How it works
The microphone captures speech, a codec encodes the audio and the network carries packets to the other party. SIP or another signalling mechanism may manage call setup.
Business example
Employees in several cities can receive calls on IP desk phones while remote colleagues use applications on laptops or smartphones.
What to consider
Voice quality depends on latency, jitter and packet loss. VoIP does not automatically mean free calling; number rental and external calls may still incur charges.