since VoIP uses minimum hardware, the hosted VoIP services are available at a low cost compared to traditional phone services. Also, the traditional landlines are expensive because of the limited number of lines available. This isn’t a problem when the calls are made over the Internet.

Unlimited Calls: Since VoIP calls travel from one point to another over the web, these calls are considered local ones, even though you are calling from another country. The quality of these calls and the prices will also be the same. Many good VoIP providers offer inclusive call plans at monthly rates, which are advantageous to businesses.

Scalable and Flexible: VoIP plans are flexible and scalable; you can customize and specialize the VoIP plans according to your business needs. Also, you don’t need to spend money on expensive hardware and a dedicated network with VoIP. Instead, you can add your team members with just a few clicks.

Standard Premium Features: VoIP subscribers offer various attractive features that are not present in traditional phones. Some of them include international calling, voicemail to email, auto call attendant, voice calls, mobile app, VoIP unlimited, and more. These features are very important for businesses of all sizes as they allow them to communicate more effectively. Additionally, they help in increasing the customer relationship among businesses.

The Advanced Business Phone Features: VoIP also includes advanced business phone features like setting up conference calls with it. Also, most VoIP service providers offer features like a virtual receptionist, hold music, voicemail to email or text, call waiting, and more.

VoIP Terminology

Now that you know a lot about the basic VoIP, its uses, how it works, and its technology, let’s cover some common terms popular in the VoIP guide. These terminologies will help you understand how VoIP works and how you can implement it.

SIP: SIP, Session initiated Protocol is used to make VoIP calls in real-time. It helps in establishing, modifying, and terminating connections. SIP is used when more than one endpoints communicate via voice, video, or message.

PSTN: Public Switch Telephone Network collects different telephones and various other voice-focused devices, including the devices that operate on national or local levels. In other words, a PSTN is an infrastructure that lets you make private and public telecommunications with ease. Using them, you can connect the telephone lines, fiber-optic cables, cellular networks, and undersea telephone cables with each other.

Codec: Codec, in connection to VoIP, helps compress VoIP data to improve the connection speed and save bandwidth. Some Codec also provides ‘silence suppression, which helps stop the data from being transmitted when one or more parties are not talking in the devices. It also improves your call quality by improving the frequency range of a typical phone call.

Dynamic Host Configuration Protocol: DHCP uses the client-side network devices to assign IP addresses and other things to connect. It is also used to identify the uniqueness of the IP address.

Latency: Latency is the interval between the signal to be sent

Vonage - Reliable VoIP Solutions

Our Rating

  • Voice, Video & Text Collaboration
  • Free Consultation
  • Plans For Large & Small Businesses
  • Conferencing Tools
  • CRM Integration - Including Salesforce
  • 99.999% Uptime

Disadvantages of VOIP:

Everything has its disadvantages with VoIP also on the list; here are few downsides that are associated with VoIP you must know:

  • You need a reliable Internet Connection
  • Latency and Jitters
  • No location tracking for emergency calls


This completes our VoIP guide; if there’s something more you like to add, do let us know in the comments below.

Read More: