Voice over Internet Protocol (VoIP)

What is VoIP?

You've probably noticed this acronym widely used in trade publications, the press or on web sites for Telecommunications or IT companies. You may have heard it referred to in different guises such as; IP telephony, Voice over Broadband, IP Centrex, IP Trunking, VoIP VPN, IP Pbx or IP key systems. In fact, all of these terms are referring to a revolutionary technology that is rapidly changing the face of telecommunications.

VoIP stands for Voice over Internet Protocol. It is a technical term for what is actually a straightforward process of making telephone calls over the internet. In basic terms, voice, or analogue sounds, are translated into data and transmitted across an internet connection or network - just like any other file or email you might send. Once the data reaches its destination (for example a landline, mobile or IP phone) it is translated back into its original form and emerges like a regular phone call. This process is of course instantaneous and seamless.

VoIP has increased in popularity in recent years and is now seen as a truly viable and cost saving alternative to making phone calls on a traditional landline. Cost savings make VoIP an attractive proposition - reduced telephony costs can be achieved in a number of different ways such as; lower (or free) call charges, lower Broadband bandwidth requirements, reduced infrastructure costs and numbering flexibility.

How does VoIP work?

Just as a modem converts digital signals from the PC into analogue (voice) traffic for transmission over a phone line, a VoIP-enabled phone or VoIP adaptor converts your voice into digital packets (using the SIP protocol) for transmission over the internet. If you make a call to another VoIP phone, the opposite process occurs at the other end, and your voice emerges intact from the ether. If you make a call to a mobile or landline, your VoIP providers gateway decodes the call and sends it on as an ordinary voice call to the telephone exchange (PSTN).

VoIP works by first converting your analogue voice into digital format (1 and 0), cutting the digital signals into packets, sending them over your existing data network and reconverting them to voice at the destination. The benefit of a digital format is that it can be controlled. It can be routed, modified, condensed, expanded and saved. Digital signals are also more noise tolerant than analogue.

Step by step call process:

  • Caller picks up the phone and hears a dial tone;
  • Caller dials a number, which is mapped to an IP address of the recipient;
  • Call setup protocols are invoked to locate the recipient and send a signal to produce a ring;
  • Destination phone rings;
  • The caller answers the phone, starting a two way conversation;
  • Audio transmission is encoded, travels over IP network and is decoded;
  • Conversations end, call disconnect occurs and billing is performed.

What are the benefits of VoIP?

Cost savings make VoIP an attractive proposition, reduced telephony, equipment and infrastructure costs can be achieved in several ways:

Cost savings through reduced bandwidth or capacity

Arguably, the most important fact about VoIP is that it uses broadband or a DSL to carry digital signals and that the carrying capacity of this connection is much higher than that of a traditional telephone line.

In the past, connecting one phone line would give you one phone connection, using VoIP will give you as many lines as your bandwidth can support. With VoIP, voice data is compressed, converted to packets of information, and transmitted over a computer network. This means VoIP, with its virtual circuits, makes more effective use of available network bandwidth. Making telephone calls using VoIP therefore, uses substantially less bandwidth than a traditional call and is consequently more cost effective.

To ensure the optimum performance, it is important to assess your requirements carefully, make clear how many extensions you will need and to clarify whether or not you need to increase your bandwidth to facilitate them. As a result you will be paying less in line rentals and PBX maintenance costs with VoIP.

Cost savings through lower call charges

Calls made via VoIP are cheaper than standard telephone calls and can even be free of charge. When a VoIP call is made between two branch offices via the Internet or Intranet, for example, the call will be free.

Another example is when a VoIP call is made to an international destination. The call is routed over the Internet for most of the journey. It will usually only return to the public telephone network (PSTN) when the call reaches the destination country. In this case, the long distance toll charge is bypassed and the call charge will be substantially lower than a standard telephone call.

Simplified Infrastructure

Using VoIP services and combining your voice and data networks also provides further cost savings and ensures greater network efficiency.

Not only does having one network for voice and data provide greater efficiency and reduce infrastructure investment, but it also means voice technologies, data and computer applications can be linked which helps to streamline and simplify the working environment.

Easier moves and changes

Moves and changes can be easily implemented using VoIP software, often resulting in reduced administration costs.

Lower cost of expansion

VoIP is more scalable than traditional telephone networks which are geographically restricted by their circuit switches, with a switch required for each service area. With VoIP technology, a soft switch can be installed at the regional level, allowing multiple markets to utilise it, with only limited equipment required locally.

Will my organisation benefit from VoIP?

The advantages of VoIP will be of particular benefit to the following types of organisation:

Multi Sited (+Home workers)

Businesses with several employees, especially those with distributed offices and home-workers, are likely to get the maximum benefit from VoIP.

