A VoIP Internet phone, unlike a conventional phone, sends voice signals over the Internet. These signals bypass the Public Switched Telephone Network (PSTN) when the call is made from one Internet phone to another and is considered broadband phone service. A VoIP Internet phone, unlike a conventional phone, sends voice signals over the Internet. These signals bypass the Public Switched Telephone Network (PSTN) when the call is made from one Internet phone to another and is considered broadband phone service.

However, when the call is made from an Internet phone to a conventional phone, the voice signals journey part of the way over regular phone lines.

On the surface, a VoIP Internet phone works like you'd expect a phone to work. When you pick up the hand set, you hear a dial tone. When you receive a call, the phone rings. To dial a number you use the familiar keypad, and so on.

What's different about a VOIP phone is what's going on with the analog voice signal inside. All VoIP Internet phones convert your voice into data packets and send them through the Internet like e-mail. Some systems like FWD (Free World Dialup) and Skype allow you to make free PC-to-PC calls, without using the conventional phone network at all.

In a big office, the internal telephone system can be based on the VOIP. A VOIP PBX (private branch exchange) connects numerous IP phones (extensions) within the same building or between different buildings. Phone calls between extensions are made using VOIP in this private data network. When phone calls have to be made outside the office, the system connects to the Internet or to a conventional phone network.

Hardware-based VoIP systems use a converter to connect your phone directly to the broadband connection. There is no need to switch on the computer to use this system. Software-based VoIP systems work through your computer. The most versatile VoIP system uses an analog telephone adaptor (ATA) to connect your phone to your broadband connection. VOIP service providers such as Vonage and Packet8 provide you with a pre-programmed ATA to connect to your regular phone and your broadband modem.

However, true VOIP IP phones come with the adaptor function built right in. An IP phone has an RJ-45 Ethernet jack instead of a regular phone jack and connects directly to an Ethernet port on your router. IP phones come in one of three standards: SIP (Session Initiation Protocol), which is the most popular, MGCP (Media Gateway Control Protocol) and H.323. Read more on VOIP protocols in the VOIP Glossary of Terms.