What is VoIP? Everything you need to know about voice-over-internet-protocol

As the technology grows in popularity, it becomes crucial to understand how it works and how one can get the most from related services better. The best VoIP services for small businesses offer competitive pricing, various features including toll-free numbers and video conferencing, and high customer satisfaction ratings. In this guide, we break down VoIP technology, how it works, examples of how it differs from landlines, and VoIP’s various advantages and drawbacks.

What is VoIP?

VoIP lets you make phone calls using broadband Internet instead of traditional or analog phone lines. This means that VoIP lets two or more people communicate thanks to each having a reliable network connection, but VoIP can also be used for receiving or making calls to traditional landlines provided you have the right equipment. 

How does VoIP work?

VoIP works by converting your voice into a digital signal sent out over the Internet rather than through telephone wires, as is the case with traditional landlines. A wireless connection can send this signal to and from computers, VoIP phones, smartphones, or tablets using a wireless Internet connection. 

Although Ethernet has traditionally been considered faster and more stable than Wi-Fi, depending on your Wi-Fi service, this isn’t always true. Your VoIP call quality may be just as good without a wired connection as it is while using an Ethernet cable, it depends on various factors, ranging from your location to your Internet service provider (ISP).

While some VoIP providers strictly work by providing a virtual phone service that connects you from computer to computer, others allow you to port over an existing phone number. That means, rather than getting assigned a new number, you transfer your phone number to the new service.

In some cases, the VoIP service latches onto your existing number and connects it to a new business number. For example, a client calls the number assigned by your VoIP service. Being linked to your personal contact, that number will let you get the business call through your private number.

As such, VoIP services are viewed as very convenient for entrepreneurs and startups that don’t yet have a complex phone system but desire a professional business contact. A wide range of VoIP providers are available, and the technology works for companies of all sizes.

VoIP vs. landlines

While VoIP is a digital solution, landline phone service relies on physical wires, metal or optical fibers, to transmit signals. VoIP’s rising popularity could be credited partially to the fact that special equipment isn’t mandatory. While businesses can purchase special VoIP phones, if you have an existing Internet connection, smartphone or laptop, you can sign up for a VoIP service, download an app, and begin using a virtual phone service almost immediately.

VoIP might typically be more convenient than landlines, however this isn’t always the case. Virtual calling is entirely reliant on a stable internet connection and electricity. If you lose power and your Internet goes down, you may not be able to make calls using VoIP. Meanwhile, a traditional landline network that uses copper wiring should still work during a power outage.

Still, VoIP has proven to be worth the investment for many entrepreneurs and small businesses because of the often-added communication services provided. In addition to calling and texting through VoIP, these services offer video and audio conferencing, online chat, and internet faxing. Some more robust solutions also offer call center features, allowing companies to offer a more complex customer service and support experience through an entirely digital communications platform.

Some still view landlines — whether using optical fires or copper wiring — as the more reliable option, especially for businesses that don’t want to risk lost business due to potential Internet or power outages. Even if landlines cost more, an enterprise-level business with a sizable budget may opt for the traditional phone system. However, for cost and convenience, VoIP continues to make strides as more businesses use it to set up their companies’ phone systems.

Another business solution similar to VoIP phone service is Private branch exchange (PBX). PBX offers businesses the option of physical setups like landlines, virtual phone like VoIP, or a hybrid model that combines both.

What are the benefits of VoIP?

VoIP is increasingly seen as the great communication equalizer. For businesses of all sizes, VoIP provides certain advantages over a traditional phone number and system.

What are the disadvantages of VoIP?

Although VoIP has many things in its favor, there are a few problems that cause some businesses to reconsider using it for communications.

The takeaway

VoIP will continue to grow in use thanks to its convenience and cost-effectiveness. You should choose services beyond calling and texting to get the most from VoIP. Some services offer VoIP alongside chat, video meetings, and e-faxing tools. Your business would be best served through multiple communication channels, especially in-house communication. 

If you are part of a very small team with tight budget constraints, VoIP is a cost-friendly way to set up a business number and phone system fast and for less money. Compare plans, prices, and customer reviews, and a