What Is VoIP and Why Could It Benefit Your Company?

Most people have at least heard of VoIP these days, but are still unclear how it works and why it’s beneficial. Here, without getting too technical, we aim to explain the technology behind it.

So, What Does VoIP Stand For?

VoIP is an acronym for Voice over Internet Protocol. You may also hear it referred to as Voice over Broadband (VoB), Networks (VoN) or even Internet Telephony, and these namesare the clue to how it works. In short, it’s communication over the internet. Analog signals, like the human voice, are converted into a digital format and then transmitted to a digital phone, computer or other device, in the same way that any other data is sent over the internet.

How Does VoIP Work?

Traditional phone lines use a method called circuit switching to connect calls. Ringing a customer requires a dedicated connection between you and them, and that line stays open for the duration of the call. No other traffic can use that space while the call is in progress, and you’re billed for the total length of the call, even if neither of you are speaking continuously.

But VoIP employs a method called ‘packet switching’. Data, whether that’s your voice, an email or a webpage, is transferred in packets, and the connection between computers or callers is only open as long as it takes to transfer that information. The data is compressed, so travels faster; and the VoIP network can also choose the least active channel along which to transmit the call or message. In the gaps between, other data can be sent or receivedalong that same line. So there’s a huge increase in available circuit space compared to an analogue phone system.

Why Else Is It Better Than Traditional Phone Lines?

Think ‘VoIP’ and most people think cheaper or even free calls. It’s true, calls do cost less because they’re made via the internet and you have already paid for that service as part of your usual monthly broadband subscription. But the benefits go beyond that:

• VoIP technology opens up a wealth of services that are prohibitively expensive, or even downright impossible, with traditional telecom technology. So without paying more, you can have access to services such as long distance calls for less money, voicemail, call transfers and diverts, call conferencing and music while your callers are on hold, for instance. These kinds of services can help improve customer service, amongst other benefits.
• It also helps businesses improve productivity. Because all that’s needed to take advantage of VoIP technology is a broadband connection, staff can use it anywhere – in the office, working remotely, or even when commuting.
• It’s cheaper and easier to scale up if you need additional phone lines for seasonal increases in calls or if your company grows.
• Maintenance costs are less, because there’s less associated hardware; and VoIP is better able to cope if things go wrong – calls can easily be rerouted to other sites, phones or devices anywhere on your company’s network.

As broadband becomes faster and more reliable, so VoIP becomes the absolute best way of communicating throughout your organisation and with your external stakeholders. Speak to us about transferring to VoIP technology today.