What Is VoIP? (The Internet's Easiest Explanation)
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What Is VoIP? Answers to the 7 Most Popular Questions on VoIP

VoIP (Voice over Internet Protocol) is a technology that allows people to make and receive telephone calls over their existing Internet connection. In simple terms, it’s a phone service over the internet.

VoIP can offer a ton of different features and advantages that might not be available with your current phone service.

Features like call forwarding to any device and the ability to use your current number with a new phone mean VoIP is a smart option for business owners. There are also video, chat and file-sharing features that are included in many plans.

VoIP differs from the traditional method of making and receiving phone calls with analog lines. Analog phones, or “landlines,” are supported by local telephone companies. VoIP service providers transmit information digitally through a high-speed Internet connection.

Essentially, your phone calls get converted into data that zips through your high-speed Internet. VoIP phone service has several advantages over traditional phone service, which we’ll discuss later on.

Illustration explaining how voip works
How VoIP Works

How Does VoIP Work?

VoIP uses PST (packet-switching technology) while landlines use CSN (circuit-switched network). With a CSN, an analog signal travels through a network of copper wire cables in order to connect two separate points and establish communication.

In contrast, VoIP’s PST breaks down voice signals into small packets of data. It then transmits data over the Internet and sends and receives voice data when in use.

A digital phone system doesn’t rely on traditional cable lines — everything is powered and streamlined by a broadband Internet connection. By using the Internet as the medium, users gain more functionality, reliability and a diverse line-up of features.

What Are the Benefits of a VoIP Phone?

Common misconceptions about VoIP phones are that the call quality is poor and calls can only be made from a computer. Both of these are false.

In the early days of VoIP, the technology had not been fully established and took some time to hit mainstream adoption.

However, times have changed and VoIP has become a proven, reliable and cost-effective alternative to traditional phone service. In fact, VoIP phones have a higher quality audio range (twice that of traditional phone lines).

VoIP for Enterprise

While VoIP is a great option for individuals, enterprise sees the most benefits. Companies can use VoIP phones’ many features to be more productive in their daily communications.

Traditional analog lines are suitable for small businesses with a handful of employees, but businesses that regularly make long distance calls or have many contacts are better off using VoIP.

VoIP offers a variety of advanced technology and features that benefit your business. Virtual calling also offers more flexibility and agility in comparison to analog phone systems. Read on to learn about some of a VoIP phone’s stand-out features.

illustration showing the benefits of VoIP
The Benefits of VoIP

Seamless Mobility

With cloud communications, gone are the frustrating days of missing an important business call because you were away from your desk. VoIP phones use your existing internet connection so there is no need for dedicated copper wiring like with a traditional landline.

You’re able to manage your business on the road, tune into meetings from your mobile device and never miss a beat. You’re also able to seamlessly transfer a call from your cell phone to your office line without interrupting the conversation.  

The ability to take your office anywhere makes it easier to stay in touch with your customers, employees and potential clients. As if that weren’t easy enough, most VoIP phones come with a VoIP app which allows you to make calls, send texts and more using VoIP technology.

  • No need for copper wiring
  • Mobile business management
  • Call transferring from cell to office
  • Availability to use VoIP Apps

Cost Effectiveness and Extra Features

One of the biggest perks of using VoIP instead of analog phone services is that it drastically reduces telecommunications costs. Many features of a typical VoIP package would cost extra on a landline (of course, this can vary from carrier to carrier).

For instance, unlimited calling and faxing can help you bypass data charges and traditional toll charges for international and long-distance phone calls. VoIP phones also use only the necessary amount of data during a call, allowing you to save on data usage.

Included features like auto attendant, IM (instant messaging) and chat, or voicemail to email mean you don’t have to purchase such features independently.

  • Unlimited calling
  • Unlimited faxing
  • Auto Attendant
  • HD Voice Quality
  • Unified Communications
  • Video Conferencing
  • IM & Chat
  • Voicemail to Email

Streamlined Usability

Digital communications make it easier than ever for employees to smoothly connect with each other, clients and customers from their desktop. You can even forward calls to mobile devices.

Using a VoIP phone, you have the ability to share information, ideas and thoughts in real-time. Project delays are greatly minimized with instant collaboration tools such as IM, group chats and video sharing.

VoIP phones link to user accounts, not phone numbers so that you are able to switch between simultaneous calls on any given account.

With a traditional landline, you need to sign into several accounts to chat via phone, video and IM. With VoIP, you can chat seamlessly, screen share, send materials and more from one platform.

These communications can be sent from any Internet-connected location in the world, allowing you to work on the go.

  • Instant messaging (IM)
  • Group chats
  • Video sharing
  • Conference calling
  • Teleconferencing
  • Switch between simultaneous calls


Security is one of the biggest worries of business owners — with good reason. Your assets are precious and switching to new technology can make you feel vulnerable.

Contrary to many beliefs, VoIP is secure and 100% safe. There are several features available with today’s VoIP phone systems that aid in security.

For example, many VoIP routers come with advanced security features and dashboards. Ensuring that your network is secure is the first step to a secure VoIP connection.

The second step is ensuring that you partner with a VoIP provider who values security. This is why it’s important to have a checklist when looking for a VoIP provider.  

