VoIP is a commonly used term, but it’s still very confusing and difficult to understand for many. In this guide, you’ll find out what it is, how much it costs, how it works, and whether there are any alternatives. We’ll also share our top 5 list of the best VoIP service providers.

What Is VoIP?

VoIP stands for Voice over Internet Protocol. It’s a way of sending audio voice signals over the Internet. When you make a VoIP call, it is transmitted over the Internet, rather than traditional circuits such as PSTN.

PSTN, or Public Switched Telephone Network, dates back to when we first invented telephones. If you wanted to make a call, circuits had to be connected physically. The material these circuits were made of varied. It might be copper telephone wires. Fiber optic cables are a more recent addition.

What makes PSTN unique is that when you make a call, the system creates a dedicated pathway between two endpoints. The pathway won’t become free until the end of the call.  Calls made using PSTN are known as analog calls.

VoIP is different.

How Does VoIP Work?

When a call is transmitted, it travels over the Internet, rather than a physical circuit. VoIP uses a transmission process called “packet switching.” Audio content received by a VoIP device is converted into digital signals.

These signals are then broken into small pieces, known as packets. These little packets are sent through a network of routers. Assembly of the packets takes place when they reach their final destination.

When you’ve set up a VoIP phone system, you can use it to dial anywhere in the world. And you can receive calls from anyone.

Different Types Of VoIP

VoIP technology is very flexible. You can make VoIP calls using a traditional desk phone or mobile phone. It’s also possible to use a desktop computer. If you’ve got a traditional landline phone, you can convert it to a VoIP phone using a converter box.

The VoIP service market is very diverse. You’ll find a range of providers, including:

●   Mobile service providers

●   Phone-based service providers

●   Residential and business service providers

●   Cloud-hosted service providers

●   Software-based service providers 

Mobile Service Providers

VoIP service providers have actively targeted the mobile phone market. Often the services are tied to platforms such as Facebook’s Messenger. There are also stand-alone services such as WhatsApp and Skype. Mobile VoIP uses either a local Wi-Fi network or cellular Internet service for making and receiving calls.

Phone-Based Service Providers

Ooma is a VoIP service provider that sells converter boxes instead of customers paying a monthly service charge. Customers connect the box to the Internet and the phone. Voice calls are digitized and transmitted through the VoIP provider.

Phone-based VoIP service provides uninterrupted phone service. Should there be a power or Internet outage, the converter box routes any calls via the landline.

Residential And Business Service Providers

A residential VoIP service is aimed at households. There are typically just a few lines for each account. It’s not unusual for a cable or ISP company to offer VoIP bundled together with other services.

Other providers allow you to make calls via a converter box. With a converter box, you can make VoIP calls using a traditional phone. The difference is that you make the calls over an existing Internet connection.

A business VoIP service is designed to serve lots of traffic and lots of users. The number of phone numbers ranges from 20 upwards to several thousand. VoIP can be quickly scaled up and down. Another advantage is that there are no international or long-distance call charges.

Cloud-Hosted Service Providers

This is the latest VoIP technology. The VoIP provider hosts all the functions using its servers and hardware. All that’s needed are a few networking components, such as switches and a router and an Internet connection.

A cloud-hosting service might also include intelligent call routing and video conferencing. The provider also takes care of troubleshooting, maintenance, redundancy of services, and a whole lot more. 

Software-Based Service Providers

Google Talk and Skype are software-based VoIP service providers. Often, they form part of a package offered by companies. The service might be a stand-alone desktop program or a web app.

VoIP Phone System Features

VoIP phone systems provide a unique opportunity to use a wide variety of services, aside from just making and receiving calls.

Call Recording

Call recording allows you to record both inbound and outbound calls. If you use it for business purposes, you can link this feature to your CRM system and contact records. Being able to listen to sales and support calls allows you to improve the customer experience. It can also help in training and evaluating staff and increase productivity.

Voicemail To Email

If you’ve got a mobile workforce, this feature is priceless. The VoIP system sends recordings or voicemails to a user’s email address. The file can then be downloaded and listened to as many times as necessary.

Custom Hold Music

With a VoIP phone system, you can customize the hold music. You can also make a pre-recorded message. Both reassure callers and improves customer experience.

High-Quality Audio

High-quality audio is possible if you’ve got a strong Internet connection and broader bandwidth. The quality of VoIP easily rivals traditional analog phones.

Multi-Device Access

If you use a VoIP phone system, you get a VoIP number you can access for both inbound and outbound calls. Furthermore, you can use any device—for example, a smartphone, computer, laptop, or tablet.

Intelligent Call Routing

Incoming calls can be routed according to a set of predetermined conditions or rules. These might include the location, users, time of the day, and more. The routing rules are easy to modify if necessary. 

Virtual Receptionist

A virtual receptionist can take messages, direct calls, provide information for customers, manage support and sales inquiries. Customers can interact with the system using voice commands or the keypad. Such a feature makes answer high volumes of calls more efficient.

What Equipment Do You Need?

The most important thing you need is an Internet connection. Aside from that, what you need depends on which VoIP method you’re using.

To use a mobile VoIP service, you’ll need a smartphone. It has to be connected to the Internet and have your chosen app installed.

