How VoIP Works
To understand how VoIP, short for Voice over Internet Protocol, works, it's helpful to compare it to how conventional phone calls operate. When you place a "regular" phone call using the Public Switched Telephone Network (PSTN), also known as Plain Old Telephone Service (POTS) you use what's called circuit-switched telephone. This system works by setting up a dedicated channel (or circuit) between two points for the duration of the call. These telephony systems are based on copper wires carrying analog voice data over the dedicated circuits.
This is in contrast to newer Internet telephony networks based on digital technologies. VoIP, in contrast to PSTN, uses what is called packet-switched telephony. Using this system, the voice information travels to its destination in countless individual network packets across the Internet. This type of communication presents special TCP/IP challenges because the Internet wasn't really designed for the kind of real-time communication a phone call represents.
Individual packets may — and almost always do — take different paths to the same place. It's not enough to simply get VoIP packets to their destination. They must arrive through a fairly narrow time window and be assembled in the correct order to be intelligible to the recipient. VoIP employs encoding schemes and compression technology to reduce the size of the voice packets so they can be transmitted more efficiently.
PSTN Versus VoIP