Key takeaways
Considering changing your business phone system from a traditional phone line to VoIP? There are several reasons this is beneficial to a business, but it’s not always going to be the go-to solution for every business. Join us as we dive into the pros and cons of VoIP vs landline systems to help you decide which option is best for your business.
In this article…
What is VoIP?
Voice over internet protocol, or VoIP, is a technology that uses the internet to create phone calls. Effectively, the technology transforms voice signals into digital packets, which are then transmitted to the receiver. The process of packet transmission is so fast that conversations seem to happen in real-time as they would on a traditional landline system.
Here’s a breakdown of the VoIP process from transmission to receipt:
- A VoIP endpoint is used to facilitate a call. An endpoint can be an IP phone, a smartphone, or a laptop or desktop computer.
- The VoIP technology then converts the audio from the call into data packets.
- Using the internet, the software transmits the data to the recipient.
- Within milliseconds, the recipient receives the data packets, which the software translates back into voice audio.
Pros of using VoIP vs landline
In the competition between VoIP and landline phone systems, VoIP has a wide array of benefits compared to the older landline technology. Here’s a breakdown of each.
VoIP features
With VoIP, it’s easier to get dedicated features that simply aren’t present with landline phones. In fact, many providers make a point to deliver business-first functionality in their various plans. As a rule, feature numbers tend to increase with the amount of money spent, but some providers have blanket features across all plans. Here are some key features of VoIP:
- Call management: Auto attendants or interactive voice response (IVR) are almost always available with VoIP systems. These features quickly ensure that each customer is sent to the appropriate department or agent. IVR is particularly useful because it even allows for bill-pay and can be empowered with AI. Additionally, VoIP providers often make management features like call forwarding and call screening available by default.
- Phone number availability: With most VoIP services, businesses will find four distinct types of numbers:
- Local: This provides inroads to local jurisdictions. Customers are more likely to do business with a company that seems like it’s based locally. Local numbers are available without the need to establish branch offices in local areas.
- Toll-free: This serves as the opposite of local numbers. Toll-free numbers make even small businesses seem more national. These also deliver a free-to-dial experience to your customers so that reaching out to businesses is easier, even when a business isn’t local.
- Vanity: While numbers are memorable, words tend to stay in the minds of customers more easily. With vanity numbers, your business number will spell out words or phrases. A classic example is 1-800-FLOWERS.
- International: When looking to expand your business internationally, a number in the intended market helps immensely. These numbers cost nothing for your foreign customers to dial; it will feel like they are reaching a branch office within their own country.
- SMS and MMS: In addition to business telephony, VoIP systems also offer the ability to text your customers. This feature is available by default with most providers, and it’s a major benefit when comparing VoIP vs Cellular.
Scalability
This technology is one of the most scalable communications solutions available. This is partially due to the availability of features for those that need them. Additionally, most providers have at least three plans so that businesses can select the one that best fits their size.
Mobility
VoIP is inherently mobile thanks to its ability to be used across multiple devices, which are also called VoIP endpoints. Here are a few examples of the technology’s built-in mobility:
- VoIP is inherently multiplatform. Users are able to utilize desktop or laptop computers, smartphones or tablets, or IP desk phones.
- Most providers also entail easy number portability. This means that, with the help of your prior carrier, you’re able to send numbers to a new VoIP provider with a small turnaround time.
- Find me, follow me allows users to quickly send calls to mobile devices seamlessly without dropping the call.
Cons of using VoIP
Though VoIP has several beneficial benefits for business, there are some limitations that you should be aware of. These include:
Needs electric to operate
With VoIP, your phone system is going to need a constant draw of power to function. This is not the case with a landline because power runs through the copper lines. There are situations where a landline will not work without electricity, but with VoIP, when the electricity goes out, so does the phone system.
Other challenges of VoIP
With VoIP being such a great option for most businesses, there are still some challenges to be aware of when switching to a VoIP phone system. Some of these challenges include:
Security
Since VoIP is making calls across the internet, this type of phone system is susceptible to cyberattacks. There are steps that a business can take to minimize these risks. However, if your company deals with sensitive information, making sure that the right security protocols are in place from the VoIP provider you chose is imperative. For example, HIPAA (Health Insurance Portability and Accountability Act) compliance may be required if your business deals with sensitive patient information.
Phone Echoing
Sometimes calls over the internet have issues with lag. This means there is a slight delay between what is being said and what is being heard. If the delay is significant enough, you may hear an echo. This echo can be minimized, but without a high-speed connection and optimal hardware, it may still be a challenge.
