What is a VoIP network? Setup, requirements, benefits

Voice over Internet Protocol (VoIP) is a system allowing users to make voice and video calls over the internet instead of telephone lines. Since they began appearing in the mid-1990s, VoIP systems have evolved from a low-cost alternative to long-distance calling into a foundational element of business communications, enabling scalable, internet-based voice systems for both internal and external use.

The VoIP market is projected to grow from $144.77 billion today to $326.26 billion by 2032:

“The convenience and affordability of mobile VoIP services have made them a popular alternative to traditional landline phone connections. The advancements in mobile applications, cloud-based communication systems, and data encryption are set to boost the market growth over the forecast period.”

VoIP networks’ advantages over traditional phone lines include cost savings, scalability, and the ability to infuse your network with programmable, intelligent voice layers. The Telnyx Global VoIP service enables businesses to take full advantage of VoIP network’s potential thanks to Telnyx’s private, carrier-grade network and the next-gen capabilities of the Telnyx Voice API and Voice AI tools.

This post will dive into everything you need to know about VoIP networks, covering how they work, how to set one up, and hardware requirements. We’ll also address common issues, how to troubleshoot them, and the importance of choosing the right VoIP network provider.

What is VoIP?

With VoIP, your voice is first captured and converted into digital data. That data is then broken into small units called packets, each containing a portion of your voice along with instructions on how to reassemble it.

These packets travel independently across the internet and are reassembled at the receiving end, where they’re converted back into sound. This method enables high-quality voice and video calls from anywhere with an internet connection.

In contrast, traditional phone calls were connected through the Public Switched Telephone Network (PSTN), which transmits analog audio signals through copper telephone cabling. VoIP replaces that fixed circuit system with a flexible, packet-switched network that routes data more efficiently.

What is a VoIP network?

VoIP calls connect through a private network operated by your telecom carrier, the public internet, or some combination of the two. While traditional phone systems use a circuit-switched network, a VoIP network leverages the internet.

VoIP networks consist of two different types of networks:

1. A local area network (LAN) that connects VoIP-capable devices to the telecom carrier.
2. A wide-area network (WAN) operated by the carrier that transmits audio signals to the call recipient’s device.

How a VoIP network works

The LAN is the same type of network you’d use to connect computers to each other at home. When you make a call from a VoIP phone number, the call’s data packets are transmitted over digital networks. Once the call data leaves your local VoIP network, it moves onto your carrier’s VoIP network, the WAN.

The connection path looks like this:

VoIP device > Local VoIP network > Carrier WAN > Receiving local VoIP network > Receiving VoIP device

You and your development team have direct control over your local VoIP network. However, your carrier’s network also affects how well your VoIP service works. While you should always monitor your own LAN, it’s also wise to evaluate your VoIP provider and learn about their network before signing up for their VoIP service.

Components of a VoIP network

Outside of LAN and WAN, there are several other components that make up a VoIP network:

VoIP phones and softphones

The devices your team uses to make and receive calls. VoIP phones are hardware endpoints that connect to your network via Ethernet, while softphones are software-based apps that run on desktops or mobile devices.

VoIP servers or IP private branch exchanges (PBXs)

These systems manage call routing, user authentication, voicemail, and call features like forwarding and transfers. If you’re running an on-premise setup, you’ll need to configure this yourself. In hosted VoIP solutions, these functions are handled by your provider.

Network equipment (routers and switches)

Business-grade routers with support for Quality of Service (QoS) can prioritize VoIP packets to reduce interference and dropped calls. This equipment directs voice traffic across your LAN.

Session border controllers (SBCs)

Common in enterprise or SIP trunking environments, SBCs sit at the edge of your network to manage and secure VoIP traffic. They help control media flows, enforce security policies, and ensure interoperability with your carrier’s network.

The network components support reliable call quality and give your business flexibility to scale, integrate with intelligent tools, or transition from legacy systems.

