VoIP Phone System

What is VoIP Phone System?

To most employees, a VoIP phone system is no different than any other office phone system. Unless they're using softphones (a computer program on the computer or cell phone that allows you to make calls), it's possible that they might not even know their office phone system uses VoIP phone service.

To employers and IT professionals, however, a VoIP phone system represents some very different things: For employers, a VoIP phone system represents some very significant savings. For IT professionals, a VoIP phone system is an additional component of a managed data network.

What is VoIP?

A VoIP office phone system treats phone calls as data packets. Using VoIP, calls are:

  • Converted from analog signals to digital signals using codecs
  • Broken into packets of information
  • Transmitted over the Internet as data

To use VoIP phone service, consumers must have high speed Internet access (DSL or cable), and some VoIP hardware such as a/an:

  • Analog telephone adapter (ATA)
  • IP phone or softphone
  • VoIP headset
  • VoIP router
  • IP or hosted PBX (for businesses)
  • VoIP gateway or session initiated protocol (SIP) trunk

Residential consumers of VoIP phone technology or small office/home office (SOHO) customers can use VoIP technology with fewer hardware requirements than a small business using a legacy PBX. SOHO users using a VoIP service provider such as Vonage or Phone.com typically only need a VoIP adapter, or ATA, and many services such as Vonage include an ATA for free, or provide a list of compatible models. (Check with your provider for details.)

VoIP hardware requirements for small and medium businesses (SMBs) depend on whether the office phone system uses a hosted PBX or an on-premises IP PBX.

Hosted PBX

A hosted PBX is generally less expensive than a premise-based IP PBX, and doesn't require as much hardware. With a hosted PBX, the equipment is housed and maintained off-site, freeing up space in the office and removing the burden and cost of software and hardware upgrades, patches, and other improvements.

An SMB using a cloud-based PBX service can take advantage of all the services of a hosted PBX, or integrate their existing public switched telephone network (PSTN) PBX into the cloud system with a VoIP gateway or SIP trunk.

Using IP phones, softphones, or VoIP headsets with a hosted PBX is purely optional, but does offer the advantage of one single, converged network supporting all types of data. Softphones can also be integrated not only with address books and company directories for one-click-calling, but also with specific enterprise resource planning (ERP) and customer relationship management (CRM) tools used by certain departments or companies (such as call centers).


An IP PBX is a VoIP phone system that uses the Internet for every communications function — voice, video, and data (email, text, instant messaging). The entire network is IP-based, allowing IP phones to be plugged directly into the Ethernet via wall jacks or the computer. An IP-based office phone system eliminates the need for analog phone hardware, although a SIP trunk is still recommended to receive calls made from the PSTN. Additionally, channel banks might be a wise decision for companies with many analog lines.

An IP PBX involves planning and significant hardware investments, but is a good fit for companies with a larger employee base. An IP PBX office phone system offers the advantage of one single data network, application integration, and capabilities such as hot desking. Hot desking allows an IP phone to be easily moved to another cube or office without rewiring or crosscutting, saving potentially hundreds of dollars on adds, moves, or other changes to company extensions.

A company that chooses an IP PBX as its VoIP phone system must take certain factors into account first, such as their network infrastructure. VoIP phone calls require a network optimized for sensitive, high-bandwidth data transmissions. Assessing the network load capability and voice traffic patterns is recommended before proceeding with plans for an IP PBX VoIP phone system. Hiring a VoIP consultant who can assess, organize, coordinate, and initiate a migration plan is strongly recommended.

Why Use VoIP?

The primary reason to choose a VoIP phone system is cost savings. VoIP service providers are able to offer phone service at a fraction of the cost of traditional telcos, often including service advantages such as unlimited domestic long distance, free international calls to landlines in select countries, or free international calls to a range of countries for an allotted amount of minutes. For instance, VoIPo offers 60 minutes of free international calls per month (consult contract for restrictions).

A VoIP office phone system can also provide business features that would be cost-prohibitive with a legacy PBX through a traditional telco. For instance, standard features on a business VoIP phone system include call waiting and caller ID, which would be available as costly add-ons through a traditional phone utility.

VoIP phone companies typically offer a host of convenience features as standard with even the lowest-priced business plan, such as:

  • Automated assistant
  • 3-way calling
  • Voicemail
  • Find Me/Follow Me
  • Voicemail-to-text (audio file attachment)
  • Visual voicemail (transcriptions)
  • Call hold and/or park
  • Music on hold
  • Call logs

For reasonable fees, add-on services are also available on an as-needed or monthly basis, such as conference bridges or call recording.

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