VOIP is an acronym for Voice Over IP, or in more common terms phone service over the Internet. If you have a reasonable quality Internet connection you can get phone service delivered through your Internet connection instead of from your local phone company.
Some people use VOIP in addition to their traditional phone service, since VOIP service providers usually offer lower rates than traditional phone companies, but sometimes doesn't offer 911 service, phone directory listings, 411 service, or other common phone services. While many VoIP providers offer these services, consistent industry-wide means of offering these are still developing.
A way is required to turn analog phone signals into digital signals that can be sent over the Internet. This function can either be included into the phone itself or in a separate box like an ATA.
VOIP Using an ATA..
Ordinary Phone ---- ATA ---- Ethernet ---- Router ---- Internet ---- VOIP Service Provider
VOIP using an IP Phone
IP Phone----- Ethernet ----- Router ---- Internet ---- VOIP Service Provider
VOIP connecting directly
IP Phone ----- Ethernet ----- Router ---- Internet ---- Router ---- Ethernet ---- IP Phone
VOIP is useful in folllwing.
VoIP can turn a standard Internet connection into a way to place free phone calls. The practical upshot of this is that by using some of the free VoIP software that is available to make Internet phone calls, you are bypassing the phone company entirely.
Lower Cost
In general phone service via VOIP costs less than equivalent service from traditional sources. This is largely a function of traditional phone services either being monopolies or government entities. There are also some cost savings due to using a single network to carry voice and data. This is especially true when users have existing under-utilized network capacity that they can use for VOIP without any additional costs. In the most extreme case, users see VOIP phone calls (even international) as FREE. While there is a cost for their Internet service, using VOIP over this service may not involve any extra charges, so the users view the calls as free. There are a number of services that have sprung up to facilitate this type of "free" VOIP call. Examples are: Free World Dialup and Skype
Increased Functionality
VOIP makes easy some things that are difficult to impossible with traditional phone networks.
Incoming phone calls are automatically routed to your VOIP phone where ever you plug it into the network. Take your VOIP phone with you on a trip, and anywhere you connect it to the Internet, you can receive your incoming calls.
Call center agents using VOIP phones can easily work from anywhere with a good Internet connection.