Voice-over-Internet Protocol (VoIP)

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DEFINITION of 'Voice-over-Internet Protocol (VoIP)'

A technology that allows users to communicate through an Internet connection rather than an analog connection. Voice-over-Internet Protocol converts the voice signal associated with traditional phone technology into a digital signal.

BREAKING DOWN 'Voice-over-Internet Protocol (VoIP)'

The adoption of VoIP technology has affected the telecommunications industry by reducing the demand for traditional phone services. Its popularity relates to the wider adoption and availability of broadband Internet access. VoIP has been increasingly used by businesses seeking to reduce the cost of their telephone service.

Depending on the VoIP configuration, phone calls can be made using a traditional phone with a special adaptor or through a computer. Because VoIP technology uses network routers, rather than the network configuration of legacy phone systems, the reliability of VoIP service can be negatively affected by high volumes of Internet traffic.  

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