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What is VoIP Phone and How Does it Work? – Beginner’s Guide

Simplify your phone communication with a cost-effective, secure and reliable virtual phone solution

CallHippo Blog image
Rohit Rajpal

Senior Writer:

green tickDate: August 23, 2023

As the world is getting more digitized with the advent of the internet & newer technologies, an increasing number of business enterprises are leveraging this change by cutting costs and making the shift from traditional phone systems to more advanced Voice over Internet Protocol (VoIP) phones.

If you’re also looking to make a decision to change your business phone system to a VoIP phone, this article explains everything that you need to know about what is VoIP phone, How it works, and the terminology of VoIP phone systems.

VoIP (Voice Over Internet Protocol) is a new-age technology that involves the transmission of voice and multimedia content over Internet Protocol (IP) networks.

Historically speaking, VoIP was referred to as the use of IP to connect private branch exchanges (PBXs). However, the term is now interchangeably used with the IP telephony system. This revolutionizing technology to make and receive calls has been in the mainstream and still going strong for almost 10 years now.

What are VoIP Phones?

The VoIP phone allows you to make voice calls using a broadband Internet connection instead of a regular (or analog) telephone line.

It is enabled by a mix of technologies that are used to deliver voice communications over the internet, local area networks, or wide area networks (so you can call anyone with a telephone number including long-distance, local, mobile, and international numbers without having to pay international or long-distance or phone charges).

Depending upon the need of your business, you can pick any virtual phone system offered by CallHippo.

VoIP number portability

What does VoIP Phone include? 

VoIP system consists of the following:

  • Dedicated desktop VoIP telephones
  • Various softphone applications running on the computer and other mobile devices
  • WebRTC-enabled (Web-based real-time communications) browsers

The requirement for VoIP phone to work is a high-speed internet connection (DSL, Cable) or wireless, as long as the bandwidth of the wireless provider meets the minimum requirement criterion for the VoIP provider you choose.

What is the difference between VoIP phones vs traditional phones?

Traditional phones are hardly at par with this high-paced, fiercely competitive business world of the modern 21st century. They simply do not offer enough anymore! It has several limitations that do not even make it eligible to compete with the latest VoIP phone service. The biggest limitation, for example, is location. When using a traditional phone system, one needs to be physically present near the telephone to answer calls. Every time you take a washroom break or go out to get some fresh air, you miss out on calls and, in turn, kiss goodbye to potential leads. Two salespeople should be competing about who can make the most number of sales, not who can sit at their desk longer!

On the other hand, VOIP phones are rapidly replacing traditional phones as the means of communication between businesses, their clients, and their customers. Globally, VOIP services are expected to grow to 28% between 2016-2020. This computer-enabled Office Phone system brings a lot of saving and increases the productivity of all business sizes. In fact, companies that have switched to VOIP phone systems save 50-75 percent every year.

IP PBXs vs traditional pbx

Spreading your business globally can be cheaper than ever before. In Fact, it is much cheaper and simple to use. All you need to do is dial the international Prefix, the specific country code which will be then followed by the actual phone number you wish of the person you are willing to talk to. The VoIP phone systems is cheaper when compared to other Business Phone numbers as the call is routed through the internet or the corporate data network instead of traditional copper wires.

How does a VoIP phone work?

The working of the VoIP Phone technology can be explained in the below simple steps-

  • Conversion of the voice by an IP phone or ATA (Analog Telephone Adapter) from an analog signal to a digital signal
  • The same is then sent in data packets to a location closer to the destination (over the Internet/broadband)
  • The voice will then be converted back to an analog signal over a traditional circuit switch (PSTN)

This allows your calls to be received by both traditional telephones worldwide as well as by other VoIP users.

Unlike the traditional phone system, the VoIP phone system gives you the freedom to add various useful features (call forwarding, voice messages to email, caller ID, etc.) in your basic calling plan at affordable pricing.How does a VoIP phone number work

Types of VoIP phones

There are two types of VoIP phones available Hard Phones and Softphones. Let’s find our which VoIP phone may suit your business most.

