An Internet phone is a communication device which is used for making phone calls over the Internet. It is also called as broadband phone and IP phone. Typically, an Internet phone uses Voice over Internet Protocol (VoIP) device to make a call. When a phone call is initiated, the Internet phone, which uses VoIP, changes the voice of user into digital packets. This is done once the analog-to-digital conversion is over. After converting the voice into digital packets, the phone sends the data over the Internet, to be received by the receiver on the other end.

As opposed to the circuit-switched telephony, Internet phones use Internet telephony to transmit telephone calls over the Internet. The circuit-switched telephony is used by traditional Public Switched Telephone Network (PSTN). Cost reduction is the main advantage of using Internet phone calls. Unlike regular long-distance calls, Internet phone calls are almost free. There are no carrier charges or pulse rate beyond the cost of having a working Internet. Its major shortcoming is its dependency on Internet and power. It becomes non-function during a power cut or when Internet cannot be accessed.

There has been a constant surge in the number of Internet phone users. It is a widely accepted and implemented form of technology. Many people are opting for Internet phone system to make calls cheaper. It is extensively used by corporate houses and providers of call center services. There is not much difference between using a regular phone and Internet phone. When using an Internet phone, you have to dial out and receive call the same way you would do if you were using a regular phone line. The only difference being the voice data is transmitted via the Internet instead of conventional phone lines.