The Internet is budding into a universal communication network and it is expected that it will carry all types of circulation, including voice, video and data. Among them, telephony is a solicitation of great importance, predominantly because of the weighty returns it can generate. In order for the Internet to establish a smart substitute to the outmoded Public Switched Telephone Network (PSTN), it must deliver great eminence “Voice over IP” (VoIP) services .Voice over IP (VOIP) uses the Internet Protocol (IP) to convey voice as packets over an IP network. So VOIP can be reached on any data network that uses IP, like Internet, Intranets and Local Area Networks (LAN). Here the voice signal is digitized, compacted and transformed to IP packets and then conveyed over the IP network.