VoIP Phone Systems: A Guide

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“VoIP” simply stands for Voice Over Internet Protocol and means the use of the internet for telephony. It’s the basis of many modern phone systems and allows voice calls through well known apps and services. At Gradwell, we’ve had almost 20 years of experience in supplying and supporting the technology to over 8,000 customers nationwide and beyond.

What is VoIP?

Ever used Facebook’s call function? That’s VoIP. FaceTime or FaceTime Audio? VoIP again. Skype? Well, you get the idea.

VoIP phone systems allow you to make low cost calls over the internet; using a multitude of different networks and operators, you can connect with members of staff, clients and customers across the globe both cost-effectively and efficiently.

VoIP phone system example

There’s very little to get to grips with when making a VoIP call – you dial a number, and connect through to the person(s) on the other end – most of the time you won’t even realise the difference!

So what’s the point? Well, VoIP is incredibly cheap (sometimes free!), usually faster, more reliable and, what’s more, affords numerous flexible features.

Back in the early days of VoIP, the unreliability of dial-up connections meant that landline calls were highly superior – VoIP was beset by poor audio quality and high drop rate.  However, with modern internet speeds, including Fibre Optic broadband and Leased Lines, VoIP phone systems far surpasses landline connectivity in quality and innovation.  If you run a business, you know how beneficial this is: vital sales calls, multi-partner conference calls, being available for your customer or client when they need you the most. 

VoIP can also be a great addition to your home – in fact, it may become essential, with Openreach planning to switch off their ISDN network by 2025, migrating nearly all UK landlines over to a SIP trunk -based VoIP service.

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What are the different types of VoIP phone systems?

VoIP as a technology exists to power calling. Typically a business user will come across it in the following ways:

Mobile applications

These include Skype, WhatsApp, Facebook Messenger, Facetime and any other voice application designed to run primarily on a mobile or tablet device. This also includes mobile apps for business communications, like Slack, Zoom and Microsoft Teams.

On-premise IP PBX systems

An IP PBX is essentially a phone system that uses VoIP to place and receive calls. Traditional PBXs used analogue connections, whereas IP PBX systems use internet connections and SIP Trunking (or alternative technology) to route calls to and from the traditional phone networks. On-premise refers to the fact that the system is housed or managed internally. This approach requires more up-front spend (capital expenditure) as well as in-house expertise. These systems will also need a SIP Trunk provider to function.

Hosted PBX systems

There are many names for these systems including Cloud Hosted PBX, Hosted Voice, Cloud Calling and so on. Hosted PBX systems are cloud-hosted, meaning the provider takes care of all functionality, security, updates and delivery.

All the user has to do is configure the setup of their system and users as they see fit. In many cases, the provider will even pre-provision phone hardware for you. Hosted systems are becoming increasingly popular, particularly for small businesses, as they require almost no capital expenditure or in-house expertise.

With COVID-19 changing the way that businesses operate, there has never been a better time to think about a cloud PBX.

At Gradwell, we offer two types of hosted phone systems:

Wave: for smaller businesses who want an affordable VoIP system with fast setup

3CX: for businesses that want a fully-featured phone system with customised setup

How VoIP works

How does VoIP work?

But how does this differentiate from traditional phone calls? First, we’ll need to debunk some jargon:

In terms of landline calls (or ISDN and PSTN, to give the two types their technical names), VoIP bypasses the national landline network’s copper wire by using data packets of information (usually audio) transmitted across a network.

These IP packets are received over the packet-switched network, and ‘de-packetised’ as the voice you hear through your VoIP endpoint – the technical term for a VoIP desktop phone, VoIP mobile phone, soft phone application (VoIP Software), or other receiver.

Mobile phones operate calls through connection to the PSTN, maintained via a terrestrial network of base stations.

When you use VoIP, your voice is converted into digital information which is then transmitted in as data over the internet, unlike the way traditional phone lines work via a local phone provider.

For business phone systems, a Private Branch Exchange (PBX) refers to the main piece of tech that routes all your calls, using Session Initiation Protocol (SIP) in SIP trunks to make those connections. Modern PBXs are also called IP PBXs to indicate they use VoIP, rather than analogue connections (although now this is often assumed).

Your PBX can be a physical bit of hardware, run and maintained by you (or your IT department); however, with modern cloud solutions, your VoIP provider can usually run your PBX via the cloud – essentially a phone system combined with Software as a Service (SaaS). This allows you to control your system with a personal online control panel, resulting in instant access to your add-ons and personal features, as well as a real-time overview of your business telecoms.

An Inter-Asterisk eXchange (IAX) is an alternative to a PBX that involves a different level of authentication. In basic terms, the two can be compared to petrol and diesel fuel – they do the same job, but in different ways.

What are the benefits of VoIP?

