What does voice over IP mean?

Voice over Internet ProtocolVoice over Internet Protocol (VoIP), is a technology that allows you to make voice calls using a broadband Internet connection instead of a regular (or analog) phone line.

Voice over Internet Protocol, also called IP telephony, is a method and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol networks, such as the Internet.

Types of VoIP services you should know about

Most business owners and individual users know that making calls via VoIP is cheaper and more feature-rich when compared with the old landline telephony system. Still, you might be unaware of the VoIP service options out there, not to mention how to determine the right one for your needs. So, read on to learn more.

VoIP comes in a variety of forms. Do you rarely leave your house and office, or are you usually on the move? If you’re a business owner, what’s the size of your company and what factors matter most to you? Let’s take a look at some of the VoIP services available on the market to help you make a better decision when it comes to choosing your means of voice communication.

Residential VoIP Services

For this type of VoIP, you use an adapter to connect your landline phone set to a Wi-Fi modem to make and receive calls over the internet. Depending on the plan you choose, you’ll be billed each month for either unlimited services or for minutes you actually use.
Examples:, Lingo

Device-based VoIP Services

This involves purchasing a VoIP device from a service provider and plugging it into your existing phone set so that you can make free calls within the U.S. This means not having to pay a monthly bill, and you need no other devices besides your old landline telephone set.
Examples: MagicJack, Ooma

Software-based VoIP Services

This is the most common type of VoIP, and many of us use it on a daily basis. You either access a web-based application online, or install it as software on your computer. Then you use your computer’s audio input and output device to talk and listen.
Examples: Skype

Mobile VoIP Services

Like the software-based VoIP services, mobile VoIP is also an application. However, it is installed on mobile phones instead of computers, thus enabling you to make and receive calls no matter where you are as long as you have a good internet connection.
Examples: Skype, WhatsApp, Google Hangout

Business VoIP Services

VoIP for business comes in two options: on-premises and cloud-based. Both provide much more cost-effective communication solutions than traditional landlines and have a variety of useful features for businesses. These include video and audio conferencing, screen-sharing, interactive voice response, automated attendants, call queues, and call reports, just to name a few. These features are scalable and you’ll also get complete technical support.

For on-premise VoIP systems, businesses need to purchase all the equipment and house it in their office. This requires huge capital costs. Businesses also have to pay a monthly fee for SIP trunking or PRI circuit, as well as dedicate IT staff to maintain, repair, and upgrade the systems on a regular basis. The up side is you’ll have total control of your hardware.

With cloud-based VoIP systems, you outsource the phone system to your VoIP provider. This means there’s no need to purchase hardware or invest your resources into maintaining the systems since your provider will take care of everything for a fixed monthly fee. You can also add or remove users easily. The con is that you’re not in total control of the hardware and need to rely on your provider’s expertise to ensure system reliability and security.

Want more detailed information about VoIP and how to choose the most suitable VoIP provider? Talk to our professionals today. They have extensive knowledge about this efficient, low-cost communication technology and can explain everything to you in plain English!


While email has definitely become the most popular form of communication for businesses, there’s still something about a good old fashioned phone call that email just can’t convey. One of the most popular phone systems in use these days is Voice over Internet Protocol (VoIP), which uses an Internet connection to convey phone calls. Are you looking for a new phone system? VoIP may be what you need, especially since there are some great features your business could benefit from.

Here are five VoIP features offered by many providers that small to medium businesses will benefit from.

1. Voicemail/call forwarding
Many smaller businesses simply can’t be open 24 hours. This means that there will be time where you or your employees are unable to answer the phone. Most industry leading VoIP providers offer the ability to convert phone messages into emails, which could be a great help to your business.

A good VoIP solution will also provide you with a voicemail system and a feature called Find me/Follow me. This is a call forwarding feature that allows users to receive calls regardless of their location or phone number. This makes it easier for you and your managers to be reachable when they are outside of the office, especially if calls can be forwarded to their mobile phone.

2. DND
DND, or Do Not Disturb is an important feature for those who work with clients on a regular basis. When you are talking to a client, the last thing you want is to be interrupted by a phone call as it can make you look unprofessional.

Many VoIP systems actually offer advanced DND features like the ability to send calls to voicemail, or transfer to another colleague who may be able to answer the call at the press of a button.

3. Conferencing
You can pretty much guarantee that you will need to eventually make a conference call. Some managers and owners may even make this type of calls on a regular basis. The best VoIP systems go further than just supporting conference calls, they also enable users to send files, chat messages, collaborate on calendars, share presentations and even desktops. This is often called Unified Communications by many vendors.

