VoIP (Voice over Internet Protocol)
VoIP — Voice over Internet Protocol — is technology that carries phone calls over the internet as digital data, instead of over the traditional copper telephone network.
In plain terms, VoIP turns your voice into data packets and sends them over the same internet connection you use for everything else, rather than down a dedicated phone line. It's the technology behind almost every modern business phone system and contact centre.
VoIP is also the modern successor to a whole family of older telephony terms — PSTN, ISDN, PABX, IP phones and IP technology — which is why understanding VoIP means understanding what it replaced.
This guide explains what VoIP is, how it works, the older telephony terms it replaced, why Australian businesses have switched, and what it means for contact centres.
What it is
A technology that carries phone calls as digital data over the internet, replacing traditional copper and ISDN phone lines.
Why it matters
VoIP is now the default for business voice in Australia — cheaper, more flexible, and the foundation of cloud phone systems and contact centres.
What this guide covers
What VoIP is, how it works, the old telephony jargon it replaced (PSTN, ISDN, PABX and more), the Australian switch-off, and its contact centre role.
What is VoIP?
In plain English
VoIP lets you make and receive phone calls over an internet connection instead of a traditional phone line. Your voice is converted into digital data, split into small packets, sent across the internet, and reassembled at the other end — all in real time, so it sounds like an ordinary call.
Because the call travels over the internet rather than a dedicated copper circuit, VoIP is usually cheaper, more flexible and far easier to scale than the phone systems it replaced.
You'll also hear VoIP referred to as IP telephony, internet telephony or simply voice over IP. They all describe the same core idea: voice carried over Internet Protocol (IP), the same networking standard that runs the internet.
What it is
A way of carrying phone calls as digital data over an internet connection, using IP phones, softphones or apps instead of traditional handsets wired to a phone line.
What it isn't
It's not a single product or brand. VoIP is the underlying technology; cloud phone systems, softphones, SIP trunking and cloud contact centres are all built on top of it.
How VoIP Works
The mechanics sound technical, but the flow is simple: your voice becomes data, travels over the internet, and becomes sound again at the other end.
Voice is digitised
Your VoIP phone, softphone or app converts the sound of your voice into digital data.
Split into packets
That data is broken into small packets, each labelled so it can be routed and reassembled correctly.
Sent over the internet
The packets travel across your internet connection to your VoIP provider and on to the recipient.
Reassembled as sound
At the other end the packets are reassembled and converted back into audio — all in real time.
💡 What you need for VoIP
The essentials are a reliable internet connection with enough bandwidth, a VoIP service or phone system, and a way to make calls — a physical IP phone, a softphone (calling software on a computer) or a mobile app. Call quality depends heavily on the quality and capacity of your internet connection.
The Telephony Terms Explained
VoIP sits at the centre of a cluster of telephony terms — some describe the old networks it replaced, others the equipment and protocols involved. Here's how the main ones fit together.
The legacy networks VoIP replaced
- PSTN (Public Switched Telephone Network): the traditional copper-line telephone network — the "landline" system that carried calls for over a century. In Australia it's being progressively switched off in favour of the NBN and VoIP.
- ISDN (Integrated Services Digital Network): an older digital phone service that ran multiple voice channels over a single line, once common for business phone systems. Telstra stopped selling ISDN in 2018 and has been retiring it ever since, pushing businesses to VoIP.
- Voicemail: recorded messages left when a call isn't answered. With VoIP, voicemail is typically delivered as unified messaging — for example, voicemail-to-email — rather than sitting on a physical exchange.
The equipment and protocols
- PABX / PBX (Private Automatic Branch Exchange): the phone system that routes calls within an organisation and out to the public network. Traditional PABXs were on-site hardware; the modern equivalent is an IP-PBX, or a hosted/cloud phone system delivered over VoIP.
- IP Phone: a handset that connects to your network or the internet rather than a traditional phone socket. A softphone does the same job in software on a computer or mobile.
- IP Technology / IP Telephony: umbrella terms for delivering communications over Internet Protocol. VoIP is voice carried over IP — the voice application of the same technology that runs the internet.
- SIP (Session Initiation Protocol): the signalling protocol that sets up, manages and ends VoIP calls. SIP trunking is the modern replacement for ISDN lines, connecting a phone system to the VoIP network over the internet.
💡 The one-line summary
If you're researching PSTN, ISDN, PABX, IP phones or "IP technology", you're really looking at the world VoIP replaced or the parts that make it work. VoIP is the modern, internet-based way of doing what all of these older terms described.
VoIP vs PSTN and ISDN
VoIP won out over the traditional copper (PSTN) and ISDN networks for some clear practical reasons.
💲 Lower cost
Calls travel over your existing internet connection, so there are no separate line rentals, and call charges — especially long-distance — are typically much lower than on PSTN or ISDN.
🎚️ Flexibility & scale
Adding or removing lines and users is a configuration change, not a site visit and new cabling. Capacity flexes up and down as your needs change.
🌏 Location independence
Because calls run over the internet, agents and staff can work from the office, home or anywhere with a connection using the same number and phone system.
