Different Types of VoIP Services Explained With Examples

The digital revolution has transformed not just how we communicate, but also what tools we use to do so. Voice over Internet Protocol (VoIP) services have become crucial to modern business communication systems, offering a range of benefits, from cost savings to enhanced functionality.

In this comprehensive guide, we will explore the various types of VoIP services available, their unique benefits, and how small businesses and individuals can capitalize on them.

What is VoIP 

At its core, Voice over Internet Protocol (VoIP) transforms traditional voice calls into a digital format that passes through the Internet, offering a flexible alternative to conventional phone lines. With VoIP, you have the flexibility to make calls directly from a dedicated VoIP phone, a VoIP-connected device, or a traditional phone connected to an adapter.

Additionally, you can place calls from any location with Internet connectivity, making it an incredibly flexible option for businesses and individuals alike. It supports voice calls, video calls, and text messaging, all using the Internet as the transmission medium.

This adaptability and efficiency establish VoIP as an essential tool for businesses looking for practical and cost-effective communication solutions. This is supported by research indicating that by 2031, the global mobile VoIP market is forecasted to reach $327.5 billion

Different types of VoIP services

There are several types of VoIP services, each offering distinct features and addressing different needs. Here are some common types of VoIP services:


1/ Hosted VoIP systems: 

Hosted VoIP systems, also known as cloud-based VoIP, work by hosting your business’s phone system core off-site, usually in a secure, professionally managed data center. This setup eliminates the need for you to purchase or maintain costly PBX hardware on your premises. 

Instead, hosted VoIP providers handle call routing and services over the Internet, giving you access to a full suite of telecommunication features without the usual overhead expenses. 

These systems offer various functions like automated attendants, call forwarding, voicemail to email, and integration with your mobile devices, ensuring a multi-functional communication network. 

With their scalability, you can easily add or remove lines as your needs develop, making hosted VoIP systems a highly adaptable solution for small businesses and remote workers looking for professional telephony capabilities without a significant initial investment.

Benefits of Hosted VoIP Systems

  •  Scalability: Hosted VoIP services offer exceptional scalability. Whether your business is expanding or you’re adjusting to seasonal demand fluctuations, you can easily add or remove lines to match your current needs without any significant restructuring.
  •  Flexible Work Arrangements: With the ability to integrate with mobile devices and computers, hosted VoIP enables you and your team to work from anywhere. This flexibility is crucial for supporting remote work and ensuring business continuity.
  •  Simplified IT Management: By choosing hosted VoIP, your internal IT team’s workload is significantly reduced. Since the service provider handles the technical maintenance and updates, your team can dedicate their attention to other crucial areas of your business’s technology requirements.
  •  Improved Security: Professional-hosted VoIP services implement comprehensive security measures including encryption, secure voice protocols, and network protection strategies to safeguard your communications from potential threats.

2/ In-house VoIP Systems: 

In-house VoIP systems also called on-Premise-VoIP, are responsible for managing and maintaining the VoIP infrastructure directly on your business. Unlike hosted solutions, where the service provider oversees the hardware and software off-site, with in-house VoIP, all the necessary equipment is located on your premises. This arrangement means you have full control over your telephony environment.

At its core, an in-house VoIP system converts voice into digital signals that travel over the internet or your internal network, where it’s then reconverted into voice at the recipient’s end. For this setup to work, you’ll need VoIP-compatible phones, a local area network (LAN) with sufficient bandwidth, and a dedicated VoIP server or IP-PBX to route calls and manage features like voicemail, call forwarding, and automated attendants.

Benefits of In-house VoIP Systems

  • Complete Control Over Configuration: In-house VoIP systems give businesses complete control over their telecommunications network, allowing for setup, configurations, and customizations that cater to specific operational needs and preferences.
  • Optimal Customization and Integration: Businesses have the opportunity to integrate their VoIP system with internal systems and technologies. This integration facilitates smooth operations and enhances productivity by establishing a unified communication platform.
  • Potential for Enhanced Performance: With a dedicated internal network, in-house VoIP systems can offer superior call quality and reliability, assuming the network is properly managed and maintained to support VoIP demands.
  • Cost-Effectiveness for Larger Organizations: Over time, the initial investment in an in-house VoIP system can lead to reduced operational costs, particularly beneficial for larger companies that can leverage their current infrastructure and IT teams effectively.