If you want to use VoIP with a computer, you need a desktop or laptop with an Internet connection. You have to install the right software. A headset or microphone and speakers allow you to talk and listen.

You’ll need a VoIP adapter, a compatible phone, and a router if you want to use a traditional telephone. 

What Are The Benefits Of VoIP?

The number of landline calls being made has plummeted in recent years. Increasing numbers of people are making the switch to VoIP because of its many benefits.


The price of VoIP is much lower if you’ve already got an Internet connection. VoIP service providers don’t lay expensive telephone lines. Voice calls travel over the Internet. The provider makes savings, and they can pass these on to you.

The cost of making a call is also lower. In some cases, the calls are free. You can also make calls to anywhere in the world at much lower rates than a landline.


There is no hardware to rely on. No lines have to be laid. You don’t need to be a technical whiz kid. Installation is easy and you configure it via a line connecting to your computer and power source.

You can make calls via the computer using a loudspeaker, headset, or VoIP telephone handset. Alternatively, make calls using the same number with an app on your mobile phone. Updates take place with just a few simple clicks. And there’s no need to buy any new software or hardware. 


You can take your VoIP service with you wherever you go. If you’ve got a VoIP app on your phone, you can make and receive calls on the go.

Extra Features

There’s a lot of add on technology to take advantage of with a VoIP service. Added features include three-way calling, caller ID, call forwarding, video and electronic messaging. 

Moving A House Is Easy

Changing telephone providers can be complicated with a traditional landline. This problem is removed with VoIP. Your service is not connected to a particular residence, line, or device.

VoIP Is The Future

Many people consider VoIP to be the future of telephone communication. Traditional PSTN is viewed as a legacy product, while VoIP is becoming common in many homes.

The Benefits Of VoIP For Your Business

VoIP has a lot to offer your business as well. Let’s look at some of the most common reasons for your business to invest in VoIP.


Less hardware is needed, which means lower costs for installing and maintenance. A traditional landline has a limited number of available lines, which makes it expensive. There is no such limit with VoIP. Therefore, it’s much cheaper.


VoIP is very reliable even when your Internet is down. Call forwarding options means you never have to be out of touch. Similarly, hardware and power outages or weather interference are never a problem.


VoIP makes conference calling easy. There’s no need to pay for additional connectivity or hardware costs. You can invite as many people as your Internet allows.


VoIP is especially handy for remote working. A remote team member can stay in touch wherever they are in the world, as long as they’ve got a smartphone.

Sales Growth

You can use VoIP for sales training. Feedback can be tailored in one-to-one meetings, even if team members are working remotely.

Customer Service Efficiency

You can use VoIP to great effect as part of your customer service processes. You can use call recording if you want to train your team. It allows you to listen for frequently asked questions. In turn, you can use these questions to improve your knowledge base.

How Much Does VoIP Cost?

Cost is an essential factor when deciding whether to make the switch. How much you have to pay depends on your VoIP provider. Generally, providers have two costs. The cost is split between your line rental fee and the price for using the service.

The monthly fee allows you to access the VoIP service. You may have to pay additional charges depending on how much you use the service.

Your VoIP provider might offer call packages. The package might give you unlimited calls for a monthly fee. Or you could get a certain number of minutes. You might have to pay additional fees for the advanced services you use. These services might include call recording, call me now, or conference calling.

Actual costs depend on the provider. But you can expect to pay between $20 and $40 per user per month. Total cost also depends on the number of users, network enhancements, and one-time hardware costs. VoIP hardware also varies. A VoIP headset costs from $40. While a desk phone starts at $80.  

The Downsides Of VoIP

VoIP is a very efficient communication service. It is also very affordable for business and residential customers. However, it does have a few drawbacks.

The most fundamental drawback is that the service is dependent on Internet connectivity. Your communications are sent over the web. Therefore, a reliable Internet connection is crucial.

A traditional landline phone allows emergency calls to be traced to a source. This isn’t the case with VoIP because it was not designed with emergency calling in mind. If you don’t explicitly set up your real call address, there is no way of tracking where your VoIP call is coming from.

There can be an issue with consistency because your bandwidth is used to transmit messages. If your bandwidth is limited, it can lead to a deterioration in voice and call quality.

Our Top 5 VoIP Service Providers

There are many providers to choose from, but to save you some time, we’ve narrowed them down to our top five.


RingCentral can provide VoIP solutions for businesses of all sizes. Their most popular product is the RingCentral Office. It includes features such as call forwarding and handling and auto attendant. A company directory and multiple extensions are also available.


With Line2, you can add a second line to your phone. But that’s not all. It allows you to assign different phone numbers to phones and transfer calls between members of your team.


Intermedia offers a fantastic VoIP service that allows your team members to take their desk phones home.


Mitel boasts some big-name customers, but it has something to offer enterprises of all sizes.


Vonage made its name in home-based VoIP solutions but has recently rebranded itself as a B2B cloud services provider. Service includes the One Vonage platform.

Should You Make The Switch?

VoIP definitely has a lot going for it. Business owners should give it very careful consideration as it can have a significant impact on productivity, customer experience, and communication costs. Homeowners can also benefit from using VoIP services, but it’s really more of a personal choice.

We’ve shared all the essential information, so now you’re in the best position to make an informed choice of your own.

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