4. Auto Attendant
This feature gives your business a bigger footprint by allowing you to setup multiple numbers in local areas, and have a menu system like many large companies. This means you can setup a system where a caller can easily get into contact with different departments, or even a live operator.

Some users don’t like this feature because they see it as an impediment to immediate customer service – think of the last time you had to navigate a menu system over your phone? It really comes down to the preference of your company.

5. Call Recording
If your company operates in an industry that is regulated, you may need to record calls. Or, you may want to record calls to track customer satisfaction and questions. Regardless of your need, a good VoIP system will allow the user to easily record calls, often at the click of a mouse, and store them in an audio format that can be easily replayed later.

These are just the features offered by many VoIP providers

VoIP: Advantages

Being VoIP providers ourselves at Nextiva, it would be fair to say we know a thing or two about VoIP. Here’s a detailed guide into its pros and cons:

  • Lower costs
  • Increased accessibility
  • Complete portability
  • Higher scalability
  • Advanced features for small and large teams
  • Clearer voice quality
  • Supports multitasking
  • More flexibility with softphones

1) Lower Costs

The bottom line is vital for every business, large or small. So, you have to consider every cost-saving opportunity. One way companies can realize significant cost savings is by adopting a VoIP phone system.

Consider this:

On average, a landline phone system (POTS) costs businesses $50 per line each month. This rate comprises local (and sometimes domestic) calls only. VoIP plans, in contrast, are available for less than $20 per line.

Wait, what?

That’s right. Going by these figures means, VoIP can lower your phone bill by more than half of what it is right now.

It’s important to note that a shift to VoIP is not a guarantee that your phone expenses will plummet. Businesses differ, and so do their needs.

But what you can be sure about is that switching to VoIP will bring about considerable cost savings. Cost savings in VoIP come in two ways: direct and indirect.

Direct Cost Savings

When it comes to traditional phone service, a business incurs massive initial costs. Especially in the name of business phones and PBX hardware.

a) PBX Costs

A PBX (private branch exchange) is an on-premise physical piece of hardware. It connects many landline phones in an office and can cost a huge sum of money. We are talking tens of thousands of dollars — an amount you can amortize over several years.

You may argue that analog phones cost about the same as IP phones. The exact price will differ based on the desired features.

But, onsite PBX installations are a costly capital undertaking. It can go for anywhere between $500 and $2,000 per user. So even a small business with a handful of employees needs to invest in physical hardware.

VoIP networks do away with this need for extra hardware since a broadband connection powers the service.

To ease the transition in their phone system upgrades, such organizations could use a Session Initiated Protocol, known as a SIP Trunk. A SIP Trunk acts as a digital pathway for your voice services while maintaining existing phone hardware in your office. The key benefits of SIP Trunking include lower costs, easier to manage, and you can activate service instantly.

Technology leaders use SIP Trunking for adding new voice capabilities to an existing phone system.

b) Copper Wiring Charges

Broadband connections also do away with the extra wiring because VoIP networks allow both voice and data on the same channel. In IT and telecom circles, the correct word for this is full-duplex. It’s the ability to send and receive voice and data concurrently. Most VoIP desk phones need only one Ethernet to be connected to it.

Power over Ethernet (PoE) enables offices to be more modular with their office staff. Additionally, those offices won’t need to make changes to the building’s electrical wiring.

Going completely wireless? Professional VoIP service is also available as an app on your computer or smartphone. VoIP’s flexibility is a big win for entrepreneurs and enterprises alike.

c) Calling Expenses

Direct costs also come in the form of the cost of calling. VoIP calls are cheaper compared to the Public switched telephone network (PSTN) or the traditional circuit-switched telephone network by a stretch.

A large part of this has to do with the drastic fall in data carriage costs. Initially, data was priced out of the reach of most small businesses.

Even for large organizations, users had to contend with capping on enterprise internet bandwidth and broadband. Today, however, internet speeds have improved while data costs have correspondingly taken a nosedive.

Statistics reveal that small businesses using VoIP can reduce their company’s phone bills by up to 60%. They can also save up to 90% on international calls.

That’s a substantial number we are talking about in any given year.

These savings go back to the abandonment of expensive ISDN (short for Integrated Service Digital Network) primary rate interfaces. Or even the dedicated lines associated with a POTs System in favor of VoIP service. Companies that make long-distance calls outside of the United States enjoy VoIP’s lower costs.

