VOIP Technology

Circuit-switched or Time-Division Multiplexed Telephony

Before digital networking with the Internet took off, everyone had to use the "Plain Old Telephone Services" (POTS). These run over a network called the Public Switched Telephone Network (PSTN). The PSTN has been around since the telephone was invented in either analog or digital form using circuit switched technology where the telephone call gets exclusive bi-directional use of a wire - or circuit - while the call is in progress. Because the circuit is exclusive to each conversation, PSTN and private branch exchanges (PBXs) must be sized to cope with peak demand and have enough circuits available for all expected conversations. This is not a flexible approach and results in a lot of infrastructure investment that the telephone companies need to recoup, via the cost of access charges and calls. The Internet has changed this - where data services have driven down access charges and allowed voice to "travel for free" over a multipurpose data network.

Packet-Switched Telephony

Unlike circuit-switched connections, which always require use of dedicated bi-directional circuit for the duration of a call, VoIP technology has enabled telephony and other new and novel features and services to run over fixed and wireless networks including private local area networks. These newer network types use packet-switched protocols. Packet-switched VoIP puts voice signals into packets. Along with the voice signals, VoIP packets include both the sender's and receiver's network addresses. VoIP packets can traverse any VoIP-compatible network. Along the way, they can choose alternate, shared paths because the destination address is included in the packet. The routing of the packets is not dependent on any particular network route which means the network provides can provide a reliable service at a fraction of the cost of circuit switched providers.