Conversion of sound into digital signal
Encapsulation in IP packet
Transport over network
De-encapsulation and reconversion of digital signal into sound

This type of voice over IP has been around a long time.

Seldom used because the cost of long distance has dropped dramatically – domestic at least
Reliability and quality of transmission not high enough for business communications (or even personal use)
Difficulty in set up and use

The basic components of VoIP are:

Voice Processing
Call Processing
Packet Processing
Network Management