Related Reading: Hosted vs on-premise VoIP

3/ Hybrid VoIP Services: 

Hybrid VoIP services combine the features of both hosted and in-house VoIP systems to offer a flexible and adaptable telecommunication solution. In simple terms, this means that an external provider manages some parts of your phone service while others are controlled directly by your business.

This approach allows you to experience the convenience and expertise of a hosted service, such as automatic updates and off-site technical support, alongside the control and customization possibilities of an in-house system.

With Hybrid VoIP, you can decide which aspects of your phone system you want to manage yourself and which you’d prefer to leave to the professionals outside your company. For example, a company might keep critical functions in-house for security reasons but use a hosted service for less sensitive tasks or for features that require advanced infrastructure.

Hybrid VoIP services offer a significant advantage in adaptability by allowing businesses to modify their telecommunication capabilities without the necessity for a complete system upgrade. This flexibility facilitates scaling, whether up or down, as required.

Moreover, Hybrid VoIP plays a crucial role in a transition for companies shifting from traditional phone systems to a fully hosted VoIP solution.

4/ Business VoIP Services:

Small businesses frequently demand advanced and resilient communication systems. Business VoIP services address these requirements and are available in several variants:

Hosted PBX (Private Branch Exchange)

A Hosted PBX system is a cloud-based communication solution that gives small businesses the advanced features of an enterprise-level phone system without needing a significant investment in telecommunications infrastructure.

It delegates the technical management and upkeep of the phone system to an external provider, which operates it from a remote location. 

This service model not only ensures reliability and scalability, as the system can easily grow with your business, but it also offers many advanced features such as auto-attendants, voicemail to email transcriptions, and call queue management.

Related Reading: Traditional PBX Vs VoIP

Unified Communications as a Service (UCaaS)

UCaaS takes the concept of hosted PBX further by integrating various communication tools, such as voice communication, video meetings, and messaging, into a unified platform. It is ideal for businesses that seek a comprehensive and streamlined communication experience.

Related Reading: Differences between VoIP and UCaaS

SIP Trunking

SIP Trunking (Session Initiation Protocol Trunking) allows businesses to facilitate voice, video, and messaging applications via a single line of internet connection. Essentially, it acts as a virtual phone line, enabling the transmission of communication data over the Internet rather than through traditional telephone wires. 

This approach not only simplifies the communication infrastructure but also significantly reduces costs associated with multiple phone lines and hardware. By leveraging SIP Trunking, businesses can achieve greater scalability, flexibility, and efficiency in their communication strategies, ensuring they stay connected most efficiently.

Related Reading: Difference between SIP trunking and VoIP

5/ Free VoIP Services

Free VoIP services are a cost-effective option for businesses looking to minimize communication expenses. These services allow you to make phone calls over the Internet without a traditional phone line and without having to pay a premium. This is ideal for startups and small businesses with limited budgets. 

However, it’s important to note that while the core calling features may be free, advanced features might come with a fee. Additionally, the quality and reliability of free services can vary, so they may be best suited for internal communications or businesses with moderate call requirements.

Examples of VoIP providers 

Below are some examples of reputable VoIP providers, each offering a range of services tailored to individual, residential, or business needs.

1/ Dialpad:

Dialpad is a leader in the VoIP segment for its innovative approach, integrating AI for smart call routing and real-time transcript creation. It’s not just a communication tool; it’s an intelligence platform with powerful insights and analytics for both customers and sales teams. Dialpad also integrates with popular business tools ensuring that your teams can communicate effectively without having to switch between applications, improving efficiency and productivity.

2/ CloudTalk:

CloudTalk provides cloud-based phone systems that enable businesses with high-quality calls, scalable packages, and integrations with CRM systems like HubSpot, Salesforce, and Pipedrive. Customized to the needs of growing companies, CloudTalk’s call center solutions and advanced reporting tools help businesses of all sizes to operate efficiently.

3/ Ooma Office:

Developed for small and medium-sized businesses, Ooma Office serves as a complete VoIP solution with features such as a virtual receptionist, extensions for every employee, and a mobile app. Ooma Office combines strong features with a clear pricing structure, ensuring that businesses can predict and control their calling costs.

