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Technology overview

The starting point in understanding VoIP is to look at the basics of how communications work today.

The flow of communications is the lifeblood of any company.  Through telephone calls, eMails, faxes, file downloads, voice mails and other methods, companies communicate with their customers, suppliers and employees.  Traditionally, voice communications has happened entirely separately from the flow of data.  Each office desk generally has two connections onto it.  One is a phone cable from the telephone to a Private Branch Exchange (PBX) or a smaller Key System that connects the building to the Public Switched Telephone Network (PSTN), in other words to the phone company, as shown below in figure 1.

Figure 1:  Phone to PSTN

The PSTN evolved in most countries as a public service provided by a single operating entity.  Generally these monopoly institutions have been broken up, giving way to a handful of major new operators.  Competition between these firms has driven down the cost of communications, but telecommunications costs still represent a significant recurring charge to businesses, as do the costs of maintaining and periodically upgrading the telecommunications systems the company owns.

The second connection on most business desks is a data cable from the PC to a data switch or router and out of the building onto the Wide Area Network or Internet, as shown below.

Figure 2:  PC to Wide Area Network

Data communications has evolved differently from the voice world due to the non-regulated and global nature of data networks.  The Internet has created an environment of standards-based communications with a large number of competing equipment vendors and network operators.  Data can travel over private connections, but it can also be encoded to securely traverse a mixed network of public connections. 

Data passes from the PC on the desk either over a wired connection, typically an Ethernet cable, or a wireless connection, to a router.  This part of the communications path is called the Local Area Network (LAN).  The router acts as the concentration point for data within the building and translates the data into packets based on the Internet Protocol or IP.  This is the standard that underlies computer based communications today, including the Internet.  The router packages the data out onto the Wide Area Network (WAN).  This may be a private set of connections owned and used by just one company to connect its offices, or more typically, it is a public network operated by a Network Service Provider with connections to the wider Internet.  The company’s data traffic can be protected as it travels across this shared infrastructure by encryption and special addressing.