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The most important thing about VoIP technology is that its "digital." It's a technology that can convert audio signals into digital data, which can then be manipulated in the same way as any other digital data. Digitized voice can be saved as a file, cut and paste, merged with other digital data, edited and transmitted over the Internet.

VoIP delivers much more than a way to make free international VoIP calls. Because it's digital, VoIP technology can provide other facilities as well:

• Voice mail
• Conferencing
• Video integration
• Call routing
• IM (instant messaging)
• Active directories

The cost effectiveness of VoIP technology in comparison with the old PSTN (public switched telephone networks) derives from the fact that it does not require dedicated circuits or wiring. VoIP traffic (digitized data) is broken into packets on transmission, which are then reassembled on arrival at their destination. These packets are sent over IP networks (either public or private) that may also carry packets containing fragments of data relating to: emails, web pages, images ? going to the same or different destinations. Each packet contains the address of its destination enabling it to navigate a course through the spider's web that we know as the internet.

By using IP networks and in particular the Internet, VoIP can largely by-pass infrastructure owned by telephone companies and thus avoid their rental and call costs.

As with anything there are VoIP pros and cons. In particular the cons relate to VoIP security, which cannot be isolated from laptop security in a digital world. Sound quality is another issue, because voice data is broken into packets, transmitted and re-assembled at their destination. Given the nature of the Internet it's inevitable that these packets don't always arrive in the same sequence as they were sent.

Many of us equate VoIP with Skype VoIP. In fact there are many ways of making a VoIP connection that don't involve Skype:

• Analogue telephone adapters (ATA's) - enable standard telephone handsets to connect to the Internet. Many phone companies are now bundling ATA's with a VoIP service.
• IP phones - appear similar to conventional telephones but have additional smarts and RJ-45 connectors so they can plug into IP networks via a router.
• Computer to computer or peer-to-peer - this is the mode that Skype and its direct competitors use. In involves the installation of client software onto a laptop or desktop computer that is connected to the Internet.

VoIP technology is still very new and evolving rapidly. Wireless VoIP is now a major focus of attention. Inevitably the mobile phone carriers will have to find a way of competing with very low cost VoIP mobile phones. It won't be too many years before people stop asking: what is VoIP? Everyone will be using some kind of VoIP service.