Voice over Internet Protocol (Voice over IP) i.e. internet telephony refers to communications services like voice, fax, SMS, and voice-messaging applications that are transported via the internet, rather than the public switched telephone network (PSTN). The steps involved in originating a VoIP telephone call are signaling and media channel setup which includes digitization of the analog voice signal, encoding, packetization, and transmission as Internet Protocol (IP) packets over a packet-switched network. On the receiving side, similar steps in the reverse order; such as reception of the IP packets, decoding of the packets and digital-to-analog conversion regenerates the original voice stream.

VoIP (Voice over Internet Protocol) systems employ session control protocols to control the set-up and tear-down of calls as well as audio codecs which encode speech allowing transmission over an IP network as digital audio via an audio stream. The codec used is varied between different implementations of VoIP (and often a range of codecs are used); some implementations rely on narrowband and compressed speech, while others support high fidelity stereo codecs.

A VoIP phone is necessary to connect to a VoIP service provider. Different technologies like Ethernet, wireless Wi-Fi are being used by dedicated VoIP to connect directly to VoIP phones. They are typically designed in the style of traditional digital business telephones. An analog telephone adapter is a device that connects to the network and implements the electronics and firmware to operate a conventional analog telephone attached through a modular phone jack. Some residential Internet gateways and cablemodems have this function built in. A softphone is application software installed on a networked computer that is equipped with a microphone and speaker, or headset. The application typically presents a dial pad and display field to the user to operate the application by mouse clicks or keyboard input.

Basically there are 2 basic VoIP (Voice over Internet Protocol) service provider options: free services or paid service providers that charge a monthly fee. Making that choice depends on how you plan to use VoIP. Growth in the residential VoIP market is being driven by a number of factors. First and foremost is that VoIP telephony provides consumers with inexpensive voice communications. VoIP escapes the burden of the many regulations and taxes governments have imposed on traditional telephone services. So far that has allowed the VoIP service providers to beat the prices charged for wired telephone services. The burst of growth in broadband subscriber ship is a good sign for VoIP, because it works best over a broadband connection. The amount of bandwidth that a VoIP provider requires to make a quality telephone call is only one thing to consider when choosing a VoIP service provider.