Hard Phones

The VoIP hard phones are physical phones and hardware-based phones. They are very similar to traditional desk phones in terms of looks. Like traditional desk phones, VoIP hard phones also consist of a hand-held receiver with a mic and earpiece, base, screen (mostly touchscreen), and buttons.

VoIP hard phones’ working is a little different from traditional phones; VoIP hard phones use a cable-based internet connection; on the other hand, traditional phones use a telecom’s wired network to establish the connection.

There are various types of Hard Phones:

  • Desk IP phones
  • Wireless or cordless phones
  • Conference phones
  • USB phones


All about Softphone

Softphones are software apps that need a typical smartphone, desktop, or tablet and a stable internet connection to make and receive calls and engage in other telephony conversations.

In other words, a softphone meaning a virtual phone that works as an IP-PBX using VoIP technology and offers advanced features like drag-and-drop call transfers, call bridges, etc. In fact, softphones can enhance all of your VoIP features.

Top 7 VoIP Phones In the Market 

Now that we know what is a VoIP phone, why don’t we take a look at the top VoIP phones in the market?

With multiple VoIP devices available, finding the most suitable one for your requirements can be challenging. We recommend the following phones for VoIP systems which will help boost communication and are a great fit for all business types.

 Let’s look at the top seven phones for VoIP systems in the market.

1. Yealink T21P E2

VoIP Phone Yealink T21P E2

The speaker quality and speech clarity on the Yealink SIP-T21P E2 is unrivaled. The Yealink can handle up to four simultaneous calls and has a big LCD screen with a backlight for easy call management. It best suits small businesses, restaurants, and healthcare practices. 


  • Caller ID
  • Extension dialing
  • Supervise transfer
  • Blind transfer
  • Three-way conference


  • It is GOLS certified
  • The phone is suitable for small homes
  • It has great office supplies
  • The phone is easy to use


  • The pricing is high
  • It comes with multiple accessories
  • The phone has security issues


The pricing of Yealink T21P E2 starts from $126.30

2. Yealink T46S

Yealink T46S

The Yealink T46S IP phone has a high-resolution color display and the company’s signature Yealink HD sound quality. It has integrated dual-port Gigabit Ethernet technology, allowing faster call processing, Opus codec, and PoE support. Furthermore, the Yealink T46S  has two adjustable angles to suit your needs.


  • Wifi via WF40
  • HD Audio
  • USB 2.0
  • T4S firmware unified
  • Bluetooth via BT40


  • The programming is simple
  • It has great display and design features
  • The phone has a great end-user experience
  • The sound quality is excellent


  • It has average customer service 
  • There are faulty headsets ports, at times
  • The phone had issues while configuring


The price of Yealink T46S is $317.30

3. Grandstream GXP2160

Grandstream GXP2160

The Grandstream GXP2160 is adaptable and perfect for small business owners and commercial customers. The GXP2160, like most Grandstream devices, offers HD audio, EHS, USD, Bluetooth connectors, and 24 BLF keys. It also offers automated provisioning for simple setup and built-in encryption to secure your calls.


  • EHS-compatible
  • 5-way conferencing
  • Full-duplex speakerphone
  • USB ports
  • HD Audio


  • The phone offers a responsive support
  • It has an amazing built quality
  • The phone allows customization for the main background and screen layout
  • The graphics and the color screen are nice


  • The headset jack does not integrate with other systems
  • The interface is slow at times
  • There are issues with the operation of the appearance keys


The price of Grandstream GXP2160 is $142.79

4. Grandstream GPX2140

Grandstream GPX2140 VoIP Phone

The GXP2140 is a Linux-based device designed for business use.  This phone can also accommodate up to four GXP2200EXT modules for 160 lines. The GXP2140 supports USB, EHS, and Bluetooth; its HD audio delivers outstanding sound quality. It can be modified for several languages.


