A VoIP system includes the following basic elements:
terminals, including IP phones and software applications running on computers;
LAN infrastructure, consisting of wiring and switches;
a softswitch or call manager, running a SIP server that acts as a proxy to set up phone calls, manages the terminals, provides registration, authentication and permission management of the phones, plus software applications like call detail record generation, Interactive Voice Response (IVR) and Automated Call Distributor (ACD) functions;
a router, which connects LAN broadcast domains together and to WAN circuits;
gateways to perform format conversions between the VoIP world and the PSTN;
and optional connections to the PSTN, the Internet and to managed IP VPN services and SIP trunking services.
A firewall is needed when connecting to the Internet.