Peer to peer Internet telephony uses the technology of compressing analog audio data into small packets, which can be transmitted over protocol-based networks such as the Internet and WAN. These small packets of data are usually sent in the digital format, which is converted back into voice signals at the receiving end. This brings about significant cost savings because voice is now transmitted as just any other form of data. This has resulted in the integration of voice with various other web-based applications, and has led to the development of many new features that were impossible during the heyday the traditional phone networks.
New VoIP (Voice over Internet Protocol) phone services such as Magic Jack, Vonage and Skype are paving the way around the world. This new technology in telephony is making communications cheaper then ever before. No longer are we chained to huge phone bills, and it's about time. These VoIP services are not only making it affordable to communicate with friends and family over long distances but are forcing the big phone companies to become more competitive for your business. So VoIP is not only saving customers who are using it, but customers who are not.