Skype - How the VoIP Service Works

Skype is one of the most popular VoIP services. From its early days as a small company, it's grown into quite a behemoth and has also expanded its service offerings despite stiff competition from many other companies providing the same service. But though Skype is a true VoIP solution, it works very differently from the VoIP services that businesses use. Here we take a look at how Skype works and what makes it different.

How Skype Works

Skype allows individual users to place calls over the Internet. There are two types of calls one can make using Skype. In the first type, the other person is also using the Skype program. This allows you to talk to each other directly over the Internet using nothing more than your bandwidth. It's much like sending email to someone. It's free and unlimited. If your hardware supports it, you can even participate in video chat.

The other type of Skype call is one that is placed to a regular telephone on the PSTN network. We must remember that the phone network is a completely different type of network from that on which the Internet runs. So we need to perform some sort of magic to allow the calls placed on the Internet using Skype to pass onto the phone network. This is called a gateway and costs such as call set up as well as maintaining the call come into play. It's not free and users are charged by the minute.

However, it can be much cheaper than making a PSTN to PSTN call. This sounds counterintuitive. Why is it cheaper to start a call on one network and then transfer it to another when you can place the call on the same network in the first place? The reason is that Internet costs don't vary depending on the location of the person. It costs the same and uses the same bandwidth to view a webpage hosted in France and to view one in the US. Because of this, VoIP calls using Skype can traverse most of the distance using the Internet for free and only then switch to the PSTN network to complete the call.

What would normally be an expensive international call can now cost just a few cents a minute!

Business VoIP

Business VoIP is very different. It needs integration between existing phone lines and the VoIP network as well as complex systems to manage extensions, multiple numbers for the same device, conferencing and the like. Unlike Skype, it uses the SIP protocol to communicate, and though the technology is the same, the implementation is very different.

Bhagwad is an expert consultant for a VoIP Phone System. He also specializes in HD Voice Calls.