Today's business communications are constantly changing. Years ago, it simply involved voice calls. Now, businesses use calls, messaging, email, mobile apps, chat, and video conferencing to communicate internally and externally on any given day.
This evolution in communications not only changes employee and customer behavior—but it also changes the hardware and software required to make it happen. That's where VoIP (Voice Over Internet Protocol) comes in. VoIP empowers businesses to replace their outdated, traditional telephones with a complete communications package that happens all on the internet.
Chances are you've used more than one VoIP-powered app already today. Examples include:
- Google Hangouts
- Facebook Messenger
VoIP is changing the world of communications. With easy setup, low costs, and greater functionality, it's a technology that the future is embracing.
Below, we'll deep dive into the nitty-gritty details of VoIP, including what it is, how it works, and why you should consider using it.
What is VoIP?
VoIP stands for Voice Over Internet Protocol (you might hear it referred to as IP telephony, too), and it's a technology that enables you to make and receive voice calls over the internet. Traditionally, callers communicated over the PSTN (Public Switched Telephone Network) or what we think of as landlines. Instead, VoIP sends voice communications using data packets over a packet switched network (which we know as the Internet or Local Area Networks (LANs)).
All you need to make these calls is a device, an internet connection, a microphone, and VoIP. No traditional phones, analog lines, or circuit transmission required. Simple, right?
VoIP can utilize cell phones, desk phones ("hard phones"), mobile devices, and even computers equipped with headset microphones ("softphones") to connect callers—allowing you to communicate with new or existing hardware.
Whether you're scaling a call center or expanding your business to new offices, VoIP can keep you connected to team members and clients with lower costs and greater functionality. Here are a few of the advantages VoIP has over conventional telephony:
Voice over IP pros:
- Call Routing: Easily route your calls to a VoIP phone, regardless of where you've plugged in your physical network. This allows you to take calls anywhere in the world, as long as you have a reliable internet connection.
- Portable Numbers: Since VoIP numbers are virtual, you can take them wherever you go. That means you keep the same number anywhere in the world.
- Lower Costs: Since VoIP doesn't require investments in traditional PBX systems and landlines, you can switch and save significantly on your phone bill. Plain old telephone services (POTS) cost your business each month for each line, while VoIP saves you money with pay-as-you-go pricing. This allows you to scale up or down in response to demand easily.
- Twilio Voice Insights: Analyze your call performance to troubleshoot customer issues faster and deliver better communication experiences.
- Clearer Quality: Thanks to the evolution of the internet, finding a high-quality connection is simple and easy. This leads to clear calls with no noticeable latency, lag, or dropouts. However, if you don't have a quality connection, VoIP can become a con (more on that later).
- Multichannel Functionality: SIP Trunking enables you to provision SMS and MMS functionality from your phone numbers, allowing you to send text, images, and videos—creating a more seamless conversation.
- Security and Privacy: VoIP technology can eliminate security and privacy threats with encryptions and identity management advancements.
While VoIP has a number of benefits, it's not all sunshine and rainbows. There are a few downsides to VoIP you should keep in mind.
Voice over IP cons:
- Quality Dependent on Internet Connection: VoIP is only as reliable as your internet connection. While VoIP doesn't require too much bandwidth, you'll still need low latency on your network for lag-free conversations.
- Limitations for Emergency Services: The 911 system is built with traditional phones in mind. When you dial 911, first responders will be alerted to the fixed location of your landline. However, with the portability of VoIP calling, calling 911 will only transmit the address you provided at the time of setup—not your current location. Of course, you could provide your location details when making the 911 call, but that's not always a possibility in an emergency.
- Power Dependency: If you lose power and have no backup solution, your VoIP phones won't work. Landlines, however, don't require local electricity to make calls—they rely on power sent through the landline from the power companies. These companies usually have backup generators in case of a broad power outage, allowing you to keep making calls.
How does VoIP work?
At a basic level, VoIP works by sending and receiving calls over the internet instead of through traditional telephones and wiring. Speaking with a bit more detail, here's how VoIP works:
- Your VoIP-enabled device connects to the internet with an assigned IP address
- When you dial a phone number, your VoIP service establishes the connection and begins exchanging data packets over a packet-switched network via media delivery protocols like SIP (Session Initiation Protocol)
- Your VoIP phone converts the data packets into sounds that you can hear
Fixed VoIP phone numbers vs non-fixed VoIP numbers
You’ll need to decide whether you want fixed or non-fixed VoIP numbers—and each has a few differences you should keep in mind.
Fixed VoIP phone numbers are linked with an account holder's physical address, and non-fixed VoIP numbers can be associated with any geographical location.
That's the main difference when it comes to fixed and non-fixed VoIP numbers, but there are a couple of other nuances, too:
- Fixed VoIP lines typically have more advanced calling and routing features than non-fixed numbers
- Non-fixed VoIP numbers are generally free or cheap compared to fixed VoIP numbers
Price: VoIP vs landline
VoIP is typically cheaper than landline phone services and uses a pay-as-you-go pricing model. To get a reasonable ballpark estimate of the costs, take a look at Twilio's Voice pricing.
This page will give you a good idea of what costs you can expect for making and receiving calls, as well as recording and conference calling prices. Plus, you can compare costs across different countries for international calls and see volume discounts.
4 common VoIP use cases
Whether you're looking to expand your business's application of VoIP or you're just getting started, it's helpful to understand all the different ways you can use this technology. Here are 5 primary ways businesses are using VoIP today:
1. Client communication
Empower your customer success teams and account managers with technology that makes it simple and easy to connect with customers. Use VoIP phones to call your clients—no matter where you are or they are.
2. Sales communication
When you need to nail your product demo or your big sales pitch, rely on VoIP to get the job done. VoIP makes it much more affordable and reliable to scale your sales department, making each incremental sales rep more profitable for the business.
3. Customer support
While your support resources may have shifted to social media and other platforms, some clients enjoy (and expect) a good ol' fashioned phone call.
4. Contact center communication
Contact centers live and breathe phone calls, and VoIP software makes it more affordable to scale. Whether you're looking to start a new unified communications hub, or replace your outdated system, consider using a VoIP-enabled solution like Twilio Flex.
The future is VoIP
Consumers and businesses alike are dropping old-landline technology in favor of wireless and VoIP-enabled phones—and it's not hard to see why. Businesses who adopt this technology now will avoid a rude wake-up call in years to come, and they'll also get access to all the VoIP advantages we shared.
With flexible voice pricing options as low as $0.003 /min for inbound calls and $0.0095/min for outbound calls, there's no reason to delay making the switch. Want to get started? Check out all of our no-code voice apps that you can build in less than 5 minutes.