VoIP (Voice over internet protocol) represents the next generation of Phone services. The VoIP technology uses a high speed internet connection (such as DSL or cable) rather than a traditional phone line, for the transmission of voice signals. The use of this technology costs significantly less than the use of traditional phone lines. Think of it as having to send a document to someone by fax versus sending the same document by e-mail. Which option is cheaper? The cost of faxing a document depends on where youre faxing it to and how many pages youre faxing (and therefore how long youll use the phone line). E-mailing the document costs the same thing regardless of where youre e-mailing it to and how many pages youre e-mailing. The same applies to VOIP.

There are several providers currently offering VOIP phone services such as Vonage, lingo and packet8 among others. The calling plans range in price from $10 to $30 a month. Most have unlimited long distance calling and free features such as call waiting, caller ID, voicemail, etc without additional costs. The cost advantage of VOIP is such that traditional phone providers such as Verizon and AT&T have already begun to offer VOIP phone services which also cost significant less than their regular plans. Therefore, the VolP technology is set to bring lower prices and improved services to the consumer as a result of more competition.

There are generally three kinds of VOIP calling:

1)_ATA (Analog telephone adaptors): your phone is plugged into special router which is in turn connected to the internet. This router converts analog signals from your phone into digital packets of data which can then be sent through a high speed internet connection. If the person youre calling also has VOIP, these packets of data travel exclusively through the internet all the way to the other side of the line. If youre calling a regular phone, then a part of the journey must be made through regular phone lines. Thats why there is a cost involved. It is this kind of VOIP that providers such as Vonage, lingo, packet8 and others rely in order to provide their services. Because your voice travels mostly through the internet the cost of the calls is much lower, and therefore the calling plans are much cheaper.

2)_IP(internet protocol) phones: these phones look exactly like standard phones, but instead of connecting to a normal phone cable, they connect to an Ethernet cable which in turn plugs directly into your router or broadband modem. This way the conversion of your voice into digital packets of data happens inside the phone, rather than in a VOIP router.

3)_ Computer to computer: this is currently the most popular kind of VOIP calling. Computer programs such as Skype, allow you to talk to anyone anywhere in the world for free! All that is needed is a microphone and a speaker on each of the computers. Since this technology uses exclusively the internet connection to get from one end of the line to the other, there is no cost for the user. Its like exchanging e-mails messages, except that packets of data containing voice rather than words are traveling through the internet. For a small fee, these programs also allow you to make calls to regular phones

One good feature of VOIP is that youre not tied to a particular area code. Suppose you live in New York but most of your friends and family live in Los Angeles. You could choose to have an area code from Los Angeles added to your phone, so that all the calls that originate in LA count as local calls rather than long distance calls. That way, your friends and family pay only for a local call even though theyre calling you from across the country.

For more information about VOIP and tips on choosing a VOIP provider visit http://www.voip-basics.info