How Do IP Phone Systems Work?

Every business wants a smooth, easy and cost-effective way to communicate with employees and customers. Thanks to the internet, there are a lot of different ways to do this now. These systems originated in 1995 as a way to save money on long-distance phone calls and have gained more popularity over the years. This has resulted in a lot of business swapping from using landline or mobile phones to using IP phones.

Here’s a rundown of what it is and how the system works.

What is an IP phone?

An IP phone system looks just like a normal phone, only it uses the internet to make phone calls rather than a phone network. There are many reasons using IP phone systems could benefit you and your business, especially if you don’t have any phone lines connected.

If you use programs like Skype or WhatsApp, or even wi-fi calling to make and receive phone calls, then you’re already using a form of IP phone calls. A system is different because each digital phone has a separate phone number so people can make calls directly to that system, whereas these other forms use an existing mobile number. They can include some of the same features as a traditional business phone has, such as voice mail, call forwarding, and hold music.

How does the system work?

It works fairly similarly to an MP3 player, in that it converts analog to digital. The IP phone works by converting your voice into a digital signal and compressing it. It then sends it to the person on the other end using your internet connection. It’s then uncompressed and is turned back into sound that others can understand and hear through the phone. 

Having good quality and high-speed internet is key when using this system. If your internet drops out, then you won’t be able to make or receive any phone calls. Your data is stored securely on the network, which may mean that the chances of getting hacked are less likely. 

Why should you incorporate the system into your business?

There are many reasons why you might want to include an IP phone system in your business and it’s something that should be considered. If you already pay for good internet, then it may save you money by using this system because you won’t have to pay for the phone network service as well as the phones and internet. Instead, the only extra cost to the business is the system itself. 

With most people working from home, having an easy way to communicate is essential. These systems don’t have to be connected to a physical phone, and instead are installed on laptops and computers. The program may look like a real phone on the screen and will be very easy for anyone to be able to use because it’s the same as a traditional phone. 

If your employees have to make a lot of long-distance phone calls, then calling them over the internet will save you money and allow your employees to talk for as long as they need to effectively perform their job.


An IP phone system can be greatly beneficial to your business because it can save you money on making phone calls, especially long-distance ones. They work by taking a recording of your phone, compressing it, and sending it via the internet to another IP phone. This can make it easy for your employees to make the phone calls they need to perform their job well. 

Chris Z