VoIP software recommendations
RingCentral
RingCentral is a VoIP and unified communications (UC) provider that delivers a communications system that’s based in the cloud. This provider is known for its multiple communications channels, high 99.999% service uptime, and robust collection of over 300 integrations. RingCentral also includes a wide array of features, including interactive voice response (IVR), internet fax, call forwarding, and visual voicemail.
Vonage
Vonage is one of the first VoIP providers in the U.S., and offers a strong business VoIP option. Vonage has a robust 99.999% uptime and also has bundled minute options for making calls to more than 52 countries. Vonage is a useful option for those considering this type of international business because it also has international virtual numbers in over 80 countries.
Grasshopper
This provider serves as a virtual phone system for those just looking for calling capabilities and virtual numbers. Grasshopper stands out thanks to its solopreneur-oriented True Solo plan and its inclusion of all features in every plan tier. Grasshopper also doesn’t charge per-user pricing, which is different from most providers. Grasshopper grants every customer a dedicated phone number that can be local, toll-free, or vanity.
Still not seeing the right solution? Check out our VoIP software guide to find the tool that’s right for your business.
What is a landline?
A landline is a traditional telephone line, which is also known as a POTS or plain old telephone service. This legacy technology uses copper wiring to transmit voice audio from the sender to the receiver. This copper wiring spans the world with even transatlantic and transpacific cables linking countries so that telephone service is always available.
Pros of using a landline
There are multiple reasons why landline telephones have been used for more than a century. Here are a few to consider:
Easy to locate
Landline phones are hard to lose. With a physical apparatus present on your desktop, finding your phone and making a call is simple and plain. With a VoIP or cellular phone, you can easily misplace your hardware.
Emergency calling is location-based
With landline phones, emergency services can quickly locate users when they dial 911. This is because these phones are location-based. With VoIP and cellular service, the numbers are much more mobile, and users have to sign up for E911 to ensure that emergency services are properly available.
Cons of using a landline
While there are some considerable advantages to using landline calling, there are also numerous disadvantages, such as:
Higher cost
With a landline, you’re going to pay much more than you would with a VoIP provider. Not only will carriers charge per-minute calling rates, but dialing even within the continent will incur long-distance fees. This is because the copper infrastructure requires consistent maintenance, and carriers offset this by charging these fees.
VoIP, on the other hand, requires only an internet connection and is far more flexible. As a result, users pay a blanket amount for all calls in the U.S. and Canada, and pay very little comparably to landlines when calling out-of-country. There are even providers with unlimited calling packages to certain countries.
Comparing VoIP vs landline for business
From a calling options perspective, VoIP comes out ahead of landline. This is because landline phones are designed for a single use: calling. With VoIP, you can also send short message service (SMS) and multimedia message service (MMS) texts. This provides additional avenues in which to communicate with your customers.
Hardware Needs
Hardware is very important for landline devices. There has to be a copper wire infrastructure, phone cables, and of course, the phone itself. With VoIP, you’re not as shackled with hardware requirements. While in-house VoIP will require a PBX setup, most modern VoIP is done as a service through a hosted VoIP provider. This means that you’ll only need an endpoint and an internet connection in most cases. Very little physical infrastructure is required, so VoIP tends to be less prohibitive insofar as hardware requirements.
Setup and Maintenance
As landlines have very specific hardware requirements, this also means that a solution like this also requires more setup and maintenance. Conversely, setting up a VoIP system typically requires installing and configuring software to connect to the VoIP provider’s service. Once that’s done, you can begin calling.
Cost
Landlines tend to be more expensive because they rely on underground, overground, and undersea infrastructure. The carriers pass the price of the upkeep of these systems onto the consumer, which means that customers pay per-minute and are charged extra based on the distance of the call. In most cases, VoIP subscribers can call around North America with a single monthly subscription rate. While calling overseas sometimes costs per-minute rates, these rates are usually very inexpensive.
Businesses that benefit from a VoIP phone system
Adoption of VoIP system has grown exponentially since approximately 2010, with estimates anticipating that by 2033, the global VoIP industry will be worth some $472 billion.
VoIP is definitely agile enough to be used by most businesses. For example, VoIP services are very useful for solopreneurs and small businesses because these services grant access to virtual or direct inward dial (DID) numbers. These are business numbers accessible from any device, even personal smartphones.
Additionally, these same companies benefit from the cost-savings of VoIP for small business; charges are only per-minute when dialing internationally, so businesses making many domestic calls only pay one flat rate per user. Converting to a VoIP phone system is also drastically easier when compared to the process of adding a landline connection. So, is VoIP better than landline? For most businesses with the internet speeds to support it, yes.
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