Good questions to ask include:

  • Are they accredited?
  • How many data security centers do they have?
  • What is their uptime?
  • Do they offer system status updates?
  • What software do they use?
  • Are thy HIPAA compliant?
  • Do they prioritize user security?
  • What infrastructure do they use?

Related: How to Choose a Business Phone System

Do I Need a VoIP Phone?

Even though VoIP is gaining popularity among enterprise clients, many businesses are still sitting on the sidelines wondering if VoIP is right for them. The truth of the matter is, VoIP is not right for everyone. However, it will work for most.

There are several factors to consider when deciding whether to transfer to VoIP service. We’ll cover a few of the most important ones below.

illustration of woman considering voip

Can You Use a VoIP Phone at Home?

Individuals can use VoIP, but as we mentioned earlier, businesses will see the most benefit. Companies of all sizes can use VoIP calling — from startups to large enterprises.

The main factor to consider is who you communicate with most. For instance, a small business owner who doesn’t make very many long-distance phone calls or video calls may not find that switching to VoIP is necessary.

However, if you make many calls a day, make out-of-city phone calls or would like to make conference or video calls, VoIP is the best option. VoIP also allows businesses to scale their business communications systems. It’s incredibly easy to add on more lines and grow into a network system.

Related: Find out how many phone lines you need for your business

Equipment Needed for VoIP

Many people think that VoIP requires expensive and complicated equipment. This isn’t necessarily the case!

You’ll need some equipment to take advantage of the services and features VoIP offers, but you can choose to scale up equipment-wise or keep it fairly simple.

If a user wants only the most basic of features, all they need is a phone, a fast Internet connection and the VoIP service itself. Many providers even offer a virtual number service which allows the user to take calls from their cellular phone.

While the phone, Internet and service itself are the core essentials, additional hardware means the user can take advantage of more features.

Additional VoIP Hardware

  • ATA (Analog Telephone Adapters)
  • Headset
  • Microphone
  • Webcam (or computer with built-in camera)
  • IP conference phone
  • E-Faxes
  • Giant TV screens and speakers

For instance, if you would like to use the existing phone system at your office you will need ATA (Analog Telephone Adapters). These act as an interface between the landline phone and the digital VoIP line.

You may also choose to make calls from your computer using a headset. If you’d like to participate in video calling, a webcam (or computer with a built-in camera) is necessary.

If you’d like to make conference calls, you’ll need an IP conference phone.

For those who really want to maximize usage (or for large companies), VoIP offers extra technology like e-faxes, giant television screens and giant speakers or microphones.

These features can be large in size and costly, but the option is available for those who wish to use them.

illustration of people using voip service

Is VoIP Reliable?

When VoIP services first started out, quality was inconsistent. This meant that calls sometimes dropped, jitters and delays were common, and drop-outs in voice could occur. As Internet bandwidth and service has improved, VoIP call quality has become much more consistent.

Today’s technology allows VoIP calls to sound as crisp and clear as a landline phone. However, this will depend on your Internet service provider’s network.

You can ensure your network has enough bandwidth using our speed test tool. Once you’ve determined your network is sufficient, you shouldn’t have any problems with reliability.

Emergency Calling

Emergency calling can be a bit of a challenge with VoIP. For instance, if the Internet connection is down, there is no way to make a call using a VoIP phone. For example, during a natural disaster, a cell phone or landline would be necessary to make an emergency call.

Another issue with emergency calling and VoIP is that — because VoIP uses phone numbers with IP addresses — there is no way to associate a geographic location with the number.

This means that when you call 911, the operator can’t automatically see your location. In the event of an emergency, you’ll need to be able to tell the operator where to send help.

speed test results
VoIP Speed Test

What Is the Best VoIP Service?

Having a VoIP phone system adds an element of credibility and reliability to your business. However, not all VoIP providers are the same. To decide which phone system works best for you, you will need to consider your specific business needs.

When choosing a business VoIP phone service you will need to decide what goals you have — do you hope to use your same phone system? Will you choose to get hosted in-house VoIP service or go for full cloud-based service?

Assess Your Current and Future Needs

  • Call volume
  • Current resources and personnel
  • VoIP functionality

You will need to look at your current and future call volume for yourself and your employees to determine which VoIP plan you will need. Consider scalability options so that you can grow seamlessly.

Make an audit of your current resources and decide which you will want to integrate with your phone service.

Find a Reliable VoIP Provider

Once you have an idea of what you are looking for functionality-wise you can look for a service provider that matches your budget and operational needs. Find a VoIP provider with great reviews, a good reputation and excellent customer support. You can even look around to see which industry leaders or competitors are using which services in your area.

Now that you know what a VoIP phone is and how it works, you can determine if it’s right for you. For most people, VoIP is the best option if you want cost savings, clear communications and useful features.

While there are several factors to consider such as the speed of your Internet connection and equipment, the choice should be an easy one.

If you decide to switch to business VoIP service, remember to do your research and find an accredited company that offers top-of-the-line security and equipment.

For an idea of VoIP features and pricing, you can compare VoIP plans for small to medium and large businesses from Nextiva.

About the author

Yaniv Masjedi joined Nextiva in 2008 and currently serves as the Vice President of Marketing, focusing on marketing strategies and customer success. He graduated Summa Cum Laude from UCLA.

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Contact an Amazing Service
Sales Expert
(800) 799-0600

See how Nextiva will transform
the way you communicate.