How Does VoIP Work?

This page answers 'how does VoIP work' question briefly and using diagrams. The concept of how VoIP works is easy to understand. You know, we all use different kind of methods to make a VoIP phone calls. Some of us use a laptop/desktop computer while others use a VoIP device such as: ATA (Analog Telephone Adapter), IP phone or other type of devices/systems.

Diagram 1. device to phone VoIP call method - a call from a VoIP device to phone

How VoIP Works... 

Once you initiate a VoIP call the following three scenarios takes place:

1. when we make a phone call - our voice signals are converted to digital packets

2. those packets travel via the Internet until they reach the final destination (called party)

3. at last the packets convert back to voice signals

We don't know or notice that as it is like behind a scene. During the above scenarios #2 and #3 here is what happens:

  • the originated call travels via the Internet to your provider's server / switch
  • your VoIP provider receives the call and bypasses it to a terminator i.e another provider often a LEC (Local Exchange Carrier) at destination
  • the terminator receives the call and delivers it to your desired number

All the above happen at a twinkle-of-eye time speed that we don't even realize. Network professionals call the above voice packetization an encapsulation

How Does VoIP Work Diagrams

Now let's demonstrate the methods using figures...

Diagram 2. PC to PC VoIP basic method when we place a call from a computer to another computer

Diagram 3. PC to Phone - a call from computer to fixed and mobile phones...

➦ Tips!

(i) Take a look at the first and third diagrams... the calls travel through the Internet and finally are terminated to the PSTN. This is known as call termination.

VoIP requirements

To make a VoIP call we need:

1. Internet 

2. VoIP software and/or a hardware 

3. VoIP service provider

1. Internet network, VoIP works with many types of Internet access, such as.. 

  • Dial-up 
  • Broadband DSL/ADSL and Cable Internet 
  • Dedicated lines (DS)
  • Wi-FI and WiMax 


(i) A single VoIP line requires approximately 100 Kbps download and upload speed. You can check how fast your Internet is by visiting VoIP speed test link. The faster connection you have the better voice quality you will enjoy.

(ii) Dial up and Satellite Internet (not recommended due to quality and network latency issues)

2. VoIP software and/or hardware

  • a software application known as a Soft-Phone is a dialer that you download on your computer or laptop. Whenever you make computer based phone calls, you are running a VoIP soft-phone application, Skype for instance.
  • by hardware we mean any VoIP hard phone equipment such as VoIP ATA, VoIP Gateway, IP-Phone and other type. Check VoIP devices link for a list of VoIP hardware.

3. VoIP Phone Service Provider

A VoIP provider, also known as Internet phone company and ITSP (Internet Telephony Service Provider), is a company that provides VoIP phone services and solutions, similar to your local telecom companies. A VoIP providers uses a technology to transmit our data, voice and video packets whereas traditional companies use PSTN lines.

VoIP providers offer different kind of VoIP services; few to mention:

  • VoIP solutions such as International calls (call-shop, call-back and calling cards)
  • VoIP systems such as conferencing, IP PBX, SIP Trunking, UC (Unified Communications)
  • And many more solutions and systems

That's briefly about how does VoIP work frequent asked question. Equipped with the above basic information it should not be difficult to understand and select the type of VoIP service that meets your needs. 

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PC to Phone Calls Explained  
Hi, You may also check how PC to Phone VoIP Calls works in practice. This example is based on Ozeki Phone System XE VoIP PBX. Here's the link PC to …

Click here to write your own.

Related Articles:

VoIP definition 

How does Vonage work?

How to Record Phone Calls

Related Further Reading (external links):

Voice Over Internet Protocol by FCC (Federal Communications Commission)

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