Voice over Internet Protocol (VoIP) technology helps devices like desktop computers, smartphones, and tablets make and receive telephone calls. Instead of using an analog signal like traditional phone landlines, VoIP converts audio to a digital signal that can be transferred to any computer or mobile device.
As working from home becomes more common, people are turning to VoIP as a phone service that can be used over a business broadband internet connection. Better yet, a VoIP phone number is virtually identical to a traditional phone number, so you can still call friends, family or colleagues who are using traditional phone services.
There are several free VoIP services, such as Google Voice, but those could pose some limitations on long-distance calls or audio fidelity. There are also paid VoIP services, such as RingCentral, that can accommodate multiple phone numbers and lines. Read our RingCentral review to learn more.
Here's an overview of business VoIP and traditional landline telephones, including the pros and cons of each, to help you determine which type of business phone system would be best for your organization.
What's the difference between VoIP and a landline?
The most significant difference between VoIP and a landline is VoIP's flexibility. Traditional, land-based phone lines require a physical connection to a telephone network, which needs switches to transmit analog audio to other phones worldwide. VoIP, on the other hand, relies on a broadband internet connection.
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Here are some other differences between VoIP and landlines.
- Cost: There are some substantial cost differences between the two business phone systems. VoIP relies on your existing internet connection, so you don't need to buy additional hardware.
- Scalability: With a VoIP service, you can add a new number to your corporate plan with a few mouse clicks. But because a landline is tethered to a physical location and device, adding new lines as your business grows can quickly become a costly hassle. If you need a new line, a technician must travel to the physical location to install it. Physical lines also need regular maintenance to ensure nothing is eroding and everything is running exactly as it should.
- Capabilities: A VoIP phone line offers expanded capabilities that give the technology an edge in functionality, including Short Message Service (SMS), video conferencing, recording and archiving. But if there's ever a power or internet outage, you'll lose your ability to communicate with the outside world.
What are the pros and cons of VoIP?
VoIP technology is an excellent business phone system option, but it isn't suitable for every organization. Here's a look at VoIP's pros and cons.
|Lower cost||Dependence on broadband connection|
|Rich functionality||Limited emergency services|
|Portability||Audio and latency issues|
|Ideal solution for global teams|
- Lower cost: VoIP phone lines tend to have a lower total cost of ownership than landlines because they're compatible with multiple devices. An employee is usually assigned a corporate computer so that they can easily access a dedicated VoIP phone line without needing extra hardware. VoIP phone lines range from $19.99 for individual users to $69.99 for corporate accounts, making it easy to add lines as a business expands and its workforce grows.
- Rich functionality: Because a VoIP phone line works with computers and smart devices, callers can send texts, image and video files, and faxes. VoIP lines also include typical business phone system features like caller ID, conference calling and video conferencing. A VoIP number can easily forward calls to remote teams or employees working from home, enabling you to provide constant support for your customers.
- Portability: VoIP phone lines are completely independent of specific devices or locations. To access your VoIP number, you can tether it to a mobile device or laptop to receive calls from clients and colleagues wherever you go.
- Scalability: Because VoIP is cloud-based technology, VoIP phone lines are easily scalable for teams and growing businesses. An IT administrator can quickly create new VoIP lines as needed in seconds without contacting a service provider. Once a new VoIP line is created, a new team member can make and receive calls without purchasing any extra equipment. Because VoIP phone lines rely on equipment a business already has, like PCs, most businesses already have all the equipment they need and can quickly scale as the business grows.
- Ideal solution for global teams: Thanks to its flexibility and scalability, VoIP is an ideal solution for teams spread out worldwide. You can create VoIP phone lines for specific regions or countries to provide local support without long-distance charges. Alternatively, your business could use a VoIP line to forward calls to the proper team members, ensuring consistent customer support.
- Dependence on broadband connection: VoIP's biggest drawback is its reliance on a stable broadband internet connection. A VoIP phone line works by transmitting data packets through a broadband connection to another line; without a consistent connection, you could lose audio quality or drop a call entirely. In an internet or power service outage, a VoIP line won't work.
- Limited emergency services: When someone places a 911 call, emergency service providers track the phone number to find a home address or GPS location so they can send help. This is a problem with VoIP numbers. Because a VoIP phone line appears as an IP address, it's challenging for emergency services to pinpoint someone's physical location. A delay can be catastrophic in a situation where every second counts.
- Audio and latency issues: If there's a bandwidth or latency issue, such as an unstable connection or multiple simultaneous users on a single network, problems could ensue. Without the proper connection, the call quality on a VoIP line could suffer, creating stuttering audio or teleconferencing with lags and delays.
What are the pros and cons of landlines?
Many businesses use traditional landline phone systems. Here's a look at their pros and cons.
|Reliability in emergencies||Higher cost|
|Good audio quality||Regular spam calls|
|Ease of use||Limited functionality|
- Reliability in emergencies: A traditional landline is tied to a physical connection that doesn't rely on a powered device. If the electricity goes out in your neighborhood, you can still dial 911 and connect to an operator. Because a landline is tied to a physical location and device, emergency services can quickly and easily locate an address and send help.
- Good audio quality: A land-based phone line uses a tried-and-true network of physical copper lines that will be operational for years to come. With a landline's strong connection, you'll get fewer dropped calls, and every call you make will deliver clean, clear audio.
- Ease of use: Traditional phone line hardware options don't have many frills and are fairly self-explanatory. These devices usually have a handset or a receiver and a keypad. All you have to do is enter the correct number and your call will go through. Landlines are usually located in a stationary position within a business or home (unless you have a wireless receiver), so they're easy to access when someone calls.
- Higher cost: A traditional option for phone service tends to cost more right from the start. The service usually costs more than low-end options, and for every line you add, that cost increases. Imagine running a business with 100 people with dedicated landlines for which you're paying $25 per month for each number, and you'll see how quickly expenses can get out of control.
- Regular spam calls: In 2003, the National Do Not Call Registry was created, making it illegal for telemarketers to call wireless phone numbers. But as anyone with a cell phone can tell you, those regulations haven't panned out very well. No anti-spam regulations exist for land-based telephone lines, so spam calls are a regular occurrence.
- Limited functionality: A landline is best used for audio calls. Because they were created before text messaging, video conferencing, or image sharing, traditional phone lines don't offer the versatility of the broadband communication devices we use today.
- Stationary devices: When working with a traditional landline, you're confined to the specific location where your designated telephone is installed. If you ever walk away from your desk, even for a few moments, you could potentially miss a critical call from a colleague. Nobody enjoys playing phone tag.
How to choose between a VoIP and a landline
There are a few critical questions worth asking when you're choosing a business phone system and deciding between a VoIP phone service and a traditional landline.
- How big is your team? If you have a large team working from home or employees scattered across different regions, VoIP may be the right decision. Because of VoIP's scaling and portability options, it's an ideal, reasonably priced option for teams that don't necessarily work together. On the other hand, if you have a small, localized team that needs just a few no-frills phone lines, a landline phone service may be the best route.
- What are your equipment concerns? If you don't want the added expense of individual telephones for each employee, focus on VoIP options. But if the hardware costs are considered part of the onboarding process anyway, getting telephones for your landline may be the correct route.
- Which features do you need? If you only need to make short local calls, a landline is a good option. However, if you want to transfer files from the field, send video to employees or colleagues, or hold video conferences with an entire workforce, VoIP is the right route.