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What is VoIP? What You Need to Know

In a world where internet systems are continuously evolving, VoIP phone systems have emerged as a compelling choice for businesses. However, the decision to switch from traditional phone systems to VoIP requires careful consideration.

voip phone system on a desk

What Is a VoIP Phone System?

VoIP, which stands for Voice over Internet Protocol, is also known as IP telephony. It's a technology that enables the transmission of voice and various forms of communication over the internet. Many businesses are making the switch from traditional phone services (POTS or PSTN) to VoIP due to its numerous advantages.

A VoIP phone system works by converting voice signals into digital data packets, which are then transmitted over the internet through a router. This technology offers a wide range of features, including voicemail, call forwarding, call waiting, caller ID, and conference calling, similar to traditional office Private Branch Exchange (PBX) systems.

One key advantage of VoIP is its seamless integration with other business applications, such as Customer Relationship Management (CRM) systems, providing a unified source of customer information. Furthermore, VoIP maintains call quality by relying on a stable internet connection, supported by various components like computers, routers, SIP phones, VoIP servers, and VoIP service providers.

The Difference Between a VoIP System and a Telephone Line

Traditional phone systems, whether at home or in an office (POTS or PSTN), utilize hardware running on the Primary Rate Interface (PRI) within the ISDN network. These systems require physical phone cables and a PBX server, allowing more phones than phone lines and offering free calls between users.

VoIP phone systems, on the other hand, come in three varieties: IP PBX, fully virtual VoIP, and hybrid VoIP. IP PBX setups route calls through VoIP networks and the PSTN system interchangeably. Fully virtual VoIP relies solely on the internet and phone system software, eliminating the need for physical phones and cables. Hybrid solutions combine PRI phone systems with IP phones.

How to Choose Between the Two

The choice between VoIP and PBX systems depends on various factors:

  1. Current Setup: If your existing PBX system meets your needs and scaling isn't an issue, sticking with it may be cost-effective.

  2. Internet Reliability: PBX systems use phone lines, ensuring continued communication during internet outages. VoIP forwards calls to another number during internet failures.

  3. Remote Teams: VoIP allows for remote work setups, while PBX limits calls to onsite locations.

  4. Cost: PBX systems have lower monthly fees but incur higher installation and maintenance costs. VoIP offers fixed monthly subscriptions without additional call or equipment expenses.

  5. Features: VoIP provides a broader range of features, including call queuing, recording, routing, and CRM integration, compared to PBX systems.

  6. Sound Quality: PBX systems usually have good sound quality, while VoIP quality relies on a strong internet connection.

  7. Availability: Setting up a new PBX system is costly and rare, whereas VoIP systems can be quickly implemented with a stable internet connection.

The Pros & Cons of VoIP Systems

VoIP systems offer several advantages:


  • Lower overall costs, primarily subscription fees.

  • Portability, enabling number retention during moves or phone changes.

  • Enhanced features and CRM integration.

  • Support for multiple communication channels.

  • Facilitation of remote teams.

  • No long-distance fees.

  • Scalability and easy line management.


  • Dependence on a consistent, strong internet connection.

  • Bandwidth requirements for quality calls.

  • Potential for decreased call quality.

  • Devices requiring power sources.

When to Consider Switching to a VoIP Phone System

Switching to VoIP is advisable when:

  • You are spending excessively on PBX maintenance and IT staff.

  • You prefer predictable, fixed subscription costs.

  • Mobility and CRM integration are crucial.

  • You need call center capabilities.

  • You desire multiple device ringing.

  • National or international numbers are required.

  • Remote work or distributed teams are part of your strategy.

Choosing the Right VoIP Phone Service

When selecting a VoIP phone service, consider:

  • Your current setup and transition ease.

  • Call volume and need for call center capabilities.

  • Scalability, especially for seasonal businesses.

  • Budget, including upfront and maintenance costs.

  • Employee adaptability and willingness to embrace VoIP features.

  • Integration with other business tools and software.

VoIP Migration

Preparing for VoIP migration involves:

  1. Evaluating your network's readiness.

  2. Selecting a reputable VoIP service provider.

  3. Collaborating on a migration plan.

  4. Training your staff.

  5. Thoroughly testing the new system.

Technical Requirements for VoIP Phone Systems

A successful VoIP infrastructure necessitates:

  • Hardware like routers, VoIP adapters, phones, and headsets.

  • A reliable internet connection, preferably through fiber optic cables.

  • Adequate bandwidth to support call volume.

  • Software applications, integrations, and cloud-based phone systems.

hosted voip network infrastructure infographic

Best Practices for VoIP Performance Management

To ensure smooth VoIP performance, follow these best practices:

  1. Verify network stability.

  2. Test devices, headsets, and network.

  3. Optimize firewalls for traffic flow.

  4. Use quality network cables.

  5. Prioritize VoIP traffic with Quality of Service (QoS).

  6. Check data speed (ping) and response time (jitter).

  7. Choose a reputable VoIP provider with a strong track record.

In conclusion, understanding the fundamentals of VoIP, its differences from traditional phone systems, and the factors influencing your choice can help you make an informed decision. VoIP offers numerous benefits, but its suitability for your business depends on your specific needs and circumstances.

Our expertise in VoIP technology, coupled with our commitment to delivering tailored solutions, ensures that your transition to VoIP is smooth and efficient. With our ongoing support, cost-effective models, and dedication to meeting your unique communication needs, we stand ready to be your VoIP phone system provider of choice. Choose Preferred Office Technologies, and let us empower your business with the advantages of cutting-edge VoIP technology.

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