VoIP Cell Phones:
VoIP-enabled cell phones are just entering the consumer market. In the United States, only T-Mobile's HotSpot@Home service allows customers to make cell phone calls over a VoIP network. HotSpot@Home relies on a device called a dual-mode cell phone.

Dual-mode cell phones contain both a regular cellular radio and a Wi-Fi (802.11 b/g) radio. The Wi-Fi radio enables the cell phone to connect to a wireless Internet network through a wireless router. If you have a wireless Internet router in your home, or if you're sitting at a Starbucks with wireless Internet access, you can use your cell phone to make VoIP calls.
Here's how it works:
When the cell phone is in range of a wireless Internet network, the phone automatically recognizes and connects to the network. Any calls you initiate on the wireless network are routed through the Internet as VoIP calls. With HotSpot@Home, all VoIP calls are free.

If the phone is out of range of a wireless Internet signal, it automatically switches over to the regular cellular network and calls are charged as normal.
Dual-mode phones can hand off seamlessly from Wi-Fi to cellular (and vice versa) in the middle of a call as you enter and exit Wi-Fi networks.

Similar to dual-mode cell phones are Wi-Fi phones. Wi-Fi phones aren't technically cell phones because they only have a Wi-Fi radio, not a cellular radio. Wi-Fi phones look like cell phones (small, lightweight handsets), but can only make calls when connected to a wireless Internet network. That means all Wi-Fi phone calls are VoIP calls.
Wi-Fi phones are useful in large companies and offices with their own extensive wireless networks. And could prove to be the next big thing, with the expanding market for municipal Wi-Fi. [source: Dr. Dobb's Portal]. Imagine that your entire city was covered by a high-speed wireless network. That means cheap (if not free) VoIP calls wherever you go.
In England, a company called Hutchinson 3G (or simply 3) has partnered with the popular VoIP service Skype to introduce the 3 Skypephone. The Skypephone allows users to make free cell phone calls to other Skype users. The phone can also make regular cell-phone calls to non-Skype users for the normal fees.
Here's how it works:
To make a Skype call using the 3 Skypephone, you have to be on 3's cellular network.
To initiate a Skype call, find a Skype user in your phone's address book and press the big "Skype" button.
The call first goes over 3's cellular GSM network to a fixed Internet line, which then connects the call to Skype [source: mobileSift].
From your 3 Skypephone, you can make free VoIP calls to other Skype users whether they have a Skypephone or not. You can talk to Skype users on their PCs or using other Skype VoIP products.
The 3 Skypephone isn't currently available in the United States.

Using VoIP:

Using VoIPChances are good you're already making VoIP calls any time you place a long-distance call. Phone companies use VoIP to streamline their networks. By routing thousands of phone calls through a circuit switch and into an IP gateway, they can seriously reduce the bandwidth they're using for the long haul. Once the call is received by a gateway on the other side of the call, it's decompressed, reassembled and routed to a local circuit switch.

Although it will take some time, you can be sure that eventually all of the current circuit-switched networks will be replaced with packet-switching technology (more on packet switching and circuit switching later). IP telephony just makes sense, in terms of both economics and infrastructure requirements. More and more businesses are installing VoIP systems, and the technology will continue to grow in popularity as it makes its way into our homes. Perhaps the biggest draws to VoIP for the home users that are making the switch are price and flexibility.

With VoIP, you can make a call from anywhere you have broadband connectivity. Since the IP phones or ATAs broadcast their info over the Internet, they can be administered by the provider anywhere there's a connection. So business travelers can take their phones or ATAs with them on trips and always have access to their home phone. Another alternative is the softphone. A softphone is client software that loads the VoIP service onto your desktop or laptop. The Vonage softphone has an interface on your screen that looks like a traditional telephone. As long as you have a headset/microphone, you can place calls from your laptop anywhere in the broadband-connected world.

Most VoIP companies are offering minute-rate plans structured like cell phone bills for as little as $30 per month. On the higher end, some offer unlimited plans for $79. With the elimination of unregulated charges and the suite of free features that are included with these plans, it can be quite a savings.
Most VoIP companies provide the features that normal phone companies charge extra for when they are added to your service plan. VoIP includes:
Caller ID
Call waiting
Call transfer
Repeat dial
Return call
Three-way calling There are also advanced call-filtering options available from some carriers. These features use caller ID information to allow you make a choice about how calls from a particular number are handled. You can:
Forward the call to a particular number
Send the call directly to voice mail
Give the caller a busy signal
Play a "not-in-service" message
Send the caller to a funny rejection hotline With many VoIP services, you can also check voice mail via the Web or attach messages to an e-mail that is sent to your computer or handheld. Not all VoIP services offer all of the features above. Prices and services vary, so if you're interested, it's best to do a little shopping.

Now that we've looked at VoIP in a general sense, let's look more closely at the components that make the system work. To understand how VoIP really works and why it's an improvement over the traditional phone system, it helps to first understand how a traditional phone system works.