Talk anywhere

With VoIP, you can talk to anyone, anywhere as long as you have an internet connection. This means, with the right provider, you can choose any number and make and receive calls with it from anywhere in the world. This is particularly common with small businesses who want a global footprint. Remote extensions are usually standard with VoIP, PSTN extensions are expensive when using PSTN, as additional dedicated line installs are needed.

Disaster recovery

VoIP services are perfect for protection from disasters as all data and functionality is provided in the cloud. Gradwell’s hosted VoIP service offers a comprehensive disaster recovery service, including remote access to your system, cloud backup, and rerouting to business mobiles.

Cost savings

Ultimately, the outstanding benefit of VoIP is the price. Not only is there the capacity to conduct a variety of free calls, but the monthly costs are phenomenally lower. The average business line rental for PSTN is almost 4x times greater than the VoIP equivalent. As bandwidth is utilised efficiently, there is less wastage – one internet connection is all that’s necessary to transmit all voice information.

Unified communications

Using data connections for voice creates an opportunity to unify communications technologies into fewer systems. With something like Direct Routing, Microsoft Teams combines chat, file management, video and voice calls into one application.

What features do VoIP phone systems include?

A VoIP phone system provides you with the unique opportunity to take advantage of a wide variety of additional services.

Call recording: Record both inbound and outbound calls, often including the ability to link with a CRM system and contact records

Custom hold music: Because no business wants to use exactly the same hold music/message as everyone else…

Intelligent call routing: VoIP allows you to quickly change call routing behaviour based on conditions such as time of day, location of call and more.

Virtual receptionist: Also known as Interactive Voice Response or IVR, this allows a user to enter options via voice or keypad, making answering a high volume of calls far more efficient.

High quality audio: Often overlooked, high quality internet connections like leased lines mean greater bandwidth for calling, which mean far higher call quality than traditional analogue phones.

Voicemail to email: A lifesaver for a mobile workforce, VoIP systems can send recordings of voicemails to email (and other applications), sometimes even with text transcription.

Multi-device access: The obvious but crucial benefit of VoIP. Access the same number for inbound and outbound calling, no matter where you are in the world, on any device with an internet connection.

What equipment do I need?


If you opt for a physical (on premise) PBX, you’ll need a location at your business to house the PBX, as well as actually purchasing the PBX.

A VoIP phone system may be the most obvious bit of hardware that you may need; these are phones designed specifically for VoIP networks, and come in a variety of formats. Whether they’re desktop, cordless or conference phones, you can guarantee a stable, high-quality connection.

You may wish to invest in headsets (both wired and wireless), or other accessories, including DECT clips and specific receivers.

Adapters work over an IP network, connecting analogue phones and fax machines to a VoIP network. A great choice for any business with a set of analogue phones already at its disposal.

Software Phones, or Softphones are downloadable applications that live on your computer or mobile device. They usually consist of a keypad for making call, plus numerous other VoIP functions, such as call recording.

Softphones such as Zoiper can be downloaded and utilised for very low cost – a great way to integrate your communication solutions as an alternative to physical VoIP phones. One service in particular called 3CX has a very sophisticated soft-phone, and comes as standard with the solution.

PBX Alternatives

If you choose to go with a hosted PBX service, the provider will house and service the PBX at a monthly fee; many customers opt for this, as maintaining an on-premise PBX can take a lot of time and technical know-how.

A Virtual PBX is a possible third option. While it lacks some of the functions of a full hosted PBX, the costs are substantially lower, and the use of SIP Trunking means that calls can still be routed appropriately. With the advent of cloud systems, a virtual PBX may be a more appropriate solution in the future.

Internet Connection 

You’ll need a good-quality internet connection to support a VoIP service, particularly for high quality, reliable calls. FTTP and Ethernet connections, like Leased Lines are well worth looking at.

VoIP phone system example 2

How to set up VoIP for your office

To start the initial set-up, you first need to check your bandwidth and assess what you need.

Checking your bandwidth basically means your internet connection. You need to do this to ensure that your call quality and speed will be up to scratch and that your VoIP phone system will cover everyone who needs it in the office. Do this by running an internet speed test – simply type this into Google.  

To assess what you need is relatively simple. How many people will be using the device? How many lines will you need? Can your internet support the call volume? Once you figure this out, you’ll have a general idea of the features you want and can explore any add-ons, like other media communications. 

Next, choose a provider that is right for you. Do a bit of researching or call up providers and find the deal and package that is right for you. It’s also a good idea to choose a provider that has good customer service. If anything were to go wrong with your VoIP system, you want to be able to contact someone that can help you fix the problem. Once you decide your provider and system, you can order the phones and necessary software. 

Finally, you need to set up and configure the systems. Most of the time, you can plug your phone into the ethernet system, configure the settings on the phone and you’re ready to go. If you’re considering buying with Gradwell, we will set everything up for you! 