  • EHS- compatible
  • 5-way conferencing
  • USB ports
  • Automated provisioning
  • SRTP and TLS security encryption


  • The system has an easy-to-read display
  • It is preconfigured with weather and currency exchange apps
  • The phone has an easy-to-use built-in address book and Bluetooth features
  • The sound quality is good


  • The system’s UI is slow
  • It has a modest feature set
  • Some users have reported glitches


The price of Grandstream GPX2140 is $116.55.

5. Avaya J Series

Avaya J Series VoIP Phones

Avaya phones are popular for their dependable, basic handsets – devices that improve workers’ communication experiences whether they work inside the office or at home. The J series VoIP devices comprise six systems with a sleek, ergonomic design, large, easy-to-read screen, PoE capability, and dual network connections.


  • IP office support
  • Ethernet cable support
  • SIP support
  • Built-in volume boost
  • Mute alerting


  • It has a simple setup
  • The phone offers a modern desktop experience
  • The phone system is cost-efficient
  • It has a good sound quality


  • It offers limited functionality for lower-end devices
  • Some users had installation issues
  • The phone system has inconsistent support


The pricing of the Avaya J Series starts from $105.35

6. Poly V, C Series

Poly V, C Series VOIP Phones

Poly’s phones for VoIP systems are among the industry’s best. The company’s major IP phone lines are the V and C series of devices. While the C series is intended to serve personnel in a centralized or home office, the V series has many features to improve customer engagement in call center settings.


  • Gesture-based
  • Voicemail support
  • Screensaver
  • On-screen virtual keyboard
  • Color LCD


  • Users can install the device easily
  • It has a large touchscreen
  • The device integrates easily with PC function and Bluetooth 
  • It is simple to use


  • There are lag issues in the system
  • There’s no physical dial pad on the CCX range
  • It has a slow user interface


The pricing of the Poly V, C Series starts from $113.93

7. Snom D1, 3 & 7 Series

Snom D1, 3 & 7 Series VOIP Phones

Snom has been manufacturing phones for VoIP systems since 1999. The company offers a wide selection of handsets. It is especially interested in appealing to enterprises that need a substantial installation of telephones, such as resorts, healthcare firms, or big businesses. Snom provides desk phones, conferencing solutions, headsets, and software-as-a-service (SaaS) capabilities.


  • Wall mountable
  • USB support
  • High-resolution display
  • Bluetooth compatibility 
  • Password-protected web


  • The system has a clean design
  • It is lightweight compared to other competitor models
  • This system is hearing-aid compatible
  • It offers low power consumption


  • The sound quality on some models needs improvement
  • Some models can only be manually configured
  • Special characters in phonebooks are not searchable


The pricing of Snom D1, 3 & 7 Series starts from $129

The Basic Requirements for VoIP Phones

You should know about the VoIP phone and its components.

In general, the basic requirements to implement virtual business phone numbers are an internet connection, routers, any data-driven device, and switches.

  • If you wish to have a responsive communication point to your business then you need to pay attention to the bandwidth of your broadband connection.
  • If you have a team of agents working using VoIP Phone numbers, you need more bandwidth.
  • If you are a big enterprise then don’t choose the broadband service provider that puts a cap on the bandwidth consumed as it will restrict the efficacy of your virtual phone number.

Again, check out the load taking the capacity of your routers and switches. Make sure that you are using a high-quality G.711 codec for your VoIP communications.

Again, check out the load taking the capacity of your routers and switches. Make sure that you are using a high-quality G.711 codec for your VoIP communications.

5 Advantages of using a VoIP Phone:

1. Reduced cost

Making calls through VoIP is way cheaper when compared to conventional phone calls. As a single system is dedicated to voice and data both, the cost cut down is obvious. This reduction in cost, if used efficiently, can serve your business in a multitude of ways.

2. Innovative features

VoIP phones serves you with features such as call queuing, interactive voice response, voicemail, call planner, recording, and many more.

3. 24*7*365 Availability

VoIP makes sure that your customers are not left unattended ever again. This proves to be an advantage for your call center agents as well, as they can now work remotely as per their convenience.

