Phone systems for small businesses generally use one of two technologies. They either use voice-over-internet-protocol (VoIP) or landlines. Landlines use copper wires to transmit data, while VoIP uses your internet connection to transmit your voice as data. VoIP systems also have more features, better functionality, and a cost that can start as low as $19.95 monthly.
What Is VoIP And How Does It Work?
Unlike a landline, which requires dedicated wires, VoIP phone services use your business’ existing internet connection to convert and transmit audio as data. While Skype and other services like Vonage are examples of good VoIP services for individuals, other VoIP options like Nextiva and Star2Star offer the same technology, but on a larger scale for businesses.
With that in mind, VoIP also works in a nearly identical fashion to a traditional phone system. You can make and receive business calls using any type of phone, whether it is another VoIP phone, a cell phone, or a landline. It may run on a different network, but you can use it just like any other device. For more information, you can read our guide to VoIP systems.
How VoIP Systems Are Different From Landline Systems
There are several key differences between a VoIP platform and a traditional landline service. If you are a small business, the first thing you might notice is that VoIP systems are much cheaper.
A VoIP service can also do things that a traditional landline simply cannot do. For example, VoIP services allow you to use your mobile phone as an extension of your office phone, which extends your phone system to literally anywhere you are located. You can also integrate most VoIP platforms with outside business software like customer relationship management (CRM) platforms as well as take advantage of additional features such as advanced call routing and voicemail to email.
VoIP systems also give you the option to buy your equipment outright and have an IT team such as ITX Tech Group manage the service. For example, you can choose to rent the equipment from your service provider and have them host your service in the cloud. This cloud-based solution is typically best for small businesses due to its ease of use, cost-efficiency, and limited in-house support requirements.
However, the most significant technical advantage of VoIP services is their scalability. Landline systems are limited to the number of lines that you have connected, and adding more means installing and upgrading your hardware. VoIP systems, in contrast, only rely on your internet connection, meaning it can support an unlimited number of lines (depending on the strength of your internet connection). This drastically reduces your setup and maintenance costs.
Overall, VoIP systems are much cheaper than landline services. VoIP phone services can start as low as $19.95 per user/month. This pricing accounts for the cost of setup, equipment, and ongoing maintenance costs. In addition, you also must pay for an internet connection as well.
Landline costs usually vary by provider. However, you can expect to pay between $100 and $200 on your base unit, plus additional costs for each handset you use. Based on our calculation, for five lines for a regular small business, you can expect to spend roughly $295 per month plus taxes. However, you will have to consult with your local provider for more concrete information regarding costs.
When To Use A VoIP System
Businesses with ample internet speeds that are not prone to power outages are the perfect types of businesses that will benefit the most from a VoIP system. VoIP systems offer inexpensive international calling, integrations with outside apps, and the ability to use your phone number on any device. Unless your circumstances demand a landline, VoIP is a much better investment.
When To Use A Landline
Businesses that are in remote areas, or in areas that are known to have poor internet connections are better suited for a landline rather than a VoIP system. Since a VoIP system relies on a solid internet connection, you don’t want to take the chance of losing connection and not being able to use phones that work.
VoIP Vs. Landline: Benefits
It’s no doubt that both VoIP systems and landlines offer a core set of calling features. Some of these core features include the ability to send, receive, and route calls. However, VoIP offers more functions beyond what a landline system can do and with a lower average cost as well.
The fact that VoIP services work over the internet allows for advanced features that simply aren’t possible with a landline. The ability to access business phone system features via a mobile app as well as use your same business phone number no matter where you go is one example. International numbers, integrations, and other factors also give VoIP a large advantage over landline services.
Reliability And Call Quality
For years, VoIP systems had worse call quality than traditional landlines. However, rising internet speeds and advancements in technology have closed this gap. With that in mind, the reliability of those calls is still dependent than the strength of your internet connection, and businesses can miss calls during power outages.
Landline phones, in comparison, operate on a purpose-built network that can run even when there is a power outage. As it is not tied to the internet connection, the call quality will remain high, even when the internet has a poor connection.
