The VoIP “compressor” converts analog voice signals into digital voice data packets and sends them over the IP network. The VoIP “decompressor” extracts the voice signal from the recipient data packets. In simple words, the function of a VoIP codec is to manipulate a particular voice signal at two endpoints to enhance the transmission and quality of a VoIP call.

A VoIP codec can exist either as a device or software. A proprietary VoIP codec can be a standalone device or hardware for an organization. Free and open source VoIP codecs are available as software or a computer program.

Two or more VoIP devices in an enterprise use the same codec to communicate. When the transmitter and receiver channels in a VoIP call use different codecs that aren’t compatible, an intermediary device known as a transcoder bridges the gap between them.