Insights & Resources11 min readPublished 01/20/2021

What is a VoIP Network and How Does it Work?

A VoIP network is the technology that allows for calls to be placed over the internet rather than a more traditional phone line. Setting up your own VoIP network offers a lot of advantages, here's what you need to know to get started.

Fiona McDonnell

There’s no way around it, if you’re using VoIP numbers, you’ll need a VoIP network. In most cases, your VoIP network is an internal network that connects your VoIP capable phones to your telecom carrier’s network.

It’s not all that difficult to set up a VoIP network on your own, so long as the wired infrastructure is in place. Here’s what you need to know to build your own VoIP network.

What is a VoIP Network?

There are two parts to a complete VoIP network: a local network that connects VoIP capable devices to the telecom carrier, and a WAN (Wide Area Network) operated by the carrier. The WAN is the network that transmits the audio signal to the call recipient’s device.

Most of the time, the term “VoIP network” refers to the local network that connects VoIP phones to the carrier network. The local network is the one that you can build yourself, and that you have the most control over. But it’s worth understanding how the entire system works.

How a VoIP Network Works

The internal network that connects your VoIP devices to your carrier network is known as a LAN (Local Area Network). It’s the same type of network that you’d use to connect computers to each other at home.

The LAN that connects VoIP phones to the telecom carrier is usually built on an ethernet infrastructure. Most commercial buildings are outfitted with the ethernet cabling that you need to build a local VoIP network. But it’s relatively easy to run ethernet cable, if you need to.

When you make a call from a VoIP phone number, the VoIP device converts the audio signal into data packets that can be transmitted over digital networks.

Once the call data leaves your local VoIP network, it moves onto your carrier’s VoIP network..

Modern VoIP networks are packet-switched networks that transmit audio signals as data packets. VoIP calls connect through a private network operated by your telecom carrier, the public internet, or some combination of the two. The call audio data is converted back into an audible signal by the receiving VoIP device.

Traditional phone calls are connected through the public switched telephone network (PSTN). The PSTN transmits analog audio signals through copper telephone cabling. The PSTN is still around, and has its place in certain use cases

Ideally, your telecom carrier will own and operate their own, private packet switched network. This gives you the best call quality and reliability. Connecting calls through the public internet involves many intermediary networks that your telecom carrier does not control, which compromises call quality, reliability, and security.

But, regardless of how your telecom carrier connects calls, the connection path looks like this:

1VoIP device > Local VoIP network > Carrier WAN > Receiving local VoIP network > Receiving VoIP device

You have direct control over your local VoIP network. But also keep in mind that your carrier’s network affects how well your VoIP service works. So it’s wise to evaluate a VoIP provider and learn about their network before signing up for VoIP service.

Adding VoIP to an Existing Network

These days, local area networks are so common that you probably already have a LAN that’s capable of connecting your VoIP devices to your VoIP carrier. So the most common scenario for building a VoIP network is that you’ll be adding VoIP capabilities to your existing local network.

Adding VoIP to an existing network is a lot of planning and some implementation. Most of the process is about making sure your network is capable of VoIP communication. Here’s what to do:

Evaluate your network for VoIP viability. If you have broadband internet, you’ll most likely have a strong enough connection for VoIP communication. But more VoIP phones will require more bandwidth. So it’s possible that you may need to upgrade your internet connection if you have a whole lot of phone lines to connect.

Plan on using 100Kbps (0.1 Mbps) of bandwidth for each line of phone service. It’s also a good idea to tack on an additional 15% of bandwidth to account for variances in network capabilities. So call it 115Kbps of bandwidth for each VoIP line you have.

Also, it’s best to only use 80% of your total network bandwidth for VoIP lines. Running at maximum load can cause network congestion, which will negatively impact call quality.

So, before you start connecting VoIP phones to your network, find out how much bandwidth you have, and do a bit of arithmetic to make sure that you have the connectivity you need for high quality, reliable VoIP calling from all your lines.

Check your network infrastructure. A WiFi connection can work for VoIP calling. And there are VoIP phones with wireless capabilities. However, a wired connection is best for VoIP calling. It’s just more reliable.

If your current in-house network is a wireless network, consider replacing it with an ethernet network. You’ll get more predictable performance and better call quality.

But, if a wired network isn’t an option for you, a wireless network can get the job done. Just get the fastest wireless hardware that you can afford. And make sure that your wireless network is encrypted and secured.

Choose a VoIP carrier. Even though VoIP calls connect through the internet, you still need a VoIP service provider to get VoIP phone numbers and make calls.

Make sure that the VoIP carrier you choose has phone numbers for the geographic regions you need to call.

If you have phone numbers that you need to bring over from your existing carrier, 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 faster than that.

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

Lastly, check out your VoIP carrier’s control panel. It should be 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 to your carrier service. Once you’ve selected a VoIP carrier, you’ll need to configure your VoIP devices to connect to your carrier’s network.

