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 considerably.

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 computer.

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 video.

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 several.
  • 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 permission.
Copyright © 2004-2005 Evaluseek Publishing.

About the Author
Lucy P. Roberts is a successful freelance writer providing practical information and advice for consumers and businesses about everything related to audio conferencing services and VoIP providers. Her numerous articles include tips for saving both time and money; product reviews and reports; and other valuable insights for persons searching the Internet for information about the history of the telephone and related topics.

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