Why is VoIP so cheap?

Why is VoIP so cheap?

Jim Gurol (VP of Operations, Tierzero) gives expert video advice on: What is VoIP?; Is VoIP free?; Why is VoIP so cheap? and more...

The reason why VoIP is cheap is because it uses a technology called the Least Cost Routing. And what that does is when you place a phone call to an area code or to a different state, it finds out where it can send that call in a data form. And since the internet is free, that data travels over the internet to all these different locations in different states and then it is converted back into VoIP and to analog at that point and so when you have that data going over to the state and then it gets converted, it's a local call at that point. You are not making those long distance calls, so VoIP providers can save money and therefore pass that savings on to you.