What is VoIP calling and how does it work?

VoIP is an abbreviation of the term Voice over Internet Protocol abbreviated to Voice over IP or calling over the Internet. Through this protocol, phone calls are set up over the Internet instead of traditional telephone cable.

This new form of telephony is called VoIP telephony and is now the most widely used form of business telephony.

With this form of telephony, a physical telephone switchboard is no longer necessary, as the telephones log on via this protocol to your business telephony provider's VoIP telephone switchboard in the data centre.

The phone number on which your business can be reached and receive incoming calls is also logged on to this online VoIP PBX. The phone number has thus become a VoIP number, and thus a virtual number. It is no longer connected to a physical location. VoIP calling has become the new standard form of business telephony.

History and development of VoIP

IP telephony requires two technologies: the telephone and the Internet. The first telephones came into use in the 1970s. A first version of the Internet was set up in 1969, but it was not until 1993 that individuals could use it widely.


In 1995, VoIP was made possible by the Israeli company Vocaltec, Inc. All callers needed a microphone and speakers, which was not standard equipment on PCs at the time. But being able to call and chat with each other via voice over the computer was new, and internet users invested in a microphone and speaker. There came chat clients such as Skype and ICQ and the previously mentioned Vocaltec.


With the microphone and speaker or headset, you had actually developed a new kind of phone. And you could make unlimited free calls to your distant cousin in Australia via VoIP.


In 1998, solutions came on the market for calls from PCs to phones and vice versa. Now you could also make calls not only to someone who had the same programme installed on the computer but you could also call someone who still had an old-fashioned phone.

The Internet and the ordinary telephone network were linked. If you made contact with another Skype client via a client like Skype, this was free. If you made a call via Skype to someone with an ordinary telephone number and this part did not go through the Internet but through the telephone network, you were billed a few cents for this call. So VoIP telephony slowly emerged and the first VoIP telephony platforms were born.

In 2000, IP telephony accounted for 3% of all phone calls, while by 2003, VoIP calling accounted for 25% of all calls. It grew rapidly as consumers started making the expensive intercontinental calls via Skype and ICQ, and international telecom operators started handling their call minutes via internet data connections and thus were able to make huge savings: after all, they were now free to choose which routes and networks to use to handle a call between Amsterdam and New York !

The infrastructure also became a lot simpler now: data, VoiP calling, chat, video all went over the same connection and so there was no need to lay a separate phone line. There came a new subscription with unlimited calls and rates based on the number of users for a fixed amount per month including functionalities.

Multinationals also quickly recognised this important advantage and switched from fixed ISDN telephony to VoIP calling at the beginning of the 21st century, saying goodbye to telephone lines. This also paved the way for outsourcing to call centres abroad. In the year 2000, Belfabriek was founded in the Netherlands which started focusing on phone numbers and VoIP telephony.

How does VoIP work?

To send voice over a data network, the voice needs to be converted into small data packets and compressed. This is done by the caller's VoIP phone. During the call, these audio packets are sent one by one. After arriving at the destination, these packets are 'unpacked' again by the recipient's VoIP phone and speech is again audible. Your provider's VoIP PBX takes care of all this further and adds various phone features that are desired in the office such as a choice menu or queue.

Why VoIP calling is interesting for your business

Apart from a more manageable infrastructure and the lower costs we touched on earlier, Internet calling offers a number of important advantages for SMEs:

We offer great hosted VoIP telephony solutions for smart small and large enterprises. Want to know more about cloud telephony or want a new business phone number, contact us or register your own phone number right away !