IP Telephony, also called 'Internet telephony', is technology that enables routing of voice conversations over the Internet or a dedicated Internet Protocol (IP) network instead of dedicated voice transmission lines. This allows elimination of circuit switching and the associated waste of bandwidth. Instead, packet switching is used, where IP packets with voice data are sent over the network only when data needs to be sent, i.e., when a caller is talking.

Advantages over traditional telephony:

• VoIP innovation progresses more quickly - at market rates rather than the slow pace of the multilateral International Telecommunications Union (ITU) committee process.
• Lower costs per call, or even free calls, especially for long-distance calls.
• Lower infrastructure costs: once IP infrastructure is installed, little to no additional telephony infrastructure is needed.
• New advanced features.
• A higher degree of reliability and resilience.
• Future proof" hardware, since functionality is software (protocol) based.

Voice over IP traffic may be deployed on any IP network, without an internet connection, for instance on a LAN inside a building.

The protocols used to carry the signal over the IP network are commonly referred to as Voice over IP or VoIP protocols.

There are three most common ways to use VoIP:

• The simplest and most common way is through the use of a device called an ATA(analog telephone adaptor).
  The ATA is an analog-to-digital converter. It allows you to connect a standard phone to your computer or your Internet connection for use with Voice IP.
  
  
• Another way to use VoIP is IP Phones. Instead of having the standard RJ-11 phone connectors, IP phones have an RJ-45 Ethernet connector. IP phones have all the hardware and software necessary right onboard to handle the IP call.
• The easiest way to use VoIP is computer-to-computer calls. There are several companies offering free or very low-cost software that you can use for this type of VoIP. All you need is the software, a microphone, speakers, a sound card and an Internet connection.