VoIP converts voice telephone calls to packets of data that can be transmitted across the internet or other data networks. The simplest type of VoIP services, such as instant messaging, allows two people to talk to each free of charge using their computers and the internet. Nothing else is need except a microphone and speakers.
PC to Phone services also allow free calls between different PC's as well as being able to make paid calls to traditional phones and mobile/cell phones. These services have been around for about 10 years and require special phone software to be downloaded to the computer. Although there are many providers of these services, many users their own bespoke software preventing easy use between PC's not having the same software and limiting the availability of hardware devices compatible with these services.
The earliest PC to Phone operations used a protocol called H323 but in the last 5 years a technology called SIP has become the predominant protocol for most operators. Using SIP provides many benefits to users since most of the hardware and software is open source making it relatively easy to switch providers at a consumer level. Certain well know PC to Phone companies use Peer to Peer software, using the users PC's and bandwidth as part of the processing network.
When making calls from a PC or VoIP device to a traditional phone or mobile/cell phone, only part of the call is via VoIP and therefore cost free. The first part of the call from the calling device to the VoIP Providers own equipment is carried over the internet. Once at the VoIP Providers own equipment the calls are converted back to traditional telephone calls and then transmitted to the end telephone just like any other call.
So if the call is terminated just like any other call why is VoIP cheaper than traditional telephones? There are several reasons why VoIP calls to traditional phones are cheaper:
Using VoIP enables the VoIP Provider to effectively move the calls from high cost areas to countries where the cost of making calls is much cheaper. For instance, international calls generally from the Middle East are expensive compared to calls from Europe and North America, so using VoIP to transfer the call to these lower cost countries enable the VoIP Provider to offer calls at a lower cost than the main telephone providers in these countries
Some VoIP Providers, particularly consumer focused ones, use lower quality carriers to terminate calls, as may also be the case with traditional cheap calling phone cards. Using these services may requires many more call attempts before successfully connecting a call; poorer voice quality and calls often being unexpectedly terminated. For consumers in such areas as the Middle East, the savings these services offers far out ways the lower quality that may be achieved.
For business users, the use of SIP trunks can provide significant cost savings on line rental since SIP trunks can allow multiple calls to be made without the need for additional telephone lines or ISDN channels.
Free calls can be made between locations that are on the same VoIP network allowing business users the ability to integrate several offices or remote workers into their office network
VoIP office telephone systems provide a very cost effective solution for most businesses, providing high levels of functionality at highly competitive prices.
VoIP Providers such as V4B can provide number portability allowing business customers to move location and retain their existing telephone numbers; even when their move is outside the area for the telephone code.
VoIP uses the internet or other data networks and does not require the same level of capital investment or infrastructure as traditional telephone systems. This reduces the overheads and costs of the VoIP Providers, allowing them to provide service at a lower costs than the traditional telephone providers.
Since VoIP converts calls to data, this provides the opportunity for even greater benefits such as integration of databases with a VoIP telephone system, single networks for both data and voice and the ability to have calls answered anywhere in the world.