Business telephony costs are significantly reduced; all calls to other VoIP phone users are free and other calls are competitively priced.

You can configure your system in many ways; it can be tailored to the particular requirements of your company and your customer base. For example, if you have associates or employees in other areas of the UK or even abroad, you may wish to give them all extensions on the same number, or their own numbers with the same area code as your head office. Alternatively, you may choose to have numbers with different geographic codes to indicate a wider geographic spread.

Companies with international branches and/or staff

With significant social and environmental pressures to reduce physical travel, business 'meetings' are increasingly conducted remotely. Technology offers a multitude of options, from; voice and video conferencing and calling, web collaboration, whiteboard, Instant Messaging, IM Chat, Broadcast to meet me conferencing.

Call costs are also significantly reduced using VoIP to call an international destination. The call is routed over the Internet for most of the journey. It will usually only return to the public telephone network (PSTN) when the call reaches the destination country. In this case, the long distance toll charge is bypassed and the call charge will be substantially lower than a standard telephone call.

Companies with international clients

As above, call costs are significantly reduced using VoIP to call an international destination. The call is routed over the Internet for most of the journey. It will usually only return to the public telephone network (PSTN) when the call reaches the destination country. In this case, the long distance toll charge is bypassed and the call charge will be substantially lower than a standard telephone call.

VoIP Services - An overview

VOIP (Voice over Internet Protocol) is a generic term as is IPT (internet protocol telephony) as is SIP (Session Initiation Protocol) & H323 (the protocol enablers). A broad overview of the various services using VoIP is detailed below.

Voice over Broadband

There are various consumer orientated VoIP services which provide free or low cost voice calling, either through a telephone-like program on the computer, or through a special adaptor which connects to a home broadband service. These services include those offered by BT Communicator, Skype, FreeTalk (Dixons Group) and Vonage.

Consumer VoIP services are ideal for making low cost calls to the public telephony network and many of them offer consumers excellent deals on calls, including unlimited UK calls and low cost international calling. They will also offer the ability to call other users within the "service" for free. For example, one Skype customer can call another Skype customer at no cost.

The downside of such a service is that, whilst typically orientated around a software program on the users' computer, they are less intuitive to use than a regular telephone and if the computer process is busy then sound quality can suffer. Additionally, it is important to ensure the software is used with a good quality headset, rather than a microphone and speakers, as otherwise the sound can become distorted with feedback and background noise.

IP Key System

These replace traditional Key Systems.

IP Trunking

IP trunking is similar to Voice over Broadband - but where the WWW is replaced with dedicated bandwidth and a level of quality of service. The various versions of this service are; Geo numbers only, non geo only or a combination of the two. Further variants will depend on a number of parameters such as; Is a "999" database (PATS compliancy) required, is CLI recognition needed, is it required for inbound and/ or outbound.

VoIP Virtual Private Network

This service is usually known as an MPLS, IPVPN - where offices are linked together using leased lines and Dedicated Internet Access - with features such as Quality of Service and Disaster recovery. The priority order of traffic over the network is determined by the requirements of the customer, for example: Voice, video, email, data/applications.

IP Centrex

With a Centrex solution, effectively the functionality of the PBX is held in the Network. Each user has a "seat" or "licence" to use it, and has software installed on their laptop or desktop (Softphone) and/ or a traditional looking handset, (This can be either basic or windows based). A headset may also be used. Users can be located anywhere in the world and can receive calls to their published number wherever they can access the internet. Numerous features are built in to the service, for example; Voicemail (integrated with Outlook), central dial plans, voicemail to email, efax, follow me, web conferencing or presence.

The main considerations of IP Centrex are that each user has a licence, unlike traditional PBXs where there are so many bodies per line installed. In addition, to ensure no corruption it is usual to install an exclusive DSL for voice use with recommendations as to the size of the connection per X (pre-determined) number of users at a site and a LAN that is up to date and managed effectively.

The main benefits of this service are speed of deployment and user flexibility.


There are 744,163 UK companies with existing PBX systems with more than 100 extensions and 690,108 with systems with less than 100 extensions (as at Jan08). This is a strong growth area with many new suppliers coming into the market with IP-only offerings.

Hosted IP

PBX applications deliver a suite of PBX functionality over any IP connection plus other enhanced services such as contact centres, conferencing, voice, video and faxmail as well as mobile integration.

Frequently asked Questions

What are VoIP protocols?

Voice over IP (VoIP) uses the Internet Protocol (IP) to transmit voice as packets over an IP network. Using VoIP protocols, voice communications can be achieved on any IP network regardless of whether it is Internet, Intranets or Local Area Networks (LAN). In a VoIP enabled network, the voice signal is digitised, compressed and converted to IP packets and then transmitted over the IP network. VoIP signalling protocols are used to set up and tear down calls, carry information required to locate users and negotiate capabilities. The key benefits of Internet telephony (Voice over IP) are; their very low costs, the integration of data, voice and video on one network, the new services created on the converged network and simplified management of end user and terminals.

