Voice Over Internet Protocol Explained

You’ve heard VoIP dramatically lowers operating costs, offers greater flexibility, provides mobile calling features from any device with an internet connection, and seems to completely revolutionize phone services for business and personal use.

The one thing you haven’t heard?

A clear answer to the question, “What is VoIP?

This post is here to solve that problem.

You’ll learn what VoIP is, how it works, what features to look for, and why it’s worth making the switch.

What Is VoIP?


VoIP (Voice over Internet Protocol) is a digital telephone system that lets users make and receive phone calls over the Internet as opposed to over the traditional wired Public Switched Telephone Network (PSTN.)

VoIP has many names: virtual telephony, online phone system, cloud phone service, IP telephony, virtual calling tool….the list goes on.

All these terms mean the same thing: instead of using a traditional landline phone for voice calls, VoIP manages phone communication over the Internet.

The “IP” in VoIP is another key part of the process.

IP stands for “Internet Protocol” — and it’s responsible for facilitating local and long-distance over digital phone lines instead of physical landlines.

How Does VoIP Work? 


VoIP technology works by breaking up the voice audio from a phone conversation into digital voice data packets, then sending these data packets to the recipient over the Internet.

The more complicated explanation?

Codecs compress/disassemble these voice data packets so they can travel over the IP network (a local area network or a wide area network.) Once these voice data packets reach their destination, they’re decompressed/reassembled and sent to the recipient, transformed back into words and phrases instead of just digital signals in transit.

VoIP users can make calls via VoIP softphones, internet VoIP phones, and/or by connecting traditional analog phones to a VoIP system via an analog telephone adapter

Key VoIP Features

Though there are over 90 VoIP features — and counting! — to choose from today, we’ve outlined the essential functionalities that define virtual phone communication.

Call Routing


Call routing is a call management strategy that distributes incoming calls to agents according to pre-set criteria.

The goals of call routing are to ensure that the caller is connected with the best available agent, to decrease call wait times and call transfer rates, and to increase first call resolution rates.

There are numerous different routing techniques to choose from, with the most popular being:

  • List-Based Routing: Routes calls according to a pre-set, linear list that starts at the top again after each call. For example, the call is first sent to Agent A, and is only sent to Agent B if Agent A is unavailable. The next call is again sent to Agent A.
  • Round Robin Routing: A turn-based routing strategy that sends the first call to Agent A, the next call to Agent B, and the next call to Agent C.  Ideal for commission-based sales teams and to prevent overburdening specific customer service agents.
  • Skills-Based Routing: Routes inbound calls according to agent strengths, areas of expertise, and skillsets. For example, if a customer calls in with questions about which product they should buy from your business, they’ll be sent to a product specialist. But if a customer called in with questions about how a product worked, they’d be sent to technical support.
  • Time-Based Routing: Routes calls according to specific agent schedules and/or time zones, especially helpful for geographically diverse times
  • Relationship-Based Routing: Routes calls to agents according to previously established working relationships, such as a client’s preferred agent or VIP caller status



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