Voice over Internet Protocol, also called VoIP, IP Telephony, and Internet telephony, is technology enabling routing of voice conversations over the Internet or any other IP network. In short, you can place a VoIP call using a phone with an adapter, hearing a dial tone and dialing just as you always have. VoIP also allows you to make telephone calls using your computer over a data network - like the Internet. VoIP converts the voice signal from your telephone into a digital signal that travels over the internet then converts it back at the other end so you can speak to anyone with a regular phone number.Voice data flows over a general-purpose packet-switched network, instead of the traditional dedicated, circuit-switched telephone lines.

So how would one place a VoIP call? Depending on your service provider, one way to place a VoIP call is to pick up your phone and dial the number, using an adaptor that connects to your existing high-speed Internet connection. The call goes through your local telephone company to a VoIP provider. The phone call goes over the Internet to the called party's local telephone company for the completion of the call. Another way is to utilize a microphone headset plugged into your computer. The number is placed using the keyboard and is routed through your cable modem.

This arrangement has several advantages over traditional telephony:
Because VoIP is digital, it may offer features and services that are not common with a your average phone. Since you would be using your broadband connection, you are spared the expense of maintaining an additional line into your home or office. An additional feature is that Voice over IP traffic may be deployed on any IP network, including ones lacking an internet connection, such as a building-wide LAN without an internet connection.

Corporate and telco use of VoIP

Although few office environments and even fewer homes use a pure VoIP infrastructure, telecommunications providers routinely use IP telephony, often over a dedicated IP network, to connect switching stations, converting voice signals to IP packets and back. The result is a data-abstracted digital network which the provider can easily upgrade and use for multiple purposes. Corporate customer telephone support often use IP telephony exclusively to take advantage of the data abstraction. The benefit of using this technology is the need for only one class of circuit connection and better bandwidth use. IP telephony is commonly used to route traffic starting and ending at conventional PSTN (Public Switched Telephone Network) telephones. VoIP is widely employed by carriers, especially for international telephone calls. Electronic Numbering (Enum) uses standard phone numbers (E.164), but allows connections entirely over the Internet. If the other party uses Enum, the only expense is the Internet connection. Companies can acquire their own gateways, eliminating third-party costs - worthwhile in some situations.
Implementation challenges

Because IP does not provide any mechanism to ensure that data packets are delivered in sequential order, or provide any Quality of Service guarantees, VoIP implementations may face problems dealing with latency and data integrity. A central challenge for VoIP implementers is restructuring streams of received IP packets, which can come in any order and have packets missing, to ensure that the ensuing audio stream maintains a proper time consistency. To help with this, the network provider can ensure that there is enough end-to-end bandwidth to guarantee low-latency, high quality voice. This is trivial in private networks, but very difficult with less than 256 kbit/s bandwith without a fragmentation mechanism.

A new development has been the introduction of mass-market VoIP services over broadband Internet access services, in which subscribers make and receive calls as they would over the PSTN. This requires an analog telephone adapter (ATA) to connect a telephone to the broadband Internet connection. Companies in the US, such as 1TouchTone, Broadvoice, Comcast, Verizon, Vonage, VoicePulse, Packet8 and SunRocket, use IP to offer unlimited calling to the US, and sometimes to Canada or to selected countries in Europe or Asia, for a flat monthly fee. One advantage of this is the ability to make and receive calls as one would at home, anywhere in the world, at no extra cost.

As calls go via IP, this does not incur charges as call diversion does via the PSTN, and the called party does not have to pay for the call. For example, somebody may call someone on a number with a US area code, but one could be in London, and if someone were to call another number with that area code, it would be treated as a local call, regardless of where that person is in the world. However, the broadband phone is likely to complement, rather than replace a PSTN line, as it still needs a power supply, while calling the US emergency services number 911, may not automatically be routed to the nearest local emergency dispatch center, or be of any use for subscribers outside the US. Some VoIP providers offer their services for free, normally only for calls to other subscribers to the service. Your VoIP provider may permit you to select an area code different from the area in which you live. This means you may not incur long distance charges if you call a number in your area code regardless of geography. It also means that people who call you may incur long distance charges depending on their area code and service.

Some VoIP providers charge for a long distance call to a number outside your calling area, similar to existing, traditional wireline telephone service. Other VoIP providers permit you to call anywhere at a flat rate for a fixed number of minutes. Depending upon your service, you might be limited only to other subscribers to the service, or you may be able to call any phone number, anywhere in the world. The call can be made to a local number, a mobile phone, to a long distance number, or an international number. You may even utilize the service to speak with more than one person at a time. The person you are calling does not need any special equipment, just a phone. With many VoIP plans you can talk for as long as you want with any person in the world (the requirement is that the other person has an Internet connection). You can also talk with many people at the same time without any additional cost.

If you're considering replacing your traditional telephone service with VoIP, there are some possible differences: