Voice over Internet Protocol (VoIP) is a phone system that transmits your voice over the Internet. It’s also known as IP telephony, internet telephony or internet calling. In contrast to a public switched telephone network (PTSN), VoIP allows you to make phone calls without the use of phone lines. It’s quickly becoming the default means of communication for modern businesses, replacing the once-standard analogue phonelines.

VoIP is a hassle-free, low-cost option suitable for many different types of business. It grants you flexibility, helping enable remote working and letting you manage everything through a computer app. VoIP also has the benefit of lower call charges, as well as reduced outlay on multiple phone lines or lots of hardware.It grants you flexibility in your telephone system.

Read on to find out more about VoiP systems – or get in touch with one of our experts to learn how Mode can help your business achieve its digital transformation.

How does VoIP work?

Unlike a traditional analogue telephone call, VoIP transmits your voice digitally. VoIP converts audio into packets of data that are converted back into audio at the other end of the line. This compressing and unpacking is handled by something called a ‘codec’, a hardware or software process that changes audio signals into data – and back again.

These data packets go from A to B through an internet protocol (IP), either via a Local Area Network (LAN) or online. Delivery is instant: the person you are speaking to experiences a phone call just as they would with the traditional method.

You can use software or hardware options to make VoIP calls. With hardware, you use a traditional handset and you’d be hard-pressed to see the difference between VoIP and analogue telephone calls.

The other option is using a software-based VoIP phones, often referred to as ‘softphones’. These are applications installed on a mobile phone or computer, and many of them have interfaces resembling a classic phone handset. You can use the computer’s built-in microphone and speakers to make calls or opt for a headset to boost your audio quality. Softphone providers include CloudTalk, GoTo Connect and LiveAgent. 

Why upgrade to VoIP?

We’ve focused a lot on the similarities between VoIP calls and traditional ones, so you may be wondering: what are the benefits?

The major one is cost. VoIP means you don’t have to invest in expensive private branch exchange (PBX) hardware, new phone lines and extra wiring. One ethernet connection is sufficient for physical VoIP phones, while softphones are unlikely to need any additional connection. Businesses will also save on international calls, since going through the internet sidesteps the premium rates that have long bedevilled global companies. Another money-saver is that repairs for VoIP systems are cheap – there is simply less hardware involved, and it tends to be newer and more reliable than traditional telephony.

An additional benefit is the inherent flexibility that VoIP phone systems offer. This is a boon to companies seeking to be as accessible and agile as they can. A cloud phone system, for example, will let users make and receive business calls from anywhere they can access an internet connection. A handy perk is that the phone number will remain unchanged, helping your business present a professional image. In an age where remote and hybrid working are the norm, this consistency can make a big difference to the smooth running of a firm.

Finally, businesses with a VoIP system will have an easier time scaling. Because VoIP works through a network, adding another user is as simple as setting them up with a laptop or a handset. A fast-growing company can save themselves a hardware headache by investing in VoIP.