What is VoIP? A complete guide to Voice over Internet Protocol

Who this guide is for

Audience: Business owners and IT managers evaluating VoIP phone systems.

Understand how VoIP calling works — SIP, PBX, codecs, trunking, DID numbers, STIR/SHAKEN, and the protocols behind business phone systems.

Use this guide when you want the setup to be correct the first time and easy for another admin, manager, or supervisor to verify later.

What this workflow helps you accomplish

VoIP (Voice over Internet Protocol) converts voice into digital packets and transmits them over IP networks. Unlike traditional PSTN lines, VoIP calling uses your existing internet connection to make and receive calls with higher flexibility, lower cost, and no dedicated phone line hardware required.

This workflow matters because numbers, routing, access, and reporting in CallOrbit are connected. Skipping one setup detail usually creates avoidable support work later.

• Step 1: Understand the core difference between VoIP and traditional telephony: VoIP sends digitised voice packets over IP networks instead of circuit-switched PSTN lines, which is why calls can be routed from anywhere with internet access.
• Step 2: Identify the three main types of VoIP deployment — hosted VoIP (provider-managed, no on-site PBX), on-premise VoIP (PBX hardware at your location), and hybrid setups that combine both approaches for redundancy.
• Step 3: Check your internet connection requirements: a single VoIP call typically needs 80-120 Kbps per channel in each direction using G.711 codec. Multiply by your peak concurrent call count to confirm your bandwidth is sufficient.
• Step 4: Evaluate the key features VoIP unlocks: IVR auto attendants, call queues, call recording, voicemail-to-email, auto-attendant menus, softphone and mobile app calling, CRM integrations, and real-time analytics that traditional phone lines cannot provide.
• Step 5: Confirm your network supports Quality of Service (QoS) configuration so voice packets are prioritised over data traffic. Without QoS, latency spikes from large file uploads or streaming can degrade call quality.

Setup checklist

• Understand the core difference between VoIP and traditional telephony: VoIP sends digitised voice packets over IP networks instead of circuit-switched PSTN lines, which is why calls can be routed from anywhere with internet access.
• Identify the three main types of VoIP deployment — hosted VoIP (provider-managed, no on-site PBX), on-premise VoIP (PBX hardware at your location), and hybrid setups that combine both approaches for redundancy.
• Check your internet connection requirements: a single VoIP call typically needs 80-120 Kbps per channel in each direction using G.711 codec. Multiply by your peak concurrent call count to confirm your bandwidth is sufficient.
• Evaluate the key features VoIP unlocks: IVR auto attendants, call queues, call recording, voicemail-to-email, auto-attendant menus, softphone and mobile app calling, CRM integrations, and real-time analytics that traditional phone lines cannot provide.
• Confirm your network supports Quality of Service (QoS) configuration so voice packets are prioritised over data traffic. Without QoS, latency spikes from large file uploads or streaming can degrade call quality.

Operational follow-up

After you complete this flow, confirm the live experience from both the agent and customer side so ownership, routing, permissions, and reporting all match what the workspace expects.

If your team is rolling this out across multiple users, queues, or phone numbers, pair this article with the broader knowledge base and the relevant routing or numbers guides to keep deployment consistent.

• What is the CallOrbit Knowledge Base for? — It is the public help hub for how CallOrbit works, covering numbers, webphone setup, SIP, extensions, routing, users, roles, and billing basics.
• Can customers read this without signing in? — Yes. The Knowledge Base now lives on a public route so customers can read setup guidance before or after they enter the portal.
• Does the portal still have its own Knowledge Base page? — No. The signed-in portal navigation no longer carries a separate Knowledge Base page, and the old portal path now redirects to this public version.
• What is VoIP and how does it work? — VoIP (Voice over Internet Protocol) converts analogue voice signals into digital packets and transmits them over IP networks. Unlike traditional PSTN phone lines that require dedicated copper wiring per line, VoIP calls use your existing internet connection, which makes them cheaper, more flexible, and easier to scale.
• What is SIP trunking? — SIP trunking is a virtual connection that replaces traditional analogue phone lines or PRI circuits. A SIP trunk carries multiple concurrent voice channels over a single IP connection to your PBX or phone system, eliminating per-line hardware costs and monthly line rental fees.
• What is the difference between hosted PBX and cloud PBX? — Hosted PBX runs on dedicated virtual infrastructure managed by a provider, while cloud PBX uses shared multi-tenant cloud infrastructure. Hosted PBX suits organisations needing custom configuration and predictable pricing. Cloud PBX is better for instant scalability and per-user monthly billing.
• What is a DID number? — A DID (Direct Inward Dialling) number is a virtual phone number that routes directly to a specific extension, IVR menu, queue, or user within a phone system without an operator. DIDs decouple the phone number from the physical phone line, so you can have hundreds of numbers routed through a single SIP trunk.
• What are G.711, Opus, and G.729 codecs used for? — These are VoIP codecs that convert voice into digital data. G.711 uses 64 Kbps for toll-grade quality and is the PSTN standard. Opus uses 6-510 Kbps and adjusts to network conditions. G.729 uses 8 Kbps for bandwidth-constrained links. The right codec depends on your available bandwidth and call quality requirements.

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