The Definitive Guide to a 

VoIP Phone System

The Definitive Guide to a VoIP Phone System

What is VoIP?

VoIP stands for Voice over Internet Protocol. It is also referred to as IP telephony, internet telephony, or internet calling. It's an alternative to a public switched telephone network (PSTN). While it may sound it, a VoIP phone system is not complicated.
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What is VoIP?

At the simplest level, a VoIP phone system is a way of transmitting voice calls over IP networks. It is a means of making phone calls using an internet connection, rather than making a call using a landline. Recent advancements and improvements are fast making it the standard means of communication for businesses that want a reliable and future-proof means of communication. Modern, top-level VoIP is now consistent and dependable.

What VoIP represents is a low cost and hassle-free telecoms option to suit all types of firm. Adopting this type of telephone system allows a business to reduce or remove a variety of costs that are associated with traditional business communications. Call charges are often much lower, and firms don't need to pay for multiple phone lines or lots of hardware.

A VoIP phone system is a communications option that you can't afford to overlook. Before you go any further, though, you'll rightly want to know exactly how it all works.

How Does a VoIP Phone System Work?

With a regular phone call a specific physical path is provided by a service provider (usually a dedicated phone company). That path goes between yourself and the number that you call. That system also utilises the traditional telephony infrastructure, which means the network of phone lines crossing the country.


With a VoIP service, calls are transmitted differently. The audio at your end of a call (your voice) is converted into digital packets. It's easiest to think of them as being like envelopes of data, in the same way as traditional envelopes contain what you've written.


The conversion of audio voice signals into digital packets is handled by what is known as 'codecs'. Codecs can be either hardware devices or software-based processes. They compress the voice signals and then encode them as digital signals. To continue our analogy, they take what you say and pop it into the digital envelopes.

How does a VoIP phone system work?

The data packets are then transmitted via IP. This can be either across a Local Area Network (LAN) or online. They're often transmitted via the Real-Time Transport Protocol (RTP). Or, if not, via the Secure Real-Time Transport Protocol (SRTP). The latter is simply an encrypted version of the former. This stage of the process is like a postman picking up your envelopes and taking them to the destination.


The data packets reach their destination almost instantly. They then need to be decoded and decompressed. This is handled by codecs. They take the digital data and convert it back to audio signals. The recipient of your call heard your voice as they would down a normal phone line. The codecs at their end of the transmission open the envelopes for them to read.


Away from the technicalities, the process of making a VoIP call doesn't have to be much different to a standard phone call. To make the calls, you can either use hardware or a software-based VoIP phone.

The former is very much like a traditional desk phone or handset. It will look almost identical and can be used in all the same ways. That doesn't only mean making calls. Most VoIP phones also let you use voicemail, make internal calls, employ call routing systems or auto-attendants, and call transfer tasks. Some even have screens, allowing for video conferencing. If no one told you, you might not know you weren't using a traditional telephone.


Software-based VoIP phones are often called 'softphones'. They're apps or programs installed on a mobile phone or computer. The interfaces of those apps or programs replace a traditional phone handset. They're often designed to look similar and can be used either via a touchscreen or keyboard. Calls through these phones typically use a headset and microphone. They can also use a computer's built-in microphone and speakers.

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Top Technical VoIP Terms

If you do look to update your business communications system, you’ll be faced with a mountain of jargon. Telecoms is a technical field, and as such it has its own lexicon. You might have even spotted a few technical terms in this guide already. To make sure you know where you stand, let’s define and explain as many as we can.

The following glossary covers the most common words, acronyms, and phrases you may come across. It is related both to VoIP services and to the traditional alternatives which it can replace.


The capacity of a network to transmit data from one point to another in a given time period. It is often measured in 1000 bits per second (kbps). The higher the amount of available bandwidth, the more VoIP calls a network can support. If your internet connection has very limited bandwidth, the quality of a call will be lower. 


Codecs can be either hardware devices or software-based processes. They’re used to compress, encode and decompress data. In the case of VoIP, codecs convert audio voice signals into digital data packets. They then compress these digital signals for transmission and re-convert it at the ‘other end’ of a call.


DSL stands for ‘Digital Subscriber Line’. It refers to the traditional phone technology that lets a broadband connection be carried over existing phone lines. All the while still allowing analogue phone signals to travel along the same copper lines.


The 'IP' in 'voice over IP' is an acronym which is short for Internet Protocol. The IP provides a standard set of rules for transmitting and receiving data online. These standardised rules let devices running on different platforms communicate with one another. The IP also provides basic rules for transmitting packets of data. It does not establish the connection for doing so or order the packets being transmitted. That’s handled by transmission or transport protocols.


IVR or Interactive Voice Response is a feature of traditional telephony. It’s the interactive service that lets callers use menus and handles call forwarding and call transfers - basically, an upgraded version of an auto-attendant. Think ‘press one for the accounts department’ etc.


The time taken for the transmission of data. The higher the latency, the greater the delay between the start of a transmission and data being received at the other end. High latency can be an issue for VoIP - especially if you're using it for video conferencing calls. Voice delay is noticeable with a latency above around 150 milliseconds. Considerably more than that and a conversation will be difficult.


PBX stands for Private Branch Exchange. It’s the name given to a private telephone network used within a business or organisation. It’s your PBX which lets you press a button on a desk phone to reach someone else in your office. 


