VoIP allows users to make phone calls using an Internet connection instead of a traditional phone line. It works by converting voice signals to digital data that is transmitted in packets over the Internet. A VoIP network uses protocols like SIP and RTP to setup calls and transmit voice data. Components include VoIP protocols, gateways to interface with the PSTN, and codecs to compress voice signals. Businesses are attracted to VoIP as it can help reduce costs while improving utilization of bandwidth and network management. However, security risks like hacking and eavesdropping exist since VoIP uses the public Internet.