4/ Grasshopper:

Focused on the needs of remote teams and entrepreneurs, Grasshopper is a virtual phone system that allows users to manage their business calls via mobile or desktop. Grasshopper’s standout feature is its ability to set up a business number that maintains a professional image, offering call forwarding, voicemail, and texting services.

5/ Aircall:

Built for modern businesses, Aircall offers a software-based phone solution for support and sales teams. Its deep integration with customer relationships and support systems, alongside strong analytics, makes Aircall a go-to choice for businesses that value customer experience.

List of VoIP applications 

Some popular VoIP applications include:


1/ Zoom:

Zoom has rapidly become associated with both professional and casual video communication, facilitating not just voice calls but also video meetings, webinars, and live chats. It’s an application that represents flexibility, making it an ideal choice for businesses and remote teams aiming for smooth interaction.

2/ Skype:

Skype remains a foundational tool for real-time voice and video communications across the globe. It offers a comprehensive platform for instant messaging, international calls, and video conferencing. 

The ease of use and broad compatibility make Skype a versatile choice for maintaining daily business operations, enabling clear, uninterrupted communication with team members and clients worldwide.

3/ Microsoft Teams: 

 Microsoft Teams excels as a platform developed to enhance team collaboration and productivity. Integrating with the Office 365 suite, it provides a centralized space for team conversations, file sharing, and meetings, all while maintaining a high-level security standard. Microsoft Teams facilitates not just internal team communications but also project management and planning. 

4/ Google Meet:

As part of Google Workspace (formerly G Suite), Google Meet offers user-friendly features, top audio and video quality, and unified integration with other Google apps. This makes it a practical choice if you are already using Google’s services.

5/ Viber:

Viber stands out for its cross-platform capabilities, offering both voice and video calls alongside instant messaging. This app is particularly advantageous for small businesses that prioritize secure and private communication channels. With its end-to-end encryption, you can ensure that your conversations remain confidential.

Types of VoIP phones

VoIP phones come in various forms to suit different needs and preferences. Here are some common types of VoIP phones:

1/ Desk Phones:

Desk phones, which resemble traditional telephones but are adapted for VoIP networks, play a crucial role in office settings. They are either hardwired or connected through Ethernet to the internet, providing a dependable and consistent communication channel.  

2/ Wireless IP Phones:

Wireless IP phones provide freedom to move within the office without being tied down to a particular spot. These phones link to the VoIP service using Wi-Fi or DECT technology, making them perfect for settings where mobility is crucial. 

3/ Conference Phones:

Conference phones are designed for meeting rooms and group discussions. They feature advanced audio technology capable of capturing voices from various directions, ensuring clear communication during conference calls.

4/ Softphones:

Softphone applications are flexible programs that can be easily used on various devices like smartphones, tablets, laptops, and desktop computers. This approach enables you to make and receive calls using your device’s internet connection, eliminating the need for physical phone lines or specialized hardware. 

5/ Analog Telephone Adapters (ATAs):

ATAs allow you to connect a standard analog phone to your VoIP network, enabling your existing equipment to make VoIP calls. This option is cost-effective for businesses that wish to retain their current phones while migrating to VoIP.

To know more check out our detailed guide: Types of VoIP Phones

VoIP advantages and disadvantages 

Voice over Internet Protocol offers several advantages and disadvantages compared to traditional telephone systems. Here’s an overview:

Advantages of VoIP

1/ Cost Efficiency:

VoIP technology significantly reduces the cost of communication by leveraging internet protocols for voice transmission, eliminating the need for traditional telephone lines and their associated higher operational costs. In fact, VoIP can cut small business communication startup costs by up to 90%.

2/ Advanced Features:

VoIP services offer advanced features beyond traditional phone systems, including voice-to-email transcriptions, conference calling, automatic call forwarding, and integration with other business systems (CRM, ERP), enhancing operational efficiency.

3/ Flexibility and Mobility:

VoIP enables employees to place and receive calls from any location, as long as they are connected to the internet. This supports modern work practices, including remote work and virtual work, enhancing productivity and work-life balance.

