How VoIP Works — Busting Out of Long Distance Rates

VoIP is the newest advancement in audio communications technology, and has a

variety of different applications that make it useful. VoIP stands for Voice

over Internet Protocol, and how VoIP works is actually quite revolutionary

because it streamlines the process of sending analog audio signals by converting

them to a much easier to send digital form for transmission.

To understand how VoIP works, you’ll need to understand the basic concept

behind regular analog audio communication as well, since this is the precursor

for VoIP. Analog phone calls are actually made via fiber optic networks by

digitizing your voice communications for sending the signal across thousands of

miles, but once it gets to the final destination (a home or office phone, for

instance), the signal is once again converted to analog.

During these calls, the switches remain open even while there is dead air and

no conversation is taking place; the circuit is also open in both directions

even when only one party is talking and the other is listening. This isn’t

terribly efficient, and slows down the communication of information


Packet switching streamlines VoIP

VoIP works on a different premise — rather than circuit switching, data

packet switching sends and receives information only when you need it instead of

in a constant stream. It also sends the information packets along whatever open

channels are available rather than a dedicated line, which is much more

efficient. The information is simply reassembled at the source.

The payload of each packet has a destination coded into it determining the

ultimate destination. When the computer at the other end receives all of these

packets, it will reassemble the information into useable form. This form of

sending audio data is extremely efficient because it always takes the cheapest

route that is also the least congested.

The compression of information and use of multiple routes in order to send

that information over the most efficient route makes sending audio over packet

switching quicker, much less expensive and more efficient. The number of calls

that can be sent is orders of magnitude higher than it was with the more

traditional analog circuit switching systems.

For companies, the savings in long distance charges can be in the hundreds or

even thousands of dollars per year. If companies also make extensive conference

calls, VoIP makes even more sense when combined with conferencing options such

as document sharing in systems offered by companies like Voxwire and iVocalize.

Different types of VoIP calling are available

  • The most commonly used VoIP system is from one computer to another. To set
    up this type of service, you will need to have a sound card installed in both
    computers along with microphones and Internet connections. For practical
    purposes, you’ll want a broadband connection or DSL — a dial-up modem will be
    so slow the sound quality just won’t be that good. Aside from that, all you
    need is a software package that can set you up with everything you need to use
    VoIP to make phone calls to whomever is also set up with the same system.
  • You can also invest in IP phones if you want something that looks just
    like your standard analog telephones but with VoIP connectability. These
    simply replace the old-style RJ-11 connectors with Ethernet connectors
    (RJ-45). Hardware such as routers and the needed software are built right in.
  • Analog telephone adaptors (ATA) enable you to connect a standard telephone
    to your computer Internet connection in order to take advantage of VoIP
    options. ATA converts analog signals to digital so that it can be transmitted
    properly via the Internet.
  • The newest option on the market is the Wi-Fi phone, which uses
    short-distance Internet transmission of VoIP to replace cell phones calls.
    Wi-Fi broadcasts over the radio spectrum to cover short range areas for users
    in certain areas, and these “hot spots” have popped up across the U.S.

The upshot of VoIP is that standard long-distance charges may soon become a

thing of the past. As more and more consumers turn on to VoIP and broadband

connections make it easy and inexpensive (as well as practical) to make phone

calls over the Internet, fewer individuals will be willing to pay high rates to

make a telephone call they can make for free or next to nothing via their


VoIP saves you money on long distance

There’s no by-the-minute charges with VoIP, no set-up fees, and no “time of

day” or overages. That’s the great thing about VoIP plans. You just pay a

monthly fee and get to make all the calls you want over your computer for one

monthly fee. It’s so simple and elegant, and it’s the solution that everyone’s

been wanting and waiting for far too long.

You don’t have to wait for a certain time of day of day of the week to make

telephone calls with VoIP. There’s also the advantage of being able to use your

VoIP connection from anywhere — remember, you’re not tied to a phone jack to

use your number, but an Internet connection, so you can call from anywhere with

many calling plans.

Some of the companies that offer excellent VoIP plans with unlimited calling

are listed below with their most popular options:

  • Vonage currently offers a $24.95 per month unlimited VoIP package
    to anywhere in the U.S. or Canada. It includes voicemail, call forwarding,
    three way calling, call waiting and caller ID.
  • Packet 8 can provide unlimited VoIP for $19.95 a month in the U.S.
    and Canada with a variety of features like call waiting and three-way calling,
    and can also give you video phone service for about $29.95 per month.
  • AT&T’s CallVantage provides the usual U.S. and Canada broadband
    calling with voicemail, call waiting, etc. along with email, a call log and a
    ‘do not disturb’ option, all for $29.99 a month. You also get to keep your
    phone number for life, no matter where you go — a great feature for some who
    move around a lot.

VoIP in web conferencing packages

VoIP is used in almost all web conferencing services as an alternative to

standard conference calls, and looking into these packages will give you an idea

of some ways to combine VoIP with extras such as white boards, document sharing

and video. For less expensive options, many companies can provide strictly audio

VoIP conference calls combined with text messaging and document sharing without


Some companies that offer VoIP in web conferencing packages separate from

video conferencing are:

  • Voxwire offers voice communication with features like auto-queue,
    mute options, individual speaker adjustments and moderator controls along with
    a “follow me” browser system so that all participants can view a shared
    desktop. Two persons can use VoIP for $9.95 a month, or up to ten in a
    conference environment for $29.95 per month.
  • VoiceCafé provides similar services with a wide range of options
    that vary from packages with VoIP capability for five people at a time on a
    conference call to up to 500 in one conference call, all for a flat monthly
    fee. The prices vary depending upon what package you choose, and there are
  • iVocalize offers VoIP along with Internet conferencing options like
    PowerPoint presentation capabilities and presentation recording for future
    playback. They also provide optional Unicode translation in thirteen
    languages. The most basic VoIP package begins at $10.00 a month with a prices
    going up incrementally depending upon your needs and how many will be involved
    in your conference calls.

It is obvious that conference calling as well as standard long distance

calling will be changing greatly in the near future as VoIP changes the

landscape of telephone service. “Land lines” for long distance calling will

eventually become obsolete as broadband becomes more common and makes VoIP just

as commonplace as any other type of telephone call.

And with the greater portability of soft phone options built into laptops and

the use of ATA phone adapters, the use of VoIP in the average home will arrive

sooner rather than later.

This article on the “How VoIP Works” reprinted with


Copyright © 2004-2005 Evaluseek Publishing.

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