VoIP is an acronym for Voice over Internet Protocol. VoIP is a methodology and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet. Other terms commonly associated with VoIP are IP telephony, Internet telephony, voice over broadband (VoBB), broadband telephony, IP communications, and broadband phone service.
VoIP is Replacing Public Switched Telephone Network (PSTN)
The term Internet telephony specifically refers to the provisioning of communications services (voice, fax, SMS, voice-messaging) over the public Internet, rather than via the public switched telephone network (PSTN). The steps and principles involved in originating VoIP telephone calls are similar to traditional digital telephony, and involve signaling, channel setup, digitization of the analog voice signals, and encoding. Instead of being transmitted over a circuit-switched network, however, the digital information is packetized and transmission occurs as Internet Protocol (IP) packets over a packet-switched network. Such transmission entails careful considerations about resource management different from time-division multiplexing (TDM) networks. VoIP is commonly used on many smartphones, personal computers, and on Internet access devices.
VoIP Signaling & Standards
VoIP systems employ session control and signaling protocols to control the signaling, set-up, and tear-down of calls. They transport audio streams over IP networks using special media delivery protocols that encode voice, audio, & video with audio codecs and video codecs as Digital audio by streaming media. Various codecs exist that optimize the media stream based on application requirements and network bandwidth; some implementations rely on narrowband and compressed speech, while others support high fidelity stereo codecs. Some popular codecs include μ-law and a-law versions of G.711, G.722 which is a high-fidelity codec marketed as HD Voice by Polycom, a popular open source voice codec known as iLBC, a codec that only uses 8 kbit/s each way called G.729, and many others.
Replacing Standard Phone Lines
If you have a reasonable quality Internet connection you can get phone service delivered through your Internet connection instead of from your local phone company. This will typically produce 40-60% savings in monthly telephone line costs.
Some people use VOIP in addition to their traditional phone service, since VOIP service providers usually offer lower rates than traditional phone companies. Many companies will keep traditional analog lines for certain older technologies, ie; faxes, modems, postage machines, & credit card machines as they do not function reliably on VoIP.