VoIP stands for Voice over Internet Protocol which refers to calls that traverse networks using Internet Protocol. The voice stream is broken down into packets, compressed and sent toward its final destination by various routes (as opposed to establishing a single, ‘permanent’ connection for the duration of the call as with traditional phone line), depending on the most efficient paths given network congestion, etc. At the other end, the packets are reassembled, decompressed, and converted back into a voice stream by various hardware and software elements, depending on the nature of the call and its final destination.

For an illustration of how VoIP works click here.

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