The Real Time Transport Protocol. An internet protocol that often transmits the data packets related to VoIP calls. It also carries audio or video streams for other forms of multimedia communication. Secure Real Time Transport Protocol – The encrypted (and so, secure) variant of the RTP.

SIP Trunking

A way of delivering voice communication over the internet. It’s in many ways an alternative to VoIP. It typically involves connecting a PBX to the internet. This gives added control to a user but does require a fair bit more equipment to get up and running than a VoIP phone system.


The name given to software or apps used to make VoIP calls. In the case that you use your computer, mobile device, or tablet and not a VoIP phone. Most ‘softphones’ have an interface that looks like a phone handset when it appears on your screen. It will have a keypad, display and be workable via touchscreen or computer keyboard.


Voice over Internet Protocol is the technology that lets you make voice calls via an internet connection. Audio is repackaged as digital data and transmitted to its destination almost instantly. It’s becoming a new business communications standard for firms of all shapes and sizes.

VoIP Advantages

It is still a relatively new technology. The idea has been around for a while, but refinements and improvements are still ongoing. Those improvements – together with advances in internet connections – are key. They make VoIP more relevant today than ever before and the system has developed to the point that its advantages significantly outweigh its drawbacks.


The many advantages detailed above are what persuade many firms to adopt VoIP solutions. There are two ways in which to do so and then two main types of setup that can be used within an office. The initial choice a firm must make is whether to go for a cloud phone system or keep things in-house.


With the cloud-based option, you pay a monthly fee and download a mobile app or some software to get the system up and running. Additional technical tasks are handled by your provider at their data centre.


Some firms feel they want greater control over their system, perhaps to integrate it with a pre-existing unified communications setup. They keep all related physical servers on-site in order to get that control. That means they also incur higher costs. They need more hardware, have to maintain it, and are in charge of their own tech support.


Whether you opt for cloud-based adoption or otherwise, there are two types of VoIP setup to choose from. 

Examples of VoIP phone systems for businesses

Phone Through Computer

The first option for any firm is to handle their telephone calls through office computers. You can turn any computer into a VoIP phone through the download of some simple software. That software is often referred to as a softphone.


Every softphone is different, but their appearance is fairly similar. They’re often designed with an interface which resembles a traditional phone handset. When a user opens the softphone, they’ll see a representation of a keypad and screen. They’ll then be able to use the interface just like a phone, usually with the help of a headset and microphone.


The second option is even simpler. IP phones can be installed in an office, in the same way as traditional desk phones. The phones look almost exactly the same as those standard desk phones. The only difference is how they're connected with most being linked up by just a single Ethernet connection. If you want a cordless connection, then you'd need to find an IP phone that supports Wi-Fi or Bluetooth connections.


A VoIP phone can be used in the same way as any office phone. That includes the ability to use voicemail, call recording, caller ID, and other similar features. In terms of operation, a VoIP phone works just like any other. A user who doesn’t know about the technology behind it may not realise there’s anything different. 

“RingCentral is just easy, easy, easy. I think I had 95% of the system for our entire company set up in about 10 minutes.”
— James Trazzera,
General Manager, Intranet Technica

How to Switch

That’s everything you need to know about VoIP. It’s a technological advance that’s changing the face of commercial telecoms. With VoIP, firms are now able to make and receive voice calls using their internet connection.


Being able to make calls that way delivers a raft of potential benefits. Businesses can drastically reduce costs in a variety of areas. Initial hardware and setup expenses are often much lower. Call charges, too, can be a lot lower. That’s in addition to the added accessibility and agility which a VoIP system provides. 

All of that may have been enough to convince you that VoIP is the way to go. If so, you’ll be wondering how to switch to the more modern system from your existing phone service. Another advantage is that it’s easy to do so. Your first step is always to contact a trustworthy provider who can talk you through the rest of the process.


From there, you to decide whether to go with cloud-based or physical server setup. Then, you must choose if you want a VoIP phone system or software-based VoIP calls using your office computers. Whatever your decision, the setup process is much simpler and swifter than setting up a traditional system.  


  • There are no real minimum technical requirements to adopt VoIP. If your premises have an internet connection, you’ll be able to switch. It will help if that internet connection has higher bandwidth and lower latency. That way, call quality will be higher.
  • Most VoIP providers allow you to keep your existing number when you switch. One of the critical advantages of the VoIP phone system is that you can make and receive calls using the same phone number from multiple locations.
  • If you’re going to use physical handsets for VoIP calls, they have to be compatible with the technology. It’s not a given that your current handsets won’t be. If you find that they’re not, however, you will need new ones.
  • Quality of service has improved massively in recent years. In many cases, VoIP calls sound just like traditional phone calls. The only thing that does have a big impact on quality is the standard of your internet connection. You can suffer call breakup and lower voice quality if the latency of your connection is high.
  • Yes. In fact, in many ways, VoIP is more reliable – as long as your internet connection is stable. Traditional telephony systems can be easily compromised by damage to phone lines and other elements outside of your control. 
  • To the actual caller and the recipient, a VoIP call is just like a normal call. You don’t have to do anything different to make calls. If you use physical VoIP phones, a caller may not even know they’re not making a normal call.   

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