4. Portability

The best part about VoIP technology is that it is hassle-free and saves space. All you need is a good internet connection, and you’ll be able to access the VoIP phones from anywhere, anytime.

5. Constant Evolution

You no longer need to be stuck with outdated equipment that is expensive to upgrade. VoIP serves you with the ease of upgrading and changing plans.

Now that we know why you must make the switch, let us understand the cost involved in doing so:

As compared to traditional landlines that come with separate, dedicated copper wires, a VoIP phone can run on your existing internet connection, transmitting your voice as data. As a result, VoIP proves to be much cheaper! The total cost incurred includes a basic cost, plus the cost of running your internet connection. A landline, on the other hand, costs around $100 for a base unit, with extra charges incurred for each additional user.

Standard Features of VoIP Phones

Most VoIP phones come with the following features in their business plans:

  • Mobile management (Android/iOS)
  • Auto-attendant
  • Web-based system administration
  • Call Waiting
  • Call Transfer
  • Call Forwarding
  • Call Conference
  • Voicemail (to text and email)
  • Caller ID
  • Hold music
  • Sharing calls and lines on multiple phones/devices
  • Call Blocking
  • Ring all groups

Apart from the above, some of the additional features offered by the best VoIP phone service and virtual number providers such as CallHippo include-

1. Number portability

An excellent feature to have in any mobile number for business, it reduces the hassle that comes with keeping the old/established number in case of a move or changing phone numbers completely.

Since VoIP phone numbers aren’t attached to traditional phone lines and destinations, they can be easily moved in case you’re relocating your business.

2. Virtual phone numbers

This is yet another exciting feature of VoIP phones. It allows users to choose a phone number with any area code because of the fact that VoIP numbers aren’t attached to any specific location.

For example:  If your business is based out of location A, and you shift most of your over-the-phone business to location B, you could still carry on your business functions smoothly by assigning yourself a virtual phone number of location B area code and all your business calls would be charged as local, without any long-distance charges.

3. Compatible with multiple devices

The beauty of the VoIP phones is that it allows you to make all the VoIP calls from multiple devices including IP phones, computers, mobiles, tablets, etc. Additionally, all your incoming VoIP calls can be easily set to ring multiple devices simultaneously irrespective of the location of the device or executives handling the same.

How VoIP Phones are useful to a business

If you own a business and want to have a receptive communication system then you must be aware of VoIP.  30% of the US businesses found it a productivity-booster and cost-cutter. Driven by technology, the VoIP phone number has become the spine for every business. On top of all, its affordability has driven its omnipresence.

Though no one can raise the finger on the efficacy of a virtual phone system, there is an immersed need to have profound knowledge about it to ensure the right implementation.  You will be able to reap the benefit of this cord-cutting technology if you know all its whereabouts.

The Positives

Have you ever wondered why businesses have developed so a strong affinity towards VoIP phone numbers?

Well, the answer lies in the cost-effectiveness and multi-facet functionality of the VoIP phone systems. The positives of VoIP communication systems are highly diversified. While the low-cost grabs the first place, you can’t ignore the HD voice quality offered by CallHippo.

A competent virtual phone number system makes sure that you never miss a call. With its call forwarding and call recording features, it diligently handles high call –traffic. Another major positive of a virtual number is its ability to do intelligent call distribution. If an agent is already busy then it automatically transfers the call to another available agent.

Another boon of a VoIP phone system is its scalability. You can easily integrate with other components like CRM.  The moment it receives a call from a customer it integrates it with the inbuilt CRM to use later. With detailed reporting of calls, you can easily know what tour customers what and how you can cater to their needs.

The Negatives

Just like the positives, one should be aware of the negative of VoIP phones.  One of the major drawbacks of VoIP phone is that it is totally dependent on technology. Whether it is the electricity or the internet connection, your virtual business phone number will stop working as soon as any technical failure occurs.

Though hosted services reduce this drawback up to a certain extent by converting the missed calls into voicemails or routing them directly to your mobile phone, it will restrict your functionality.

