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Voice Over Internet Protocol - What Does VOIP Do Exactly?

Updated on September 3, 2010

A simple explanation of VoIP

There's still a lot of confusion in people's minds about what VoIP is exactly. This is partly because the industry still hasn't adopted certain standards of encoding and usage. However, the basics of VoIP are the same and it's very simple to understand.

It's all Bits

Anything that travels over a wire contains information. Even your plug point contains a certain type of information to those who know how to read it. By this definition, telephone lines also carry information and so do the cables that connect you to the Internet. Depending on the type of information that's being carried, the equipment may differ and so will the protocols used to interpret that information.

Phone lines specialize in carrying just one type of information - voice. When you make a regular PSTN call, you're encoding your voice into information that will be understood by the systems it passes through. For a long time, this was the only way to communicate.

When the Internet came along, the foundations were set for generic information flow. When you browse to even the simplest page, you see a mixture of text, images, video and yes voice too! Many people began to realize that we could design a telephone system which ran on the Internet, with voice data being encoded in such a way that the receiver recognizes what it and is able to decode it.

This is the foundation of VoIP.

What VoIP is all about
What VoIP is all about

How Businesses use VoIP

Businesses have needs that are uniquely within the niche of VoIP services. For years, they got along with clumsy adaptations to the inflexible PSTN network such as expensive PBX systems that locked in their data and infrastructure. It was difficult to make adjustments and to scale it properly.

The Internet however, was built from the ground up based on scalability. VoIP was therefore able to provide an excellent phone service for businesses. Extensions, conferencing, a single number on multiple phone devices and a plethora of features make VoIP attractive to businesses. Moreover, the flexibility and scalability is unmatched. Business can rely on third part VoIP hosting providers instead of using their own infrastructure. This allows them to adapt to a rapidly changing environment.

HD Voice is yet another great advantage of VoIP. Using the latest codecs and high speed broadband, the business benefits of HD voice are undeniable and include higher customer satisfaction among other things.

So that's basically what VoIP is all about. Flexibility, cost, and ease of use.

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