VOIP Explained
So what is it? Well in a nutshell, VoIP is just another, cheaper way for you to speak to people all over the world. In the past, the "plain old telephone system" (POTS) was the only way to carry your voice across wires and cables to the person you were speaking to. However, now many people have broadband (fast) internet which is connected all the time. Since you can get webpages from around the world at no extra cost, it was inevitable that at some point people would start using the internet to talk to their friends instead of the POTS and in doing so, save a lot of money.
How do you save?
The saving comes with the significant price difference in phone calls. For example, a call from North Sydney to South Sydney is 25 - 40 cents depending on your carrier, but is closer to 10 cents (on average) with VoIP. That's just a local call, now if the same person in North Sydney calls a land line in Perth, the cost is still only around 10 cents, but could be several dollars with the regular phone network.