What Is VoIP: The Technology and Its Benefits

Every business owner seems to be asking the question what is VoIP and how it can help in reducing my telephone bills. VoIP is an acronym for voice over internet protocol, a system of transmitting speech over the internet. That’s about all but does not answer the question what is VoIP and how it benefits businesses.

Actually the question what is VoIP and its benefits to businesses can be answered by going into the history of business phone systems.

Medium and large businesses had to install a private telephone exchange (PBX) in their premises to save the cost of internal telephone calls. It was switchboard manned by an operator who connected internal calls, routed incoming calls to the concerned department and connected outgoing calls to the telephone company’s network.Manual system gave way to automated business systems that eliminated the operator. The primary objective was achieved but the matter of high cost of long distance calls still remained. The advent of the internet eventually provided a solution. The massive growth of data networks led to better understanding of packet switching, the method of digital communications that groups all transmitted data. The convenience and low cost of digital data transmission was tempting and led to the development of VoIP. That brings us back to the question what is VoIP.

What Is VoIP: What Is It Exactly

VoIP is a system that uses the internet to transmit calls. Analogue audio signals are first converted into digital data and transmitted over the internet. This may be through an internet phone or a normal phone connected to a router through an analogue telephone converter. VoIP also enables computer-to-computer calls, which are totally free.