Traditional phone service costs approximately twice as much as compared to VoIP. VoIP offers a significant benefit for businesses that operate globally.

d) Recurring Expenses

A VoIP service also enables businesses to cut other ongoing expenses such as taxes, repair and maintenance fees. VoIP providers usually roll these costs into subscription plans which, like in the case of Nextiva, can cost as little as $5 per user per month.

All these costs, combined, make VoIP service an appealing proposition for growing startups and SMBs.

Indirect Cost Savings

Indirect savings are more difficult to quantify, but that doesn’t make them any less critical for your business. Below are some of the most common areas where organizations save money long-term.

a) Savings with Remote Work

Switching to VoIP lets employees stay connected to the corporate phone system while working remotely. This is thanks to the long list of VoIP phone  features like call waiting, auto-attendant, instant video calling, conference calling, and others not provided by traditional phones.

Studies show that this not only can increase employee productivity, but it can also cut down on utilities and office space.

b) Add-On Features at No Extra Cost

You probably might be quick to point out that even traditional PBX supports remote working through functionalities like call transfer, group ringing, call queuing, and so on.

In essence, these features are not inherent in a standard PBX system. Rather, they are add-on features that you have to pay for separately.

By comparison, VoIP phone services include many of these features at no additional cost. No need to pay extra for whatever feature you think could be useful for your business.

c) Repurposed Manpower

If your business relies on a secretary to handle phone calls and take messages, the auto attendant feature lets you repurpose that role at no additional cost. (An in-house secretary hired on a full-time basis pockets about $45K a year, which is not cheap.)

Of course, a secretary does make sense for companies taking a large number of walk-ins or large corporations with sizeable budgets.

However, smaller businesses may find it difficult to justify this kind of salary. But with the auto attendant feature a click away, you’ve just waived this cost.

2) Increased Accessibility

Cost efficiency aside, accessibility is one of the biggest benefits of VoIP for business. One distinct advantage cloud based VoIP service offers is the ability to make calls from anywhere.

If you have a decent data connection, you can make and receive calls for your business. And when you’re unable to answer the call, you can direct calls to another person or get voicemails emailed to you. A noted benefit of VoIP is the ability to take your business phone with you with nothing more than a softphone app.

In an increasingly mobile workforce, remote accessibility allows your business to be flexible. Mobile employees can stay productive regardless of their location.

What’s more: VoIP adapts based on how your employees work. Employees don’t need to be physically present at the office. They can work on their smartphones and tablets from anywhere.

3) Complete Portability

A VoIP number, also known as a virtual number is completely portable. This means you can use the same number wherever you go.

For people who travel a lot, this should be more than welcome news. Better yet, in the event your business changes address, you can retain the same VoIP number.We’ve done the research for you. Download the VoIP Phone System Buyer’s Guide loaded with best practices and recommendations. 

4) Higher Scalability

Scalability is another of the many VoIP advantages that make it an attractive proposition for growing businesses. While this is an often-talked-about aspect of VoIP, what does it mean exactly?

Given the option, every business owner would prefer a phone system that grows in step with their business.

A VoIP solution does away with having to purchase expensive hardware or dedicated line as you grow. Think of all the possible scenarios here like you’re:

  • Prepping for a spike in demand during the holidays
  • Opening a new branch office

No matter what the scenario, toggle your preferences instantly without having to purchase additional lines or dedicated hardware.

5) Advanced Features for Small and Large Teams

With advanced features like auto attendant and call transferring, VoIP allows even a one-person operation to project the image of a larger company.

On the other hand, it can make a large enterprise feel more approachable. It’s all about making the best use of all the available features.

Let’s say you have a Charlotte-based business, but you also serve clients in a far-away state like Oregon.

By signing up with a provider like Nextiva, you get a VoIP phone number with the Ooregon area code, although you’re based in North Carolina. This makes customers perceive you as a local, even though you are not.

Similarly, the auto attendant feature can make you look larger than you are. For example, you could be a sole proprietor but still set up your auto attendant to sound like you are a company with multiple departments.

VoIP offers advantages over traditional phone systems with its multi-party calling capabilities. Organizations large and small often need a separate conference call provider that enables many people to join the same call.

Business VoIP providers include robust conference calling features built right into their service.

6) Clearer Voice Quality

When VoIP service first rolled around, one of its most significant disadvantages was its weak call quality. Calls would drop for no reason, the voice quality itself was bogus, and latency was the order of the day.

Today, as long as you have a fast and stable Internet connection, voice quality should not be an issue. VoIP calls tend to be crisp and clear, with no latency issues, lag, or call dropouts. We’ve all been on a miserable voice and video conference before.

