Voice-over-Internet protocol (VoIP, IPAEng: vɔɪp) is a protocol optimized for the transmission of voice through the Internet or other packet-switched networks. VoIP is often used abstractly to refer to the actual transmission of voice (rather than the protocol implementing it). VoIP allows users to use regular telephone networks anywhere through any internet service provider, and avoids issues on long distance charges that are normally subject to callers. This latter concept is also referred to as IP telephony, Internet telephony, voice over broadband, broadband telephony, and broadband phone.

VoIP providers may be viewed as commercial realizations of the experimental Network Voice Protocol (1973) invented for the ARPANET providers. VoIP can be a great benefit to major corporations trying to cut costs by simply running network cables. Although it requires those using VoIP to have a well configured network it is a new use of IP that is extremely cost efficient. Skype and Vonage are great examples of how VoIP is being greatly utilized world wide.

Voice-over-IP systems carry telephony signals as digital audio, typically reduced in data rate using speech data compression techniques, encapsulated in a data-packet stream over IP.

There are two types of PSTN-to-VoIP services: Direct inward dialing (DID) and access numbers. DID will connect a caller directly to the VoIP user, while access numbers require the caller to provide an extension number for the called VoIP user.

History

Voice-over-Internet Protocol has been a subject of interest almost since the first computer network. By 1973, voice was being transmitted over the early Internet. The technology for transmitting voice conversations over the Internet has been available to end-users since at least the early 1980s. In 1996, a shrink-wrapped software product called VocalTec Internet Phone (release 4) provided VoIP along with extra features such as voice mail and caller ID. However, it did not offer a gateway to the PSTN, so it was only possible to speak to other Vocaltec Internet Phone users. In 1997, Level 3 began development of its first softswitch (a term they invented in 1998); softswitches were designed to replace traditional hardware telephone switches by serving as gateways between telephone networks.

Revenue in the total VoIP industry in the US is set to grow by 24.3% in 2008 to $3.19 billion. Subscriber growth will drive revenue in the VoIP sector, with numbers expected to rise by 21.2% in 2008 to 16.6 million. The United States' largest VoIP provider is Vonage.

Functionality