Configure your VoIP phones. If your network is capable enough for VoIP communication, all that’s left to do is connect your VoIP phones and set them up.

The setup process varies from phone to phone. Your phone manufacturer most likely has setup guides. There are also setup guides for connecting phones from various providers to the Telnyx network. Once your phones are connected and configured, you should be able to make and receive calls from your VoIP devices.

Ultimately, if you already have a network in place, adding VoIP to that network is mostly a matter of connecting your VoIP devices to that network.

The implementation process is a bit more involved if you need to set up your own network.

VoIP Network Requirements

If you need to build a VoIP network, these are the network specifications that you’ll need to meet:

Broadband internet connection. VoIP calls may not require a ton of bandwidth. But a slow internet connection will cause call quality and reliability issues.
115Kbps (0.115Mbps) worth of connection speed per VoIP line. 100Kbps is enough for a single VoIP line. However, it’s best to add 15% to your bandwidth calculations to account for network overhead and variances in network performance.

Additionally, it’s best to upgrade your internet connection once you’re using 80% of your total bandwidth. Maxing out your connection capabilities causes performance issues.

Network security and encryption. Your telecom carrier should protect your call data for as long as it’s on their network. However, you need to make sure that your local network is also protected. There’s plenty of networking equipment that offers hardware encryption. And there are even more options for security software.

If you have a wireless network, always verify that your wireless network and wireless devices are password protected, as wifi networks are some of the most vulnerable to cyberattacks.

Ethernet connection for each VoIP device. Hardwire connections are more reliable and secure than wireless connections. If you’re building your own VoIP network, it’s wise to use ethernet connections from the start. That way you don’t have to transition from a wifi network to a wired network later on.

There’s nothing wrong with including a wifi connection for mobile devices. But it’s unwise to depend on a wireless network for all your VoIP communication.

Use these criteria to 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, move on to setting it up.

How to Set Up a VoIP Network

If you’re building a network from scratch, there’s likely going to be some hardware installation and cable routing. The good news is that the manual labor will be the bulk of the work. Most modern networking hardware is relatively easy to configure and get connected.

These are the basic steps for setting up your network:

Step 1: Set up your network hardware. Essentially, this is just 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.

If you must purchase new hardware, ensure that your network hardware is capable of IP communication (most network hardware is).

Step 2: Connect your local network to the internet and check your internet speed. Make sure that your internet bandwidth meets your requirements based on the number of VoIP lines you plan to connect.

Step 3: Test your network to ensure that it’s working and has the capabilities you need for VoIP. If your internet connection is slow, it’s possible that there’s a problem with your local network. Even if your internet connection seems fine, it’s still wise to test your internal network to ensure that it won’t be a bottleneck.

Step 4: Choose a VoIP carrier. This is the same as the process for evaluating a VoIP carrier for adding VoIP to an existing network. Check a VoIP carrier’s network, number porting process, VoIP phone number inventory, and control panel before you sign any contracts.

Step 5: 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 will vary from manufacturer to manufacturer. Check out these setup guides if you need help.

Once your network is set up and your phones are connected, you’ll be ready to make calls from your VoIP phones.

Pros of Building Your Own Network

Building your own network isn’t the best option for everyone. But there are benefits to doing the work yourself:

Tailored network. If you build your own network, you can set it up exactly according to your needs. And you can expand your network as you add more VoIP lines.
More control. If you set up the network, you’ll have more control over who can access the network and how the network is configured. Also, you can quickly and easily assess and troubleshoot your network if you have problems.
Cost efficient. You can select the hardware and do certain work yourself. This enables you to better control the costs of your local network and minimizes management complexity.

Cons of Building Your Own Network

May not be an option. If you lease a building or space for your business, it may come with an internal network already installed. It wouldn’t make a lot of sense to put another network on top of the prebuilt network. And the landlord may not want you to do that.
You are your own IT department. If your network is managed by an MSP (Managed Service Provider) or your landlord, you don’t have to fix it when it breaks. You just call whoever is in charge of the network.

If you’ve built your own network, you’ll have to get it working again if it goes down. You may or may not have the expertise to do that quickly.

Not ideal for larger enterprises. If you have a larger business that needs hundreds of phones and VoIP lines, it’s probably best to work with an MSP or PBX provider to set up your internal VoIP infrastructure. It takes tons of work and quite a bit of technical expertise to build very large networks.

Who Should Consider a VoIP Network?

Regardless of whether you build your own local VoIP network or outsource it, VoIP is the future of phone communication. VoIP phone numbers are easier to purchase and configure than traditional landlines. And the connection quality is almost always better than calls that connect through the PSTN.

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 low quality if your carrier service is unreliable and low quality.

Want to be sure that your VoIP carrier will deliver the connection quality you need? A Telnyx VoIP expert can answer all your questions.

Share on Social