A VoIP (Voice over Internet Protocol) phone system converts voice conversations into digital data and transmits them over the internet instead of traditional telephone lines. Here's how it works:

1. Voice Conversion: When you speak into a VoIP phone, your voice is converted into digital signals through an audio codec.

2. Data Transmission: These digital signals are then transmitted over the internet in data packets. This is done using either a dedicated VoIP network or existing internet connections.

3. Routing: The packets are routed to the recipient's device (another VoIP phone or a landline) using various protocols like SIP (Session Initiation Protocol).

4. Voice Reconstruction: At the other end, the digital data is converted back into audible sound through a codec, allowing the recipient to hear your voice clearly.

VoIP systems often come with features such as call forwarding, voicemail, video calls, and conference calling, making them versatile and cost-effective communication solutions for businesses.