It’s no secret that VoIP is becoming one of the most, if not the most, popular forms of communication on the planet. Even if you don’t know much about this type of telecommunication, learning more about this topic can help your business improve in more ways than one.
But did you ever wonder how does VoIP works?
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Voice over Internet Protocol, commonly known as VoIP, is a method that turns analog voice signals into digitized data signals, enabling users to make phone and video calls, all while using a stable internet connection. By doing this, businesses and individual households can take advantage of the countless features VoIP offers, for a low price.
As stated before, VoIP stands for voice over internet protocol, which is also known as IP Technology. These methodologies that are used include a group of similar technology working together in order to form and deliver voice and media messages over the internet. In the past, these types of communications have traditionally taken place using public switched telephone networks, which is very similar to a landline.
By utilizing this form of technology, your voice messages are encoded into digitized data packets that travel to another user and are then reassembled at the receiving end of the call. This process is called encoding-decoding and is done through codecs. Codecs are there to ensure that all data from the voice message is compressed so that these packets can be transmitted faster, and in turn, delivering better call qualities. These certain codecs are very important for VoIP systems because of the digital signals that are used.
While this idea of using codecs and digital voice data seems complicated to some, we will give you an example to make this process easier to understand. Let’s simplify this whole procedure and think of this in terms of an average email. Like an email, your voice call also has a destination, which is the number that you dial, or the recipient of the message. Your voice is turned into a code, so that it can be moved through the internet, much like an email, and must be converted back into what was originally sent when either transmission gets to the receiver.
This process is made much easier if both you, and the person you are sending the communications to have VoIP because this entire process can take place over a stable internet connection. If they have a traditional network that is used, each communication can only travel so far before switching to the public phone networks. If this is the case, some calls may be disrupted, and the quality might not be as ideal as it should be.
How Are VoIP Calls Made?
Unlike the other more traditional phone services, there isn’t one correct way to make VoIP phone calls. Though, there are three common ways to receive VoIP services, which we will explain below.
- ATA, or Analogue Telephone Devices, will allow users to use an analog data phone with VoIP services. This service will connect with your phone and internet, in order to encode the outgoing analog data into easier transmitted data packets. This way, all the messages you are sending and receiving can journey across the internet. ATA is a lifesaver for those that want to stray away from traditional phone services all while paying a lower price for better call quality. By making the switch, you can save thousands of dollars in new hardware while improving call quality and productivity.
- IP Phones, which are also known as internet protocol phones, look exactly like a normal phone but are built especially for VoIP phone services. These phones are connected to your router, instead of into a wall rocket with the basic old school cables. Your business doesn’t need to have a headset or invest in ATA because your phones already use digital transmissions.
- Softphones are another type of phone software that installs a VoIP service onto your computer or laptop, which traditional phone interfaces. While most businesses pay a bit more for these services, the long term costs are very low, which in turn, will end up saving your company money when making calls. Unlike the other types of receiving software, you will need a microphone and speakers, along with a strong internet connection to make calls.
Advantages of VoIP For Your Business
In most countries, old public switched telephone networks are being phased out and replaced by more advanced networks, meaning VoIP will soon be the main telecommunication provider worldwide. This alone is an excellent reason to switch, but here are a few more benefits your business can achieve by making the switch.
- VoIP systems are loaded with features for no additional fees. Most traditional phone providers charge large amounts of money for a simple contract, then add on various fees for different upgrades or features. Luckily, VoIP phone systems don’t do this. You can get added extras such as caller ID, call forwarding, call waiting, and call transferring features at no extra cost. The features that are offered have a wide range, and the more providers you look into the more features you can discover. It is important to note that different providers will quote different prices, and offer to pay upgrades, but there are also many that give one flat rate for all included services.
- Most VoIP phone systems will be able to work with traditional, hybrid, IP, or hosted phone systems, making the upgrade seamless. You may find that some providers will require an ATA or additional license, so searching for a provider that can assist you in this all while providing the lowest cost, will be beneficial.
- All types of VoIP phone systems will save tons of money for businesses. With VoIP using the internet as their main pathway, paying for line rentals will be the first and most significant place you will see your money being saved. Some providers of VoIP services will offer line additions as low as $5 per line. Along with those savings, phone calls are up to a third less expensive and will include free international calls for most plans. For businesses that have offices overseas or need to call clients around this world, getting free international calls is most ideal. Mobile rates in all are lower, leaving some VoIP clients to save 70% more on their monthly phone bills after making the switch.
- VoIP systems are a lot more flexible than that of a basic phone plan. With traditional phone plans, adding users will cost money, and will even require services to come and install more outlets or hardware. VoIP systems make it easy for businesses to scale up, and even scale down if needed. The same goes for managing all features that your phone plans are giving you. If you wish to make changes to your VoIP phone system, you can do all of it yourself using a simple and user-friendly web interface, or even your smartphones.
Disadvantages of VoIP For Your Business
While VoIP does offer many businesses endless benefits, there are a few things that you need to look out for. Of course, as with any form of technology, there are some drawbacks that come along with making the switch.
- Your internet connection plays the largest role in the dependency of VoIP phone systems. If your business doesn’t have a strong or stable internet connection, quality of service issues will have large effects on the quality of your system. It is important as well to make sure that your internet bandwidth is capable of handling a VoIP system in addition to general office uses. If your internet isn’t able to support this, you will experience heavy call dropouts and slow download speeds.
- VoIP systems also will bring the risk of viruses and potential hackers. Yes, it’s very rare, but VoIP hacking is sometimes an issue that businesses will run into. After the installation process, talking to your provider will give you better insight into how to prevent this from ever happening.
- This type of phone system can also make some emergency calls a bit of a challenge. This happens due to the fact that VoIP uses a phone number as your IP address, so a geographic location can’t be drawn if need be. With the more traditional types of phone lines, emergency services could trace your location, making it easy to pinpoint exactly where each caller is located. With VoIP, there is, unfortunately, no way to do this, which might pose a risk to some.
Conclusion To Your VoIP Systems Guide
After reading this article, we hope you have gained the knowledge needed in order for your business to make the switch to VoIP phone systems. There are plenty of advantages to making the change, and if your business prepares properly, the switch will be made effortlessly. By searching online or through word of mouth for the best VoIP providers for your company, you will be sure to pay for exactly what you are searching for.
Christopher has experience with B2B and B2C marketplaces, e-commerce, data, analytics, SaaS software, online publishing, and consumer electronics companies, my specialty is startups, re-starts/turnarounds, growth, capital raising, and IPO or M&A exits. Board and management roles have been held in two IPOs (totaling $1.4 billion), three sell-side M&As (totaling $2 billion), four buy-side tuck-ins (totaling $100 million), and three startups (totaling $50 million).