You will be disappointed with your virtual numbers in case of any emergency calls. Calling to emergency numbers like 911 is not allowed over a virtual phone. Even if some leading VoIP service providers offer this facility you need to pay extra charges for this.

Reaching the part of the globe where internet connectivity is not that robust could be highly irksome at times.  A slow internet network directly affects voice quality.

How to choose the perfect VoIP phone service for furthering your business?

With a lot of fish in the VoIP ocean, it often gets a bit of a task to segregate the best amongst the rest. Even though we have made the task at hand simpler by narrowing down the list to the top 5 contenders, it helps to have a checklist of requirements to make a perfect choice.

a) Hardware Requirements

Every VoIP service provider has a different apple pie to offer and as a customer, you need to choose one that suits your business needs best.

While some providers allow you to use your existing hardware, others may require you to get specific devices. You would also come across VoIP business plans with no hardware requirements. One can simply make and receive calls directly from the mobile app.

It ultimately boils down to catering to the needs of your business. A solo entrepreneur and an enterprise-grade calling center will understandably have different hardware preferences.

b) Pricing Plans

Usually, VoIP business plans are priced based on the number of users or lines you have. Higher the number of lines you need, the lower will the per-user cost turns out to be. Some service providers charge you per-user, some give you unlimited minutes, while others provide minute restrictions based on your plan.

It is basically an interplay of finding the perfect price point which meets your needs whilst fitting in your budget boundaries. If you’re a low-volume caller that only makes and receives two or three calls per day, you probably won’t need an unlimited plan.

You should also consider the length of your contract. Some companies would require you to sign an annual contract to get the best rate, while others bill on a monthly basis.

c) Features

Some may reckon that you should settle for the software that provides maximum bang for the minimum buck. However, that rule isn’t really the best to go by. Simply because you might need every feature on offer and could do without some. So why end up paying for something you might not even use?! Chalk out the features that are needed for your business and then find the perfect software that offers the feature concoction you are looking for.

d) Setup & Ease to Use

Before zeroing in on any particular VoIP read the customer reviews thoroughly and request a demo or free trial to assist you in making an informed decision.

Theoretically, VoIP phone services are supposed to be easier than traditional options. Ensure that you choose the one that comes with an easy setup process and user friendly interface.

On a conclusive note, we would like to sign off by saying that no matter how big or small your business may currently be, it could benefit a lot by choosing the perfect communication softphone partner. Need further assistance? Help is just a text or a comment away!

To Sum it Up

Being an extremely flexible solution; the best VoIP phone service lets you choose the package that perfectly suits your customized business needs. It means that you will be able to use the VoIP telephony system wherever you are as long as you have a fast Internet connection.

Why wait any longer? Sign up now with CallHippo and get started in less than 3 minutes.


1. How to transfer a phone number to VoIP?

First, you must contact your original provider to request the transfer of your telephone number to a VoIP service. Before porting, your phone number must still be connected and in service.

2. Can I use a VoIP phone as a regular phone?

Yes, you can use a VoIP phone as a regular phone and make, receive, and manage calls. But, the functionality is better, and the costs are less.

3. Is VoIP calling free?

Yes, there are some free VoIP software and applications available that you can use to make and receive calls—even video calls!— over the internet.

4. Is VoIP really unsafe?

Well, the answer is no. Even after all the security risks that I listed above, VoIP phones can be 100% trusted. Think of it this way. You know that the internet is not a safe place and that it is full of hackers. Well so does your service provider! VoIP providers know the amount of risk that is involved in their system and hence they take sufficient precautions to prevent any data leaks. VoIP phone service risks can always be mitigated and connections installed from trusted professional service providers are highly secure.

5. How Do I Get a VoIP Number?

When you sign up for a CallHippo VoIP service plan, you get VoIP with the domain and a competent service provider from the team who will assist you in getting the virtual phone number of your choice.

CallHippo includes free porting and setup with every subscription. Plans for CallHippo’s business phone service begin at $20 per month.


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