20 Feb

What is IP telephony and how does it work?

Everyday we hear terms like VoIP, IP telephony, voice chat, etc. Ever wonder “exactly” what these mean? Here’s a brief overview of what “IP telephony” is and how it really works?

To understand IP telephony, we first need to understand “VoIP”. VoIP stands for Voice over Internet Protocol, which means carrying “voice” over the “Internet”. VoIP is a broad term which has a number of applications.

Now a good question can be – what’s the advantage of carrying voice over Internet?

The simplest answer is – it gives extremely cost efficient communication. You might be wondering why it’s cheap compared to telephone service? The answer lies in the fundamentals of communications. Let us understand what the technical difference is between a telephone call and a voice chat (i.e., carrying voice over telephone line vs carrying voice over Internet.)

Conventional telephone lines are based on technology called “circuit switching”, while most Internet connectivity technologies are based on “packet switching”. With circuit switching, a circuit is “leased” or “locked” during communication and billing is based on the time period of “leasing circuit”. With packet switching, data is broken into small packets and sent to the other party over the Internet. These packets can choose any available route.

You can visualize circuit switching as:

Here A has to communicate with I. When A initializes a call, it will “lease” a line via B – C – D – E – F – G – H to I. This “lock” will remain there unless A disconnects. In this way, there is a dedicated line between A and I for the duration of the call. Since A and I won’t be transferring data constantly, this approach wastes lots of resources.

To resolve this problem, most modern connectivity technologies use Packet switching. You can visualize it as:

As we can see, in packet switching – “packets” can follow multiple paths based on availability of path. Now to send data from A to I, obviously shortest way is to send data directly as they have a connection, but if that connection is busy, it can follow route via B or C and so on. In all the cases, circuits (“lines”) will be leased ONLY for the time required to transfer the packet and thus billing is done on the basis of “number of packets” transferred.

Breaking data into packets gives a lot of flexibility and makes transfer very cheap but circuits are “shared” one can’t guarantee for availability .

This is why a voice chat is cheaper than a phone call.

Next comes IP telephony. It simply means “telephony”  over IP (i.e Internet Protocol). IP telephony is an application of VoIP. IP telephony works by carrying telephone calls.

Can we connect to any phone in the world from Internet for free?

Answer – No!

Let’s understand how IP telephony routes phone calls. We can understand it by comparing it with a conventional phone call.

I want to call my friend Micheal in New York . So I have two options – either a phone call or IP telephony call from a service like skype. If I make an ISD  phone call, the whole path will be covered by a “dedicated” line between me and Micheal. This will give us a high quality but expensive voice call. But if I call via skype, my voice will be converted into data packets and will be transferred via skype’s network, to the point much closer to Micheal, such as a sub-exchange in New York. The call will then be routed to a phone network (PSTN). Thus a route from India to New York will be covered by packet switching. This enables IP telephony providers like skype to provide cheap International calling as most of calls are carried over the Internet to the closest point and then terminated to PSTN. Since the call has to enter telephone network at the end point (i.e last mile), IP telephony costs are similar to local calls. If both parties are on Internet, we don’t need to enter telephone network at all and, therefore, free voice calls are possible in the “same network”.

Advantages of IP telephony over conventional phone:

  • Low cost
  • Based on packet switching and hence more calls possible over existing network
  • Not based on location, only depends on the location of person you are “calling to”
  • Good for mobility, you just need an Internet connection

It sounds like IP telephony is a hero in the communications world. Is it?


IP telephony depends a LOT on the quality of your Internet connection. Quality doesn’t simply mean the raw download speeds, but also factors like QoS, jitter values, overall latency, codecs used, etc. These factors make IP telephony suitable ONLY for very good quality Internet connections. Apart from that, many countries (including India) do not yet allow IP telephony. Therefore, your IP telephony calls are routed to these countries over conventional leased circuits – making it an expensive deal. We can’t really compare the ease of using a “telephone” with a headphone-based skype call. IP telephones are improving, but the technology is new and overall quality suffers.

Why do providers like skype claim better quality calls compared to landline phone?

Logically speaking – they are wrong, and in real world, they are mostly wrong! A VoIP call still isn’t as good as a leased circuit-based phone call. Providers like skype can claim better quality because they call it “digital sound”. PSTN is an analog technology (i.e., the link between the PSTN switch and your home phone is analog) and can get  noises, etc. which isn’t the case with VoIP calls. But to be honest, VoIP itself has so many quality issues, that we can’t really say that it provides the best quality.

So where does the future lie?

The future lies in IP telephony. No doubt!
The biggest problem with IP telephony, as stated, is quality of Internet itself. As we are advancing, more and better networks are being developed with low latency and guaranteed QoS. Also, the “softphones” are being replaced with cheap IP phones, making VoIP independent of computer.

I hope this explains IP telephony.

Thanks for reading!

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