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What is VoIP and how does it work?

Published in Voice over IP

VoIP is an acronym for Voice over Internet Protocol, short for Voice over IP or calling over the Internet. This protocol uses the Internet to make phone calls instead of using traditional phone lines.

This new form of telephony is called VoIP telephony and is now the most widely used form of business telephony.

With this form of telephony, there is no need for a physical PBX, as the phones use this protocol to register with your business telephony provider's VoIP PBX in the data centre.

The phone number on which your company can be reached and on which you can receive incoming calls is also registered on this online VoIP switchboard. The phone number has become a VoIP number, a virtual number. It is no longer associated with a physical location. VoIP telephony has become the new standard in business telephony.

History and evolution of VoIP

IP telephony requires two technologies: the telephone and the Internet. The first telephones were used in the 1970s. The first version of the Internet was created in 1969, but it was not until 1993 that it became widely available to individuals.

In 1995, VoIP was made possible by the Israeli company Vocaltec, Inc. All callers needed a microphone and speakers, which were not standard on PCs at the time. But being able to call and chat with each other via voice over the computer was new, and internet users invested in a microphone and speaker. Chat clients such as Skype, ICQ and the aforementioned Vocaltec emerged.

With the microphone and loudspeaker or headset, a new kind of telephone had been created. And you could make unlimited free calls to your distant cousin in Australia via VoIP.

By 1998, solutions for calling from PC to phone and vice versa were on the market. Now you could not only call someone who had the same software installed on their computer, but also someone who still had an old-fashioned phone.

The internet and the regular phone network were connected. If you used a client like Skype to make a call to another Skype client, it was free. If you used Skype to call someone with a regular phone number, and that part of the call went through the phone network rather than the Internet, you were charged a few cents. So VoIP telephony slowly emerged and the first VoIP telephony platforms were born.

In 2000, IP telephony accounted for 3% of all phone calls, while in 2003, VoIP calls accounted for 25% of all calls. It grew rapidly as consumers began to make expensive intercontinental calls via Skype and ICQ, and international telecom operators began to handle their call minutes via Internet data connections, making huge savings: after all, they could now choose which routes and networks to use to handle a call between Amsterdam and New York!

The infrastructure also became much simpler: data, VoiP calls, chat, video all ran over the same connection, so there was no need to install a separate phone line. There was a new subscription with unlimited calls and tariffs based on the number of users for a fixed amount per month including functionalities.

Multinational companies were quick to recognise this important advantage and switched from fixed ISDN telephony to VoIP at the beginning of the 21st century, saying goodbye to telephone lines. This also paved the way for outsourcing to call centres abroad. In 2000, Belfabriek was established in the Netherlands to focus on telephone numbers and VoIP telephony.

How does VoIP work?

To send voice over a data network, the voice needs to be converted into small data packets and compressed. This is done by the caller's VoIP phone. During the call, these audio packets are sent one at a time. When they arrive at their destination, they are 'unpacked' by the recipient's VoIP phone and the voice is audible again. Your provider's VoIP PBX takes care of all this and adds various telephony features that you might want in your office, such as a selection menu or a waiting queue.

Why VoIP calling is right for your business

In addition to a more manageable infrastructure and the lower costs mentioned above, Internet telephony offers a number of important benefits for SMEs:

  • Integrate services
    When voice is over the Internet, it is easier to integrate services together with mobile telephony. Think, for example, of video conferencing or document sharing. Sharing databases, calendars and phone books also becomes possible. For many companies, this benefit is even more attractive than the price advantage.

  • You become location independent
    With traditional fixed-line telephony, your fixed-line number is tied to a specific physical location and a fixed-line phone. If you move to another building in another city, your number does not automatically move with you. With IP telephony, you can move as often as you like: you connect the VoIP phone to an internet connection anywhere and it connects to our online VoIP switchboard.

    This is also useful if you or colleagues want to work from home or create a virtual team to answer incoming calls. We have great solutions for this with optimal call quality.

  • High sound quality
    A VoIP connection has no noise because it is completely digital. The software chooses the compression according to the bandwidth: low compression for a high bandwidth, where the sound quality is at its best, or high compression, where the sound quality is comparable to that of a mobile phone.

    All countries in the EU now have high-speed Internet connections that make Voice over IP quality sublime.

  • Always available
    With old traditional telephony, all kinds of elements in the connection can throw a spanner in the works, for example the company switchboard, the telephone cable or the district exchange. VoIP stands for better reliability.

We offer great hosted VoIP telephony solutions for smart small and large enterprises. Want to know more about cloud telephony or want a new business phone number, contact us or register your own phone number right away !

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