With the advancement in communication technology, VoIp has become highly popular among individuals and businesses. It allows users to make voice calls, video calls, conference calls and send chat messages at a lower cost in comparison to conventional PSTN networks.
Although VoIP has become popular recently, the history of VoIP and internet was started a century ago at Bell Laboratories. In this blog we will learn how that internet powered calling system evolved as one of the most essential business communication and collaboration tools.
So let’s look at how VoIP went from an idea to something most of us use every day.
How VoIP Went From an Idea to Something?
Here is the history how VoIP started from an idea :
1- 1925: Where It All Started
In 1925, AT&T and Western Electric opened Bell Labs. Their goal was to improve communication technology.
By 1928, engineer Homer Dudley built something called the Voder. It was a machine that made human-sounding speech using keys, pedals, and sound filters.
The Voder was displayed at the 1939 New York World’s Fair. Visitors were astonished that it was able to produce words that resembled a human voice.
Later, Voder helped the U.S. military during World War II. They used it to scramble voice messages so enemies could not understand them.
In 1966, scientists in Japan used this same technique to make Linear Predictive Coding (LPC). This method turned voices into digital data that could travel across networks.
Even music groups like Kraftwerk used Vocoder’s tech in their songs. Today, we still use versions of it in cochlear implants, secure calls, and VoIP encryption.
2- 1969: The Internet’s Early Form
VoIP needs the Internet to work. That did not exist until 1969, when a U.S. government agency called ARPA (now DARPA) created ARPANET.
They built it so computers in different places could talk to each other, even during emergencies.
Back then, phone calls used dedicated circuits. ARPANET worked differently. It used packet switching, which broke data into pieces and sent it over different paths.
This setup made it stronger and faster.
Vint Cerf, Bob Kahn, and Bob Taylor helped build ARPANET’s rules. These rules became the base for the Internet we use today.
3- 1973: First Voice Sent Over a Network
By 1973, ARPANET connected over 40 computers at places like MIT and UCLA.
A team at MIT used Linear Predictive Coding to send the first voice packet across this network. This was the start of digital voice communication.
In 1974, they sent packets both ways, which became the first two-way VoIP call. By 1976, they even did a group call using this system.
Fun fact: It was illegal to use ARPANET for personal stuff. In 1973, a man sent a message asking about his lost electric razor. Technically, that was the first Internet “crime.”
4- 1975: CompuServe Opens Internet Access
Until 1975, only big organizations used the Internet.
Then CompuServe launched. It was part of an insurance company and let others “rent” time on its systems.
By 1980, CompuServe introduced things like email and online message boards. It later added the first instant messaging service.
CompuServe was big until the 1990s. Then AOL came along and bought it in 1997.
5- 1988: Better Audio Quality
In 1988, a new audio system called G.722 was approved. It sent voice data faster and clearer than before.
It offered “toll quality” sound, which meant calls sounded as good as regular phone calls.
This made VoIP more practical for businesses.
6- 1989–1991: The First VoIP Program
In 1989, a game developer named Brian C. Wiles created software so gamers could talk over a local network.
Then in 1991, John Walker made a version called NetFone. He released it for free. It only needed half the bandwidth of older systems.
This became the first real VoIP phone software. Walker used it to talk with his coworkers in Europe.
7- 1993: Video Calls Start
David Allen and Herold Williams ran a resort. Guests often left early for work meetings.
So they made TeleSuite, the first video conferencing system. Guests could now attend meetings from the hotel.
Hilton Hotels liked it and signed on. Later, Allen sold the tech to Polycom.
8- 1994–1995: Free and Paid VoIP Arrives
In 1994, a group launched Free World Dialup. It lets people call each other for free online.
A year later, VocalTec made the first paid VoIP app, called VocalTec Internet Phone.
It worked over the H.323 protocol and needed decent hardware to run. Calls were cheaper, but quality was low. Poor audio and dropped calls were common.
At this time, VoIP only made up about 1% of total calls.
9- 1997–1999: PBX Systems and SIP Are Born
In 1997, someone built a hosted PBX system in their basement. It lets people make Internet calls without big phone equipment.
This was the start of virtual business phone systems.
In 1999, Mark Spencer made Asterisk, an open-source version of PBX. Programmers from all over improved it.
The rise of VoIP needed a standard protocol. SIP (Session Initiation Protocol) became that standard.
SIP manages calls by handling location, availability, connection, and call controls. It works for voice, video, chat, and more.
Most VoIP providers use SIP today.
10- 2003–2004: Skype and Vonage
In 2003, Skype started in Estonia. It lets people call each other online for free. By 2005, it had 50 million users.
Skype added video calls, file sharing, and chat. It was bought by eBay, then Microsoft.
Vonage followed in 2004 and offered VoIP for businesses. It quickly grew to 2 million users.
11- 2004: VoIP Gets Legal Rules
In 2004, the U.S. government said VoIP was an “information service,” not a phone service. That meant fewer taxes.
By 2005, VoIP systems had to support emergency calls (E911), so dispatchers knew your location.
More laws around call recording and spam followed.
12- 2005–2006: Mobile VoIP Starts
In 2005, Calypso Wireless launched the first mobile phone with Wi-Fi. It lets people switch between mobile and Wi-Fi networks for calls.
In 2006, Truphone released a mobile app that used VoIP for calls and texts. It worked on Nokia, iPhone, Android, and BlackBerry.
13- 2010–2016: VoIP Becomes the Norm
By 2012, VoIP use was growing fast. SIP trunking grew by 83% in one year.
Businesses moved away from landlines. AT&T even asked to replace copper wires with IP-based networks.
VoIP systems added more features like mobile apps, video calls, and voicemail.
14- 2016–2024: Remote Work and AI
By 2018, VoIP was worth $20 billion in the U.S market. And after that when COVID-19 hit, the remote work exploded and use of VoIP technology was raised.
VoIP was not optional anymore. It was how teams stayed in touch.
VoIP tools now offer chat, video, call routing, voicemail, and CRM integration. They work on any device.
AI is also changing VoIP. Voice assistants and chatbots are helping in customer support. They reduce wait times and save companies money.
It is expected that conversation AI will save businesses $80 billion by 2026.
What’s Next?
VoIP keeps evolving. It is now tied to tech like AR, VR, and IoT.
It is not just about phone calls anymore. It is about how we connect no matter where we are.
Final Words – History of VoIP and Internet Telephony
VoIP has come a long way from early experiments with voice synthesis at Bell Labs to the fully connected, AI-powered systems we rely on today.
The internet was initially intended as a military project, and it was later adopted by hobbyists. Today, the internet has become an indispensable part of our lives; it is cheaper, faster, and more flexible than traditional phone systems, and is still developing.
New technology, such as VoIP, AI, AR, and IoT, is constantly making VoIP more efficient and easier to use. NetZero is one of the companies leading the way towards the future of communication, equipping society with numerous benefits for businesses and individuals.
Read More : VoIP Call Recording: How It Works & Best Software Tools to Use?
