Voice Over IP

Voice over IP (VOIP) is a form of packetized, digital telephone that uses the internet as its transport mechanism. The underlying technology for VOIP is considerably more complex than for chat or text-based instant messaging. VOIP first has to digitize (sample) a 3000Hz analog voice signal. Sampling yields a starting digital bandwidth of around 128Kbps, too high for real-time use over the internet, so the digital bandwidth has to be compressed into relatively small bitstreams (around 15Kbps might be typical).

Many good compression algorithms that reach these small digital bandwidths are proprietary and require license fees, which is an entry barrier for smaller companies looking to enter this arena. VOIP services also typically need to connect with the Public Switched Telephone Network so that callers can reach some places where VOIP might not be available, and this also is neither financial free, not without additional technical difficulty (i.e., VOIP call setup and teardown must interact with existing PSTN call control services, and the software for this must also be developed).

Despite these issues, VOIP services tend to cost less overall than the traditional landline based PSTN voice telephony services, because VOIP can be offered without regard for the physical infrastructure (long-haul fiber optics, or short-haul outside copper plant) that traditional telephone companies had to provide.