In other words, VOIP needs bandwidth so that voice conversations are intelligible by both parties. Your broadband Internet connection (provided through a Fiber, Cable, T-1 or DSL service) provides that bandwidth.
Basically, bandwidth is the amount of digital data that can be transmitted in a certain time period. Internet connections are usually measured in KiloBits Per Second (kbps). Your connection may be rated at 512/128 kbps. This means that the upload stream (leaving your computer) has a maximum bandwidth of 128 kbps and download stream (coming to your computer) has a maximum bandwidth of 512 kbps.
For example, a web page that is 3000 bytes can theoretically viewed in 0.05 seconds – almost instantaneously – at a download speed of 512 kbps. However, in the real world web pages don’t usually load that fast. That’s because data is held up, or delayed by various factors. Latency is the delay caused by the physical limitations of each piece of hardware the data is passed through. Delays are also caused by pathway congestion, error checking, transmission negotiations and extra data sent with the web page to identify its type, origin and destination.
What this means for VOIP is that enough bandwidth must be supplied to allow for the transmission of the actual voice data in real time as well as extra bandwidth for the overhead required for any data transmission.
So how much bandwidth does voice data use up? Well that depends on the codec (enCOder/DECoder) used to compress the data. Anywhere from 16 to 64 kbps is normal. Add onto that the extra overhead of about 10 to 24 kbps. In total, VOIP uses 26 to 88 kbps per call. As a general rule, assume that you will need at least 88 kbps per concurrent call to use VoIP reliably. Refer to DLS Analysis Tool to calculate your actual bandwidth requirements.