VoIP providers benefit greatly from the digitization that has taken place in the telecom industry. The decision to force the major telcos to share their networks with smaller competitors has also contributed enormously to the expansion of the VoIP industry. VoIP providers can hitchhike on the digital networks of the major telcos rather than having to build their own.

In the modern telecommunications environment, the vast majority of calls spend most of their lives as digital packets of information. Analog lines are usually only used for the first and last legs of a call's journey. VoIP providers cut out one or both of those legs, sending digital call information directly to the telcos' digital networks for delivery. This allows them to offer international and long distance calling at greatly reduced rates.

In addition to providing discounted services, VoIP providers are now offering their customers more options, better equipment, and most of the services telephone customers have come to expect. VoIP customers have access to call waiting, call forwarding, voice mail message centers, caller ID, 3-way calling, and much more. VoIP customers also have a range of equipment options.

VoIP equipment can be as simple as an analog telephone adapter (ATA) that converts the signal from your analog phone to a digital signal before sending it across the network. Customers can also choose dedicated VoIP telephones, Wi-Fi phones, and IP PBX systems for business. The range of equipment and services is expanding rapidly as VoIP telephone service becomes more and more popular.