There are a number of protocols that may be employed in order to provide for VoIP communication services. Some of the most common ones are listed below:

  • H323
  • SIP

What is H323?

H323 is the ITU Telecommunications Standardisation Sector (ITU-T) umbrella standard, which was originally developed for multimedia conferencing on LANs but was later extended to cover Voice over IP. The standard encompasses both point to point communications and multipoint conferences. H323 defines four logical components: Terminals, Gateways, Gatekeepers and Multipoint Control Units (MCUs). Terminals, gateways and MCUs are known as endpoints.

What is SIP?

Session Initiation Protocol (SIP) is the next logical step in the evolution of voice communications; routing voice calls over the internet (Voice over Internet Protocol or VOIP) providing a feature rich and cost effective service.

SIP is a signaling protocol, widely used for setting up communications sessions. A session could range from a simple telephone call to a multi media conference call over the Internet. Other application examples include; video conferencing, streaming multimedia distribution, instant messaging, presence information and online games. In November 2000, SIP was accepted as a 3GPP signaling protocol and permanent element of the IMS architecture for IP-based streaming multimedia services in cellular systems.

SIP provides a signalling and call setup protocol for IP-based communications that can support a superset of the call processing functions and features present in the public switched telephone network (PSTN). SIP itself does not define these features; rather, its focus is call-setup and signalling. However, SIP has been designed to enable the building of such features in network elements known as Proxy Servers and User Agents. These are features that permit familiar telephone-like operations: dialling a number, causing a phone to ring, hearing ring back tones or a busy signal. Implementation and terminology are different in the SIP world but to the end-user, the behaviour is very similar to standard telephony.

What is a VoIP Gateway?

A gateway is a device or software programme that provides a proxy or intermediary between two systems with incompatible technologies.

One type of gateways is a SIP to PSTN gateway that is normally used to route the SIP calls to PSTN or vice versa. This will allow calls made from an IP device, such as an IP phones or IP PBX, to be routed to PSTN. This type of gateway serves as an interfacing medium between SIP and PSTN. SIP is one of the most commonly used protocols for VoIP calls.

Other types of gateways can be used to interface between analogue phones or other analogue devices to VoIP networks.

What is a Gatekeeper?

A gatekeeper is a term used in H.323 networks. A gatekeeper is a device which is responsible for handling the registration and authentication of devices. A gatekeeper registers all the SIP devices in its database and keeps a record of it. The main difference between a gateway and a gatekeeper is that a gateway does not handle registration and authentication of devices.

What are the Key components of a VoIP network?

The Key components of a VoIP network are:

  • IP phones
  • Gateways(Gatekeeper)
  • SIP Proxy / Registrar (IP PBX)
  • Internet and PSTN, and/or
  • SIP Trunk

What equipment will I need to make a VoIP call?

To make VoIP calls, you need one or more of the following devices.

  • IP Phones (or)
  • VoIP enabled telephones
  • Gateways
  • ATA (Analogue telephone adapters)
  • Connections to an ITSP or to a SIP Proxy.

What are IP Phones?

IP Phones - These specialised phones look just like normal phones with a handset, cradle and buttons. But instead of having the standard RJ-11 phone connectors, IP phones have a RJ-45 Ethernet connector. IP phones connect directly to your router and have all the hardware and software necessary right onboard to handle the IP call.

What is an ATA?

ATA (analogue telephone adaptor) allows you to connect a standard phone to your computer or your Internet connection for use with VoIP. The ATA is an analogue-to-digital converter, taking the analogue signal from your traditional phone and converting it into digital data for transmission over the Internet.

What about Call Quality?

Using Broadband, the call quality is usually good. If you have sufficient bandwidth to operate the service correctly, you will experience excellent call quality. A good rule of thumb is that you can have 4 concurrent calls per broadband line.

If you have a large office in an area that is served well by broadband services then you might consider services such as a leased line or SDSL, which can be very cost effective in metropolitan areas.

Will my VoIP phone work if the power fails?

Ordinary phones do not need a separate power connection, but as VoIP relies on your internet connection, if your broadband router has no power, your phone won't work either. We recommend in all instances that at least one analogue line is retained for resilience.

Can I call the emergency services using VoIP?

You can call almost all numbers as you would from a regular phone including 999/112 emergency numbers.

What type of numbers can I use for VoIP?

You can have any geographically located number with area code beginning 01 or 02. If you want to choose your own memorable number you might be charged a small premium otherwise you will be provided with a number in your chosen area. You can also use non geographic numbers such as 0844, 0845 and 0800 numbers.

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