10 Common Business VoIP Terms You Must Know in 2019

Have you just started to search for the business VoIP phone system as an alternative to your existing telephony?

Then chances are higher that you have come across a few VoIP terms and acronyms which you have never heard of. After all, we can’t be experts in every field!

It is true that these terms are confusing as a beginner. In fact, the term VoIP itself is an acronym, which a lot of people cannot define properly. So, many times people feel discouraged to understand this new technology.

However, if you want to find the best VoIP service provider for your company, then it is important that you know these technical jargons properly.

Below we have listed a few common business VoIP terms and acronyms that will help you to understand the system better and take an informed decision for the benefit of your company.


Let’s start with the most basic one. VoIP stands for Voice over Internet Protocol. This is a technology which enables us to send and receive data through the internet. This data can be in any form like voice, video or other multimedia transmissions.

VoIP phone calls are cheaper as they don’t have to transmit through some dedicated copper lines as in case of traditional telephones. A VoIP phone system converts your calls to data packets and sends them over the broadband connection. Any business, small or large, can benefit from the feature-rich solutions offered by the voice over IP telephony.

Private Branch Exchange (PBX)

This is another very common term related to business VoIP. PBX (also known as phone switch) is the technology behind your VoIP phone system. It works as a connection between a private organization and Public Switched Telephone Network.

A PBX controls everything related to your phone like connecting all the office telephones, receiving calls in different lines, rerouting calls, automating menus, voicemails etc.

In the case of on-premise PBX, the hardware is maintained by your on-site support staffs, whereas in case of hosted PBX your VoIP phone service provider handles the entire thing. You can go for either of these depending upon your organization structure and current need.

Direct Inward Dialing (DID)

Direct Inward Dialing or DID is a specific business VoIP feature which is more beneficial to a larger team. This enables enterprises to distribute individual phone numbers to all the users of a particular voice over IP phone system.

The telephone company allocates a range of numbers which are connected to the customer’s PBX system. With Direct Inward Dialing, the PBX can route the calls to the desired person within the same organization.

Public Switched Telephone Network (PSTN)

PSTN or Public Switched Telephone Network is the collection of all public circuit switched telephone networks, including the commercial and government own ones. PSTN is also known as the Plain Old Telephone System or POTS. In earlier days, it was a network of analog telephones. However, with advancement in technology, PSTN is now digital.

The PSTN system adheres to the technical standards created by the ITU-T and uses E.163 and E.164 address space. These address spaces are commonly known as telephone numbers.

Interactive Voice Response (IVR)

Interactive Voice Response or IVR is the advanced version of an auto attendant. It is a voice technology that enables the system to detect voice and touch tones in addition to the standard telephone button choices.

The IVR system is capable of handling ‘yes’ or ‘no’ type of questions and simple automated tasks related to these responses. It can control any function where the interface is dependent on simple menu choices.


This is another business VoIP term which you’ll find in your search for the best VoIP service provider. A softphone is a software application which enables you to make phone calls from your computer or mobile device instead of the telephone.

A softphone can replicate the dial-pad and functions of a real telephone and lets the user make and receive phone calls over the internet. It is a great choice for those who want to make and receive calls on the go or don’t want to opt for the hassle of a telephone system.


Bandwidth is the volume of data that can be transmitted over an internet connection within a given time period. It is generally measured in bits per second (bps) for internet speed and hertz for phone/ analog system.

Bandwidth helps to represent network capabilities and speed limitations. Higher the bandwidth, better will be your internet speed.

Session Initiation Protocol (SIP)

Session Initiation Protocol or SIP is a specific protocol that enables VoIP and other text and multimedia sessions like instant messaging, video and other services to work. It is similar to H.323 (another VoIP telephony protocol) but less complex than that.

Because of its easy implementation and simpler connection process, SIP is the predominant signaling method. It is used for signaling and controlling multimedia communication sessions for voice, message or video calls.

SIP Trunk

A SIP trunk is the modern version of the age-old business phone system. It acts as a virtual connection between the Private Branch Exchange and the Public Switched Telephone Network. It uses an internet connection to enable cloud phone services.

Nowadays, more and more companies are moving to SIP trunking to take advantage of the hosted VoIP services. You can bridge your on-premise PBX system with cloud and get more modern features.


The last one on our list is voicemail. It is a business VoIP feature that allows the users to leave a voice message when the person called is unavailable or is busy in some other conversation.

This voicemail system converts the analog voice signals to digital ones and stores them in your mailbox. With XenVoice, you can access the voicemail messages from your phone, email or in your preferred channel like Skype, Slack, and WhatsApp.

Wrapping Up

VoIP might be a new term for you, but it need not be confusing. Choose a VoIP phone service provider who takes care to make you feel comfortable with this new technology. Don’t let the fear of business VoIP jargons stop you from taking advantage of the new age business VoIP system.

One Comment

  1. David said:

    This will be a perfect treat for the people who are willing to know about caller IDs and voice over IPs. This website will provide you with all the things you should know about Caller IDs and voice over IPs.

    March 29, 2019

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