Long gone are the days of picking up a phone handset, tapping the receiver a few times, and saying, “Operator! Operator!”

While you can still make an analog phone call, most of the calls we make are of the digital variety, and some of today’s calls pass through the Internet. IP (internet protocol) telephony is the term used to describe internet phone calls that are based on the transmission of data packets rather than the transmission of electric signals over telephone wire. 

While the topic of IP telephony isn’t necessarily a complicated one, there is a good amount of essential information, including how IP telephony can benefit your business.

What Is IP Telephony?

The term IP telephony is used to describe a phone system that requires an internet connection in order to function. While an IP telephony system might send signals over phone lines, it transmits those signals as digital information, unlike legacy landline phones that send analog electric signals. IP phones require additional hardware in the form of a router and modem that are connected to the Internet.

The first IP telephony system came online in the mid-90s, and it allowed a user to call another user on the system through the use of an internet-connected microphone and set of speakers. Both users had to be online at the same time and using the same software. Soon after the first IP telephony systems were launched, internet-based voicemail software became available. Users could send voicemails to a phone number over the Internet. This early form of Internet voicemail did not catch on because of poor audio quality, dropped audio and dropped the connections.

The next step towards modern IP telephony involved a system that allowed users to call a telephone over the Internet using either their own phone or their computer. Because calls went to telephones, there was an element of redundancy in this approach, and it never really caught on with the public. While It was free to make calls on this system from VocalTec, a user had to listen to ads at the start and end of their call.

Despite these setbacks, the concept of sending voice information in the form of digital packages was attractive because of its speed, potential for higher quality, and cost-effectiveness. Increasing the availability of broadband Internet helped to significantly improve call quality and connectivity. Companies began to add IP capabilities to their voice systems, and eventually, software allowed users to make calls over the Internet. The idea of Internet phone calls started to catch on with the general public when people began to realize they could play games, surf the web, and make phone calls — all without leaving their computers.

Today, IP telephony is widely accepted, and many people consider it just one of many communications options available at their fingertips. Additionally, the technology keeps advancing and incorporating the latest technological developments, such as voice recognition and artificial intelligence.

How Does IP Telephony Work?

IP telephony uses digital protocols — typically standard Internet protocols — to send voice communications back and forth over the Internet. An IP telephone receives analog voice signals and translates them into data packets. These packets are sent to their destination using standard internet protocols. As these packets pass through networks and routers, these devices also use standard Internet Protocol to direct the packets to their destination. These primary protocols that make IP telephony possible include:

• SIP (Session Initiation Protocol). This protocol is used for signaling and managing call sessions.
• RTP (Real-Time Transport Protocol)/RTCP (Real-Time Transport Control Protocol). These protocols are used for sending streams of voice media.
• H.323. This protocol is used for the setup and management of a media session, which can include voice information.

These protocols and others are essential to IP telephony technology, as they allow for real-time communications. The protocols used in a system depend on the service provider and how the system is set up.

After the digital packets arrive at their destination, a router sends them to a Local Area Network (LAN), which then sends them to an IP phone or other device that reassembles the original audio using standard protocols. An IP PBX (private branch exchange) system receives digital audio information from IP telephony devices, transfers it to a Local Area Network (LAN) for call management, and then on to a provider that simply passes along individual calls. A Hosted VoIP (Voice Over Internet Protocol) system involves a LAN sending digital packets to a provider’s cloud system for call management.

An IP PBX system is more on-premise based, which offers more control and oversight. A Hosted VoIP system, on the other hand, is based in a provider’s cloud, and this offers greater flexibility but less control.

IP Telephony vs. VoIP

There are countless commercials for VoIP services on TV; you probably associate them with IP telephony. While the terms ‘VoIP’ and ‘IP telephony’ have been used interchangeably, it’s important to make the distinction between the two.

IP telephony refers to any voice communications that use the standard Internet Protocol. This may include legacy phone systems that have been upgraded to function over the Internet, but it can also include VoIP systems. Considered a classification of IP telephony, VoIP systems are defined by the specific technologies they use to send voice information.

But to be clear, while VoIP systems are technically a subset of IP telephony, many companies have started using the terms interchangeably. Modern versions of these systems both use a LAN to connect to the Internet through a modem.