The key to VoIP call quality is a robust connection with good bandwidth. Without this, it can be a nightmare, especially if you often find your office making concurrent calls. There’s always someone who calls in with a cell phone, and everyone else suffers through echos, delays, and background noise.

VoIP phones end those interruptions so you can focus on the meeting’s agenda. Innovations such as noise-canceling microphones and advanced audio compression enable VoIP Phones to achieve superior sound quality.

7) Supports Multitasking

Along with traditional phone calls, VoIP allows you to send documents, images, and videos all while simultaneously engaging in a conversation. So you can seamlessly hold more integrated meetings with clients or staff from other corners of the globe.

8) More Flexibility with Softphones

Despite the name, softphones are not hardware devices. Instead, they are programs installed on a computer or other smart devices like a tablet or smartphone. A good example is Skype, although enterprise VoIP providers like Nextiva have their applications tailored particularly for business.

The upside to having a softphone for your business communications is manifold:

  • Frees up desk space
  • Cuts additional equipment costs
  • Allows for even greater portability
  • Enables the constantly-connected workforce

More than that, softphones allow you to be flexible. They give you access to features that support your remote work style.

9) Increased Security

Most people don’t care to spend more time than it’s worth to think about the security of their phone system. Phone system security is a big deal, especially for businesses. Demand for personally identifiable information (PII) has never been higher.

A typical entry point is to trick staff through fraudulent phone calls, typically known as social engineering.

VoIP can mitigate such security threats by leveraging the advancements made in IP technology including encryption and improved identity management. Hosted VoIP providers work around the clock to protect their networks, so you don’t have to.

Securing your VoIP system means you should work with a trustworthy VoIP provider that undergoes independent security audits, ensure staff practices healthy password habits, and configure automated alerts for questionable calling behavior.

Additionally, it is always advised to complete operating system updates consistently to ensure your business isn’t at risk through newer vulnerabilities.

VoIP: Disadvantages

Everything that has an advantage has its disadvantages. VoIP telephoney is not exempted from this rule.

Here are the downsides associated with the VoIP service you need to be aware of:

  • Reliable Internet Connection Required
  • Latency and Jitter
  • No location tracking for emergency calls

1) Reliable Internet Connection Required

For starters, your VoIP Service is only as good as your internet connection. If your network bandwidth is low, the service is bound to suffer.

VoIP doesn’t use as much bandwidth as you might expect. It’s essential that VoIP devices receive low latency on your network. Each device should have at least 100 kbps upload speed available. A good connection has less than 70ms ping and jitter, which measures the latency and stability of your internet connection.

The bandwidth your business needs will depend on the number of concurrent calls you plan on making. The best way to determine this is to run a bandwidth test on your current network.

2) Latency and Jitter

Aside from speed, there are other connection issues any internet-based technology can face: latency and jitter.

When communicating online each message (whether it be email, video, or audio) is broken into bits of data called “data packets.” These packets are then reassembled at their intended destination to create the original message.

Latency and jitter are when these data packets either hit delays in transmission or get improperly re-assembled. These issues might not even be with your network; major internet backbones modify data routes to deliver traffic reliably, fastest path to a destination. These changes happen automatically with no involvement on your part.

Why latency and jitter occur

  • Poor Internet connection — VoIP requires more bandwidth than regular web surfing. So, if you find your Internet speed wanting, it might be a good time to have an honest conversation with your ISP.
  • Inadequate router – For VoIP service to run smoothly, it needs a specialized VoIP router. This is a router configured for packet prioritization so that it affords higher priority to voice traffic over data.
  • Insufficient cables – Ethernet cables come in a range of categories or power levels. For VoIP, it’s best to use a Cat-5e Ethernet cable or higher. Lower cables may not be able to operate at high enough speeds.

How to fix latency and jitter issues

  • Enable jitter buffering — This is easy to set up and comes pre-enabled with many of Nextiva’s devices.
  • Opt for high-speed Internet — Contact your internet provider about available bandwidth options.
  • Upgrade ethernet cables — Use a CAT-5e or CAT-6 Ethernet cable on all VoIP devices.

3) Limited Location Tracking for Emergency Calls

Location tracking is the final con of VoIP. Because of VoIP’s portability and accessibility, it’s difficult for third parties to pinpoint where a call originates.

The calls come from an IP address with no GPS data or cell tower information to track. While 99% of callers don’t need this information, this does create an issue for emergency services like 911. You’ll need to communicate where you are in an emergency.

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