Traditional phone calls work by allocating an entire phone line to each call. With VoIP, voice data is compressed and transmitted over a computer network. This means VoIP uses substantially less bandwidth than a traditional telephone call and is consequently more cost effective. There are however several other benefits to using this technology.

	Less expansive: VoIP Systems are about 20% less expansive to operate than classic circuit-switched networks. This depends on the IAP (Internet Access Provider) tariffs.
	Simplified infrastructure: With VoIP on your network you no longer need separate cabling for your telephone system. Voice and data uses the same network, no need to maintain separate telephone networks.
	Reduce operating costs: Because a VoIP exchange is based on software rather than hardware, it is easier to alter and maintain.
	Scalabable: Traditional PABX (Private Automatic Branch Exchange) based phone systems come in many size ranges and it may be necessary periodically to scrap existing systems and replace hardware; this is not the case with VoIP systems.
	Improve productivity: VoIP treats voice as if it were any other kind of data, so users can attach documents to voice messages or participate in virtual meetings using shared data and videoconferencing.
	A full system in which E-mail, Voice mail, fax, and telephone services are merged using a single communication infrastructure.
	Flexibility: A Virtual Private Network (VPN) is an allocated amount of bandwidth on the public Internet where public access is prevented through encryption. If your company has its own VPN and combines it with VoIP, you can set up a fully functioning office anywhere there is a broadband connection.
	Phone system that can change and grow on moment’s notice.