⚠️ The trade-off: it depends on your internet
A traditional PSTN line kept working in a power cut and didn't depend on your data network. VoIP relies entirely on your internet connection, so call quality and availability are only as good as that connection.
That makes adequate bandwidth, quality of service (prioritising voice traffic) and a plan for internet or power outages essential — particularly for a contact centre where voice is business-critical.
The Australian Switch-Off
For Australian businesses, moving to VoIP hasn't just been an option — the legacy networks are being switched off.
PSTN and ISDN are being retired
As part of the NBN rollout, the traditional copper PSTN network has been progressively switched off across Australia. Telstra stopped selling new ISDN services in 2018 and has been disconnecting existing ISDN lines in the years since, moving business voice onto IP-based services.
The pattern continues with newer legacy products: Telstra's Digital Office Technology (DOT) service reached stop-sell in September 2025 and is scheduled for full retirement in 2027. The practical upshot is that VoIP over the NBN is now the default for Australian business voice, and any business still on PSTN, ISDN or older services needs a migration plan. This is general information, not telecommunications advice — confirm timelines for your services with your provider.
💡 If you're still migrating
Most businesses move from ISDN to SIP trunking (to keep an existing phone system) or to a fully hosted PBX or cloud contact centre. The right path depends on your current setup, number of sites and whether you're also modernising your contact centre.
VoIP in the Contact Centre
VoIP is the foundation almost every modern contact centre is built on. Once voice runs over IP, it can be combined with software and data in ways the old copper network never allowed.
What VoIP enables
Running voice over IP is what makes features like IVR, ACD (intelligent call routing), CTI and call recording practical — and it's the basis of the cloud contact centre.
How it connects
A contact centre platform connects to the phone network either through SIP trunking or as part of a hosted cloud service. Either way, VoIP is what carries the calls to and from your agents.
💡 Finding a VoIP or phone system provider
The Australian market moves quickly, with many providers and models to compare. The Business Phone Systems section of the ACXPA Supplier Directory lets you compare VoIP and phone system suppliers, and the Contact Centre Technology category covers full contact centre platforms.
Frequently Asked Questions About VoIP
What is VoIP in simple terms?
VoIP (Voice over Internet Protocol) is a way of making phone calls over the internet instead of over a traditional copper phone line. Your voice is converted into digital data, sent across your internet connection as packets, and turned back into sound at the other end. It's the technology behind almost every modern business phone system and contact centre.
What is the difference between VoIP and a landline?
A traditional landline carries calls over the copper Public Switched Telephone Network (PSTN), using a dedicated physical circuit. VoIP carries calls as data over your internet connection. VoIP is usually cheaper and far more flexible, but it depends on your internet, whereas an old landline kept working during an internet or power outage.
Is VoIP the same as PABX, IP phone or IP technology?
They're related but not the same. VoIP is the underlying technology — voice carried over Internet Protocol. A PABX (or PBX) is the phone system that routes calls; the modern version is an IP-PBX or cloud phone system running on VoIP. An IP phone is a handset that connects over the network, and "IP technology" or IP telephony is the broader umbrella. In short, PABX, IP phones and IP technology are all parts of, or powered by, VoIP.
What replaced PSTN and ISDN in Australia?
VoIP has replaced both. As part of the NBN rollout, the copper PSTN network has been progressively switched off, and Telstra stopped selling ISDN in 2018 and has been retiring it since. Businesses have moved to VoIP — either using SIP trunking to keep an existing phone system, or moving to a fully hosted cloud phone system over the NBN.
Do I need special phones for VoIP?
Not necessarily. You can use a dedicated IP phone (a handset that plugs into your network), a softphone (calling software on a computer), or a mobile app. Some setups also use adapters that let older analogue handsets work with VoIP. What matters most is a reliable internet connection with enough bandwidth for clear calls.
Is VoIP good for call centres?
Yes — VoIP is the foundation of virtually every modern contact centre. Running voice over IP is what makes features like IVR, intelligent call routing (ACD), CTI, call recording and cloud contact centres possible, and it lets agents work from anywhere. The main requirement is a robust, well-provisioned internet connection, since voice is business-critical and quality depends on the network.
What is the difference between VoIP and SIP?
VoIP is the general technology for carrying voice over the internet. SIP (Session Initiation Protocol) is the specific signalling protocol most often used to set up, manage and end VoIP calls. SIP trunking uses that protocol to connect a phone system to the VoIP network, and is the common modern replacement for ISDN lines.
Where to Next
Summary: VoIP
VoIP (Voice over Internet Protocol) carries phone calls as digital data over the internet instead of over the traditional copper telephone network.
It's also the modern successor to a cluster of older telephony terms: the PSTN and ISDN networks it replaced, the PABX phone systems now delivered as IP-PBX or cloud services, and the IP phones and IP technology that make it work — with SIP the protocol that sets up the calls.
VoIP is cheaper, more flexible and location-independent, but it depends entirely on your internet connection, so bandwidth and resilience matter. In Australia it's now the default for business voice, as the copper PSTN and ISDN networks are switched off through the NBN migration.
For contact centres, VoIP is the foundation that makes IVR, ACD, CTI and the cloud contact centre possible. To compare providers, browse the Business Phone Systems section of the ACXPA Supplier Directory.