Benefits of using a VoIP network

Let’s take a look at some of the many advantages of using VoIP technology over traditional phone systems.

Savings

VoIP calls are made over the internet, meaning there are no long-distance charges or per-minute fees. This pricing model can result in significant savings for businesses that operate at a global scale.

Setup savings are also considerable. Landlines require a PBX system, adapters, routers, phone sets, copper wire, and more. In comparison, VoIP networks require relatively little equipment. Coupled with the pay-as-you-go plans providers typically offer, VoIP is the obvious winner in terms of cost-effectiveness.

Advanced features

VoIP systems typically offer features such as call forwarding, voicemail, caller ID, and call waiting. You can access these features via a traditional landline system, but they cost more and require more equipment and setup than with a VoIP solution.

Flexibility

With traditional phone lines, you’re tied to a specific location and phone number. With VoIP, you can make calls from anywhere in the world as long as you have an internet connection.

This flexibility means you and your employees can work remotely without having to worry about missing important calls or racking up long-distance charges.

Programmable and intelligent voice layers

A reliable VoIP network opens the door to next-gen capabilities. Telnyx’s Voice API allows businesses to automate common workflows like routing calls to the right department, triggering appointment reminders, or deflecting support calls with IVRs.

On top of that, Voice AI transcribes conversations, detects keywords, and can summarize calls. These features make it easier for businesses to improve customer support, conduct compliance audits, and compile actionable analytics.

VoIP network requirements

Before you can reap the benefits, you’ll need to make sure your existing network can support the specifications required by VoIP. You’ll need the following infrastructure in place:

• Broadband internet is the baseline prerequisite.
• 115Kbps connection speed per VoIP line is recommended to account for network overhead and variances in network performance.
• Network security and encryption must be in place to protect your local network, ideally through certificate-based authentication
• A hardwired connection for VoIP devices ensures you don’t have to transition from a WiFi network to a wired network later on.

Understanding these requirements will help you determine which internet connection plan you’ll need and what internal networking components will be best for setting up your VoIP network. Once you know what you need your functioning network to be capable of, you can move on to setting it up.

Setting up a VoIP network

VoIP network setup is a straightforward six-step process.

1. Decide on your setup type

The first question to ask during VoIP network setup is whether an on-premise or hosted setup is best for your business. This decision will determine the equipment you need and the amount of setup required.

If you opt for a hosted solution, your VoIP provider will take care of the hardware and software for you. An on-premise system will require you to set up the hardware and software yourself.

2. Get the right equipment

If you're using a hosted solution, you'll need to purchase VoIP phones for your employees. These phones are designed specifically for use with VoIP, so they're different from traditional landline phones.

If you're setting up an on-premise system, you'll need to purchase a PBX, as well as VoIP phones, Ethernet switches, and routers. These devices will help to connect your phones to your network and ensure everything runs smoothly.

3. Set up your network hardware

Typically, connecting the hardware is simply a matter of plugging in all your routers, switches, and access points. Often, the configuration process is automated. If not, most manufacturers provide configuration guides with their hardware.

4. Connect to the internet

Once your equipment is powered up, you can connect your local network to the internet and check your internet speed. Make sure your internet bandwidth meets your business’s requirements based on the number of VoIP lines you plan to connect.

5. Test your connection

If your internet connection is slow, there could be a problem with your local network. Even if your internet connection seems fine, it’s still wise to test your internal network to ensure it won’t be a bottleneck for making and receiving calls.

6. Connect and configure your VoIP devices

Connecting VoIP phones is usually as simple as plugging in an Ethernet cable. The process for configuring your VoIP phones varies by manufacturer, so you’ll need to consult their setup guides when using their specific hardware.

Choosing the right VoIP provider

Even though VoIP calls connect through the internet, you still need a VoIP service provider to purchase VoIP phone numbers and place calls. When selecting a provider, there are three primary criteria to consider.

