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The concept for both is the same - send voice calls over data networks versus the traditional public switched telephone network. Phone calls are turned into packets/frames and sent over a shared infrastructure.
The advantage of using either is that the charges can be flat rate (doesn't matter how long you talk) and you may be able to integrate voice along with other services (like LAN traffic or Internet traffic) onto one local loop thereby saving a lot of money.
The major difference between the two is the underlying network used for transporting the data (frame relay versus an IP network) and their primary differences.
Voice over Frame Relay (VoFR) passes calls between fixed sites over a layer 2 data network. You can gain cost advantages using VoFR but each site must be connected to the same Frame Relay network so that a PVC (permanent virtual circuit) can be built between the two sites. This limits the flexibility of VoFR because sites communicating must have a PVC between them - both sites must be on the same network or on networks where the service providers have a FR NNI interconnection. Most FR providers are connected to only a couple of other FR networks - if you buy FR service from two providers it's nearly certain that you won't be able to connect them together - you'll have to buy the entire network from one vendor.
Voice over IP (VoIP) passes call over a layer 3 data network. This is normally the Internet but doesn't have to be (could be a private IP network). One of the big advantages of VoIP is that you can have two different service providers and still make calls between the two sites. Because IP networks allow any to any communication (unless your specific destination is blocked for security reasons by you or the destination) you can send data virtually anywhere. You do not have to get your service provider to setup a PVC to create a virtual connection between the sites.
Another big advantage of VoIP is that a number of service providers have been gateways to the PSTN and sell services allowing a VoIP call to make a call to a regular telephone - this is generally no available on FR networks.
This was first published in February 2003