Technology Explained: How Does Skype Work?

2009 By Stefan Neagu

Skype, like many other VoIP (Voice over Internet Protocol) clients available, has changed the way we think about communication and keeping in touch with loved ones over great distances.

Whereas as little as five years ago, most people still had to rely on obscenely expensive mobile and PSTN (Public Switched Telephone) networks to carry their voice over short and long distances. Today, everyone seems to be using in one way or another VoIP.

As a reader of MakeUseOf and probably a geek, you must have asked yourself at some point – how does Skype work?

Skype, one of the most comprehensive multi-platform VoIP applications, running on a Macintosh

VoIP owes its versatility to another fantastic technology, the Internet. Instead of sending signals via a PSTN network, be it analog or digital, a VoIP application usually uses SIP (a variation of the standard TCP/IP protocols) to create data packets, and sends them on the same network you use for email and web surfing.

By using data packets, the technology can be used to carry more than the standard mono voice your old telephone does; VoIP can carry text, images, live video and high quality stereo sound as well as ’screen sharing’, depending on the speed and reliability of your internet connection.

With the continually expanding broadband users market, more people are able to use VoIP without investing in a separate physical connection or contracts.

A Tesco VoIP phone designated for home use. It connects to an ethernet port on the router and the landline for emergency calls.

The journey starts at the receiver, which can range from specialized hardware appliances like the ‘Skype-phones’ and Cisco VoIP phones to software applications installed on other mobile terminals or computers. All devices must be capable to send and receive data packets via an IPv4 network. Your voice is captured and transcoded from the analog format that the microphone captures, into a digital format, then passed on to a compressor that minimizes the size of the audio stream enabling transfer on slow connections.

An VoIP enabled phone disguised as an old-style PSTN machine. These are becoming more common in businesses as a simple measure to reduce costs of long distance calls and provide improved security via encryption protocols.

The audio stream is then divided into small pieces, each small enough to fit in a packet, which is stamped with the destination address and sent through the network.  Since VoIP uses SIP as the means to spread, it is inherently prone to its negative sides, which are quite a few, since it was never engineered to support live conversations; VoIP is susceptible to stutter and latency.

Gizmo, a multi-platform VoIP application, a worthy competitor to Skype.

The receiving end must reconstruct the packets sequentially for ideal reproduction, which does not happen on most public networks, which are prone to congestions during peak hours. Latency and packet loss can render the receiving end to be unable to reconstruct the complete audio stream resulting in blank audio space for short periods.

Although it’s much more versatile than traditional PSTN communications, VoIP has been criticized by many as being unreliable, especially in emergency situations where electrical power is absent or intermittent. Supporting hardware such as wireless routers need electricity at all times to function properly. Most people in the United States still keep a landline for emergency situations, which can provide enough direct current to power most analog phones without any additional power sources.

Emergency services have strongly objected to the use of VoIP for emergency calls due to the inability to locate the caller within a reasonable area. For example, a user connected to the office VPN network would appear to be in the server building instead of the real location.

A Skype-phone, like the one pictured above, will connect to any available WiFi access point to access the internet. Similar applications will run on select SIP-enabled mobile phones, like the Nokia N70 (it can also use the native mobile carrier data network if available).

In ideal situations, where a broadband connection and electricity are available at all times, VoIP technology provides an incredibly cheap and comprehensive way to communicate, mitigating roaming charges that traditional service providers require for long distance calls. Many consumer VoIP service providers offer free calls within their user base of Internet connected clients (computer-computer, skype-phones and other terminals). They also offer to interconnect with traditional networks for low fees. Some, like Skype, even offer standard telephone numbers than can be dialed from any telephone and which redirect to your Skype enabled device.

There are many VoIP service providers, and reviewing the capabilities of each would take an entire article. Besides Skype and Gizmo, you should also check out Vonage and this comparison list.