A Voice over Internet Protocol, or VoIP, transmission is initiated by converting voice into digital format. This can be done by Analog Telephone Adaptor (ATA) or by the computer itself using software. In the Public Switch Transmission Network (PSTN), the dialing of the number initiates the call by connecting the call to the public switch and routing the call to the correct partys telephone number through the telephone network.

A VoIP network also has similar functions like that of PSTN, in addition to the IP provider and Internet Service Provider (ISP). The major components of a VoIP network are user devices (one or both ends), a call processing server, VoIP gateways, gatekeepers and an IP network. The user device consists of VoIP phones, traditional phones with accessories and computer-based devices. VoIP phones may be hard or soft phones.

A VoIP hard phone is like a traditional phone, but instead of a phone jack, it has an Ethernet port through which it communicates directly with a VoIP server or another VoIP phone. It doesnt need a personal computer, only an internet connection. These hard phones may also come cordless.

A dialup hard phone is one with a built-in modem instead of an Ethernet port. A wifi hard phone is built with a wifi transceiver to connect to a wifi base station to be connected to a remote VoIP server. This can be used to transfer calls to a GSM network.

A soft phone is run by software in the computer. This requires appropriate hardware such as a microphone, a speaker or a USB port. Once dialed, the phone number is processed by the call processor, which is actually hardware running a database mapping program called soft switch; the software manages all connections. This is also called IP PBX (private branch exchange), similar to the PBX of the PSTN lines.

There are gateways and gatekeepers that control the call admission and bandwidth management. They also control the creation of IP packets that contain the voice data and other information about the call.

Finally, there is the IP network, which consists of distributed routers ensuring connectivity. This IP logical switch is referred to as the soft-switch architecture. These four components form the phone system for VoIP, in addition to the software and various protocols through which the call is smoothly communicated.