Private network

The best VoIP carriers operate their own IP (Internet Protocol) network to give you the best call reliability and quality. If your carrier has its own network, it’s also much easier for them to help you troubleshoot connection problems.

Global number access

First, make sure the VoIP carrier has phone numbers for the geographic regions you need to call. Then, find out how long the process of porting numbers from your old carrier will take. Some carriers use archaic porting processes that can put your phone numbers out of commission for weeks. A modern carrier should be able to port phone numbers much more quickly.

Control panel

Your VoIP carrier’s control panel should make it easy to provision new VoIP numbers from your carrier and configure your existing VoIP numbers. The last thing you need is to fight with your carrier’s user interface whenever you need to make changes.

Telnyx’s global, high-quality VoIP service delivers on all three criteria. Our global IP network delivers clear audio with minimal latency in over 140 countries. We offer 24/7 support and allow you to port or buy local numbers in fewer than five minutes.

Telnyx’s Voice API and the Telnyx Voice AI stack also allow your team to develop the programmable, intelligent voice layers that create stronger automation and more actionable insights. They’ll also make it easier to anticipate and neutralize some of the challenges that come with standing up a VoIP network.

Common VoIP network issues and troubleshooting

Like all network technologies, VoIP can be susceptible to various issues that can affect the quality of your business’s communication capabilities. These are some of the most common VoIP problems:

• Latency is the delay in the transmission of voice data over the network and can result in a perceived delay in speech, making it difficult to have a natural conversation.
• Jitter is variation in the delay of voice data transmission over the network, causing voice quality to fluctuate.
• Packet loss occurs when some of the voice data packets aren’t successfully sent over the network, causing gaps in the conversation.
• Bandwidth issues occur when VoIP connections don’t have the speed to function properly.
• Network congestion can cause delays, packet loss, and other issues that can affect the quality of the conversation.

On top of all that, firewalls and NAT (Network Address Translation) devices can sometimes interfere with the transmission of VoIP network data. To prevent these issues from compromising the quality of communication, it’s important to have a reliable, stable network infrastructure.

Proactively monitoring your network and configuring it to support voice traffic can go a long way toward maintaining call quality.With the right tools and knowledge, it's possible to ensure smooth communication within your organization.

Monitor your network regularly

By regularly monitoring network traffic, you can determine if there are any bottlenecks or congestion points that might be causing quality of service issues. You can also ensure your network is secure by monitoring for any suspicious activity.

Create and implement quality of service (QoS) policies

QoS policies can help you prioritize traffic on your network, ensuring voice traffic is given priority over other types of traffic. This can help you prevent latency and jitter.

Invest in the right tools

Network diagnostic tools can help you identify the source of problems on your network. This will empower your team to take targeted actions to troubleshoot network issues..

Get started building your VoIP network

VoIP networks offer stronger connection quality than calls made over the PSTN. VoIP phone numbers are also easier to purchase and configure than traditional landlines. And VoIP offers businesses the ability to integrate their systems with AI tools that can enhance real-time conversations and facilitate automation.

However, it’s important to remember that your telecom carrier’s network and support is a critical piece of your VoIP connection. No matter how good your local network is, your VoIP calls will be unreliable and of lower quality if your carrier service is unreliable and low-quality.

Telnyx Global VoIP provides everything businesses need to stand up a VoIP network, along with a suite of tools that can let you take full advantage of VoIP’s potential:

• Our private, global, multi-cloud IP network ensures minimal latency and maximal security.
• Telnyx Voice AI provides a developer-focused toolkit for building voice agents.
• The Telnyx Voice API allows developers to manage and program every aspect of your voice call logic.
• Our team of experts is on hand to offer 24/7 support.
• Our network has numbers available for purchase or porting in over 140 countries
• Our Mission Control Portal puts the power in your hands, allowing you to monitor and manage your communications processes with a user-friendly interface.