Glossary of VoIP terms


ATA stands for Analog Telephone Adaptor. It is a type of hardware that converts audio, video and data signals into IP packets, that can then be sent over the internet. It connects standard phone lines to high bandwidth lines to make VoIP calls. 


Bandwidth is the maximum rate of data transferred during a given time period. The data transfer rate is measured in bits per second. So, a high bandwidth means that data is transferred at a fast pace, whereas a low bandwidth means it is transferred at a slow pace. 


codec is a device or program that converts data packets of a segment of software or hardware, so it can be delivered, received, used, stored and encrypted. They do this by compressing or decompressing and encoding or decoding data packets. It is best used in voice and video services. 


The ethernet is a system that connects computer systems to form a local area network. Essentially, it is a family of computer networking technologies.  


A gateway is a router in a computer network that is a key stopping point for data on its way to or from other networks. It communicates and sends data back and forth and blocks harmful things from infiltrating your network. 


IP stands for Internet Protocol, meaning a communications system that routes data from one computer to another over the internet, using a set of rules and formats. You may have also heard of an IP Address. An IP Address is a fixed or dynamic number that is associated with an internet-enabled device. It is essential to have an IP address, to connect different devices over the internet and for voice and data communications. 


LAN stands for Local Area Network. LAN connects computers to each other within a group or area, for example, offices and schools. 


PBX stands for Private Branch Exchange. It is a private telephone network exchange and well-known business telephone system. Those who use a PBX phone system can communicate within their company and outside, using communication channels like VoIP or ISDN.  


PSTN stands for Public Switched Telephone Network. It is the system that has been in use since the 1800s and is essentially, the world’s combined circuit telephone network. It has developed from being an analogue system to completely digital. 


SIP or Session Initial Protocol is a system that transmits voice and video information across a data network. It is involved with the VoIP process, allowing VoIP users to take advantage of communications flexibility and shared lines. 


A softphone is a type of software for desktops, tablets and laptops that provide VoIP call services. Rather than being a physical phone, it is on a computer. A softphone receives input from a microphone and outputs through speakers or headphones. 

VoIP conference call

Frequently Asked Questions

What is a VoIP phone system?

VoIP is a phone system (or “PBX”) that uses the internet to place and receive calls.

Is VoIP free?

Costs are hugely reduced by using VoIP for business, and calls between internal numbers (in any location) are free as no connection to the traditional phone networks are needed.

Does VoIP have any downsides?

VoIP is an extremely effective technology and far outperforms analogue telephony. One obvious downside of using internet connections to place calls is that if your connection goes down, you won’t be able to make calls at all. This is why resilient and secure internet connections are very important to modern businesses.

Why would businesses use a VoIP number?

The most common benefits of using VoIP include cost savings and being able to make and receive calls from numbers from anywhere in the world and on any device.

Is VoIP better than a landline?

In most cases, yes. Good quality internet connections mean modern VoIP calls are much clearer than traditional landlines.

Does VoIP require a special phone?

No. Although IP (or SIP) enabled phones are extremely widespread, you can use an ATA (Analogue Telephone Adaptor) to connect analogue phones to VoIP systems.

Can I use my mobile phone with VoIP?

You can use VoIP on your mobile phone, given you have the right app and the right VoIP provider. It routes your calls through the internet rather than a phone connection, so you need a package that will allow you to do that.

Who can I call on my VoIP phone?

Your VoIP phone can call any number in the world, whether it’s for business or personal, local or long distance. The main difference between a VoIP phone and a regular phone is the way the information travels, but essentially, VoIP can do anything a normal phone can do. 

Can I keep my number?

Yes. VoIP providers allow number portability, where you can keep the same number you had with your regular phone provider. You can also port or transfer over any saved numbers you have. This process is called number porting.

Will VoIP affect my Internet speed? 

The most important aspect of VoIP is having an internet connection – it won’t work otherwise! You need to assess your internet speed before you install a VoIP connection, to ensure your connection and speed will work with VoIP and that the two won’t affect each other. If you have a fast internet connection, VoIP will work perfectly and won’t affect your internet speed.

How secure are VoIP calls?

VoIP transfers your data over the internet, so it makes sense why people worry about security. VoIP providers ensure your network is fitted with the right security measures, like Session Border Controllers, which protect your data and monitor what goes in and what comes out of your network.

What does VoIP have to do with the ISDN switch off?

ISDN or the Integrated Services Digital Network is the most popular way to make phone calls, video calls and other services across the world. However, ISDN is set to be switched off in 2025. The main reason is because it’s an outdated system. Instead, telecommunications like VoIP have come to the forefront. VoIP is a modern and progressive upgrade that only relies on an internet connection. It is also less expensive, requires fewer physical lines and is more scalable and flexible. phone 

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