VoIP (Voice Over IP) is becoming an alternative way of voice communications over the Internet. To better utilize voice call bandwidth, some standard compression algorithms are applied in VoIP systems. However, these algorithms affect the voice quality with high compression ratios. This paper presents a lossless data reduction technique to improve VoIP data transfer rate over the IP network. The proposed algorithm exploits the data redundancies in digitized VFs (Voice Frames) generated by VoIP systems. Performance of proposed data reduction algorithm has been presented in terms of compression ratio. The proposed algorithm will help retain the voice quality along with the improvement in VoIP data transfer rates