Traditionally, legacy phone systems carry voice signals using analog phone lines. Rather than sending data packets over a traditional circuit-switched network, VoIP, the abbreviation for Voice over Internet Protocol, sometimes also referred to as IP telephony, is a technology that converts voice into digital signals that can be transmitted over internet digital data packets via your local area network/WAN/other infrastructure to enable phone calls. VoIP uses RTP (real-time protocol) to ensure that these packets get delivered timely. You can use either an ethernet cable or a high-speed WiFi connection for VoIP.

 

In short, VoIP basically works by converting analog telephone signals into digital signals to facilitate telephony over the Internet.