4/ Scalability:

VoIP systems can easily scale up or down based on the needs of the business, allowing for effortless addition or removal of lines without substantial infrastructure changes, making it an ideal solution for both growing companies and established enterprises.

Disadvantages of VoIP

1/ Dependence on Internet Connectivity:

VoIP’s performance is heavily reliant on internet bandwidth and reliability. Poor internet infrastructure can lead to call dropouts, latency, and reduced call quality, impacting business communications.

2/ Power and Internet Outages:

Unlike traditional telephone lines that work during power outages, VoIP services depend on power and internet connectivity. Therefore, an outage of either could bring communication to a complete stop.

3/ Security Vulnerabilities:

The online nature of VoIP systems exposes them to potential cyber threats including hacking and phishing attempts. Without strong security protocols, VoIP systems are at risk of being vulnerable, leading to potential data breaches and unauthorized eavesdropping.

4/ Hardware and Software Requirements:

To maximize the benefits of VoIP, businesses may need to invest in compatible hardware (such as IP phones or headsets) and software upgrades, which can be a barrier for small businesses or startups with limited capital.

5/ Complexity and Training:

The advanced features and functionalities of VoIP systems can introduce complexity, requiring staff training to ensure they can leverage the system effectively, which may be seen as a disadvantage by businesses with limited resources for training.

What application layer (VoIP) protocols do they each use? 

Within VoIP technology, various protocols form the foundation for enabling voice transmission over the Internet. Understanding these protocols is essential for understanding how VoIP systems operate smoothly across different networks.


1/ SIP (Session Initiation Protocol):

SIP (Session Initiation Protocol) in simple terms, is a set of regulations that control the beginning, alteration, and end of multimedia communication sessions in applications like voice and video calls over the Internet.

Through the utilization of SIP technology, organizations can enhance communication processes, enabling more adaptable, scalable, and cost-efficient solutions compared to traditional telephony systems.

2/ RTP (Real-time Transport Protocol): 

This protocol efficiently manages the real-time transmission of multimedia data, ensuring that voice and video calls are delivered with minimal delay and high quality. At its core, RTP facilitates the continuous flow of data packets between communicating devices during a VoIP call, handling the timing, ordering, and delivery to maintain the call’s integrity. 

3/ H.323:

H.323 is one of the oldest protocols used for video conferencing and voice-over IP (VoIP). It provides specifications for real-time audio, video, and data communication over packet-switched networks and is known for its extensive compatibility with legacy systems.

4/ MGCP (Media Gateway Control Protocol):

Developed to manage media gateways on Internet Protocol (IP) networks, MGCP is a protocol that aims to break down the conventional call processing function into call control and media gateway elements. This approach streamlines a more centralized control architecture.

Frequently Asked Questions

Q1) What are the services of VoIP?

Ans: Voice over Internet Protocol, fundamentally transforms how telecommunications services operate by utilizing the Internet for voice and multimedia communications.  These services are designed to offer businesses and individuals scalable, cost-effective, and advanced communication solutions that exceed the capabilities of traditional telephony.

Q2) What is the best example of VoIP? 

Ans: Skype stands out as a prime example of (VoIP in action. It transformed communication by allowing users to conduct voice and video calls over the Internet, avoiding the expenses associated with traditional phone infrastructure. Beyond facilitating voice and video conversations, this platform offers additional functionalities such as instant messaging and file sharing, making it a useful communication solution for personal and business purposes.

Q3) What are the 2 types of VoIP? 

Ans: The two primary types are Fixed VoIP and Non-Fixed VoIP. A Fixed VoIP service is directly associated with a physical location and often linked to an account’s address or specific phone line. This type of VoIP is typically provided by Internet Service Providers (ISPs) and is considered more secure and reliable. Alternatively, Non-Fixed VoIP services are not tied to a physical location. These services are accessible worldwide via any internet connection, offering a high degree of flexibility and cost-efficiency.

Q4) Is there a free VoIP service? 

Ans: Yes, there are free VoIP services available that cater to basic voice calling needs over the Internet for example WhatsApp and Facebook Messenger. Free VoIP solutions may include basic voice calling, instant messaging, and sometimes video conferencing capabilities. However, for more extensive features such as advanced call routing, business application integration, or enterprise-level security and support, paid VoIP subscriptions are recommended.

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