In simple terms, VoIP converts telephone calls into computer data that travels over networks such as the Internet to the destination just like any other piece of data. When the voice is converted into data it is split into small VoIP data packets as the call continues. Each packet  contains only a small portion of the voice to minimise any delays in transmission. The VoIP packets are individually routed over the data networks to the destination point where they are reassembled in the correct order and converted back to voice.  For calls to standard landlines or mobiles/cell phones, the VoIP packets are reassembled by VoIP service providers such as EWC and the  final element of the call is completed over traditional telephone lines or direct to mobile/cell phones.

Calls between two VoIP devices such as IP Telephones or VoIP Gateways can be carried completely over the internet with no call related costs. To achieve this it is important that both devices operate under the same VoIP protocol such as SIP and use open source devices. In this event, even when the two devices are configured for different VoIP Service Providers it is possible to make VoIP to VoIP calls at no charge. When calls are from VoIP to a traditional telephone or a cell/mobile phone, using VoIP enables the call to be routed to the VoIP Providers own switches free of charge even when they are in a different country. Calls are then terminated through the traditional phones networks, but by using least cost routing significant call savings can be made, particularly in highly regulated or high cost markets. For this reason,  VoIP has been used  extensively in markers such as the Middle East, Latin America and the USA where international calling costs remain high.

For more competitive markets such as the UK and many European countries, the call savings from using VoIP for calls to landlines or mobile/cell phones  are minimal. For instance, in the UK savings are no more than 0.5 pence per minute compared to an equivalent service through a traditional phone. The benefits in these markets relate much more to the additional capabilities of VoIP including free calls between locations, even overseas offices, reduced spending on expensive landlines or ISDN connections and being able to answer calls to a local telephone number in one country with a phone in a different country. To achieve these savings it is critical to use a service provider such as EWC who can support your business needs across international locations

Calls are converted into VoIP by either a special program such as X-Lite or Zoiper run on a PC (PC to Phone); by a VoIP device such as a Grandstream IP Phone, VoIP enabled mobile/cell phone, Sangoma PCI Cards or a  VoIP Gateway. Call quality is not just dependant on the customers equipment, the VoIP service providers own capacity and the  carriers it uses to complete the call is critical to ensure the best quality VoIP calls. Calls between two PC’s can be made without using a VoIP service provider as long as compatible software or VoIP devices are used at  both ends to enable a call to be made. The advantage of using Business VoIP service providers is that they simplify the process, enable users to connect to many other VoIP users; enable calls to traditional landlines and mobile/cell phones through their VoIP networks; offer support on configuring hardware and software and provide other services such as IP PBX's' toll free numbers and calls from many different countries.

In the early days of VoIP dial up internet connection limited bandwidth to 56K. This lack of bandwidth, coupled with the use of a PC, severely limited the quality of the calls, creating a poor reputation for consumer VoIP. The increased penetration of broadband and the use of standard telephones has had a major impact on call quality, opening the benefits of VoIP to the business world. At the same time, the ability to take incoming calls with local numbers in many countries provides the opportunity for business users to replace many of their traditional telephone lines, or indeed whole office telephone systems, with VoIP services, giving substantial business savings and transforming way a business communicates.