An IP telephony system typically includes several key components that work in concert to allow for telephone calls over the Internet. These components may include:

• Network infrastructure. Because IP telephony systems are internet-based, they require network infrastructure that includes high-speed connections, enough bandwidth to handle voice data and a proper configuration.
• PBX infrastructure. In an IP PBX system, communications infrastructure is used to call the management unit for the IP telephony system. In addition to handling individual calls, this infrastructure may also handle voicemail and other features.
• IP phones. This type of hardware is designed to convert audio into digital packets that can be sent through an IP telephony system.
• Softphones. The ability to make a call isn’t limited to phones. Software and applications allow users to make IP calls from their computer, tablet or other device.
• VoIP Gateways. These hardware devices convert audio information into data packets that are sent to the Internet.
• Session border controllers. These specialized devices secure and manage IP telephony communications. They keep unauthorized users from accessing a network and shield it from cyberattacks.

Now that you have a sense of what IP telephony is, you may be considering it for your business. Let’s quickly discuss some of the benefits and drawbacks of such systems.

The Benefits of IP Telephony for Businesses

A VoIP system, cloud-hosted PBX or other telephony system is a major investment, and that investment can yield significant returns. The following benefits can help to explain why so many organizations are adopting an IP telephony system.

Lower Costs

The cost-effectiveness of internet-based voice communications is a major draw. Switching to a VoIP system can save a business as much as 50 percent compared to a legacy landline system. When a company switches to IP telephony, it also uses the same network that it’s already using for its data communications, eliminating the need to maintain dual networks. On top of that, VoIP and other systems can save a company on charges related to long-distance and international calls.

Easily Add Lines and Features

With a legacy landline system, adding new phone lines can be a major hassle. This problem becomes even worse for companies looking to expand their facilities or open a new office location. With IP telephony, new telephone lines can easily be added through an online dashboard. If the system is based in the cloud, it also means that these lines aren’t tethered to a physical location.

It’s also easy to add new features like call recording, text messaging, and video conferencing. These features can make an IP telephony system a one-stop shop for an organization’s communications rather than relying on a collection of different hardware and software solutions.

Greater Accessibility

The ability to work remotely was important before COVID, but the pandemic showed us all that certain jobs don’t require your physical presence in an office or call center. The massive switch to remote work also showed that some people enjoy the better work-life balance that it offers.

IP telephony supports remote work by being accessible from anywhere there is an internet connection. System users can receive and make calls from home with their mobile phone or laptop if they have the system software or application installed. In addition to being more flexible, employees also end up being more engaged in their jobs because of the amount of agency that they have in it.

Unified Communications and Marketing Analysis

Modern IP telephony systems are meant to be incorporated with other communication tools. For example, sales or support representatives could use the same software program to make calls, send texts to phone numbers, or conduct an online chat.

In addition to integrations with other communications tools, IP telephony programs can also integrate with a CRM. Representatives can easily pull a customer’s information and add notes during a call. The result is a superior customer experience that translates into greater customer retention.

A Few Considerations 

While these extremely valuable benefits make using IP telephony a very attractive proposition, the technology isn’t perfect. Network traffic and instability can lower audio quality, and cause calls to be dropped. Internet outages can render an IP telephony system useless. Therefore, companies should ensure that their network is running optimally in order to get the maximum return on investment.

There could also be compatibility issues between an IP telephony system and existing devices. Furthermore, there could be compatibility issues between an IP telephony platform and various software integrations. Consulting with an expert can help to avoid or resolve these issues.

Need Help Making the Switch? Contact Taylored Systems Today

At Taylored Systems, we’re used to hearing people ask about IP telephony. But don’t worry — our experts have been providing business phone services for more than two decades.

Our VoIP services are designed with business in mind, providing companies with access to all the essential functions of a modern communications platform. The setup of a VoIP system is quick and easy because there is little to no hardware installation. If you’ve already got a data network, you’re good to go! We can also connect your company with advanced features such as call waiting, group calls, conference calls, SMS messaging, call presence and more.

We also provide unified communications solutions that include many IP telephony integrations. We can integrate your CRM to ensure that your customers are receiving superior support and service. We can provide call recording solutions that facilitate training and employee review activities.

Businesses looking for comprehensive communications should also consider our contact center solutions. Hosted in the cloud, a contact center solution will allow your company to handle large volumes of calls in a very efficient manner. Callers can be placed in a queue or use self-directed services to find the information they need. Modern contact center solutions also include both real-time statistics and the ability to create comprehensive reports.

Whether your company is looking for a simple IP telephony solution or a comprehensive contact center solution, Taylored Systems has a team of experts capable of delivering. Contact us today to get answers to simple questions or to set up a comprehensive consultation!