VoIP services usually offer a mobile app allowing you to use your smartphone as an extension of your office phone. You can have calls forwarded to you and receive them anywhere you are, as well as make calls from your mobile device and have them appear to come from your office phone number. Most internet-based business phone systems offer mobile functionality.
As its name implies, a landline limits you to a wired office phone. Clients will not be able to reach you on your mobile device, requiring professionals who travel out of the office to maintain a separate business cell phone number. Therefore, VoIP systems are a more economical choice for teams that are out of the office frequently.
International Calling And Numbers
Many VoIP systems allow you to make international calls with ease. Some providers even allow you to purchase international call-in numbers. Outgoing international call rates vary by destination.
Landlines also offer international calling, but at a higher price. For example, international calls on Verizon’s landlines start at almost 30% higher per minute than most other providers. This makes VoIP a better option for companies with multinational operations.
VoIP systems can be integrated with third-party applications, such as CRM software. For example, your CRM can record the number and time of all incoming calls and log them into your system for later reference.
Landlines offer no such integrations. Businesses that use CRMs, cloud services, and other popular types of business apps will find that VoIP services better suit their needs because they save staff from unnecessary data entry tasks.
Landline systems are very basic compared to their VoIP counterparts. Outside of sending, receiving, and routing calls, landlines don’t offer much in the way of features. With that in mind, its reliable call quality makes it a good option for some businesses with unreliable internet.
Reliability And Call Quality
Landlines use a purpose-built network built from the ground up to transmit telephone calls. As such, it offers consistently good call quality as well as reliability. As the network runs separately from the power grid and the internet, you don’t have to worry about losing service if there is a power outage.
In most areas, VoIP call quality has caught up with call quality found on landlines. However, VoIP still requires a stable internet connection to run, meaning teams without stable connections will want to go with a traditional phone system.
Landlines do not offer the ability to make and receive calls from your work number on a mobile device. While many landline providers can bundle in mobile phones with your service package at an additional cost, those phones will have different numbers.
This is very different from today’s leading VoIP providers, which offer mobile functionality that lets you take calls on your work number anywhere you go. Therefore, landlines are a good fit for organizations that have no need for mobility.
International Calling And Numbers
International call rates vary depending on location. In the case of Verizon, rates start at 5 cents per minute but go up depending on location. Additionally, you cannot purchase an international number to hook up to your landline system.
VoIP systems offer international calling at much lower rates. In fact, when comparing rates from leading VoIP systems and Verizon, international calls on Verizon’s landlines were almost 30% more expensive than on other VoIP networks. Landlines are a better fit for organizations that do all their business domestically.
Landlines offer no software integrations, which hampers their effectiveness in the modern business world. All your CRMs, collaboration apps, and other business tools will have to run entirely separate from your phone system, requiring staff to perform significantly more manual data entry or toggle back and forth between screens.
VoIP platforms, on the other hand, connect data to all sorts of business applications. Some customers just want simplicity and reliability, though, and landline systems are a good fit for them.
VoIP Vs. Landline: Ease of Use
From initial setup to everyday use, your phone system should be easy to use and operate so that your employees can focus on important work. We looked at the overall usability of each system. Because using a landline handset is so simple, it has the edge over more complex VoIP services.
VoIP Ease of Use
Most VoIP providers offer help with the initial setup. After that, using the systems and navigating through the various features on mobile and desktop apps is usually easy enough for users of all skill levels to understand. That said, the web-based features of VoIP systems could potentially be confusing for less tech-savvy team members.
However, if you are a business that prefers a VoIP system over a traditional landline, we can help you with everything. Afterall, that is what we do!
Landline Ease of Use
Once you’ve plugged your landline connection into the wall, everyday use of your phone system mostly comprises sending, receiving, and routing calls. Businesses that do not care to use complicated web apps will likely appreciate the simplistic nature of a landline phone system.
VoIP Vs. Landline: Customer Service
No matter what type of system you choose, your phone system vendor should offer customer support channels to help you when you need something. Because customer service varies so widely among providers, it’s quite difficult to rate the customer service of one type of system over the other. Most of today’s phone services offer a customer support line that you can call and a support chat that you can speak with on the company’s website.
How We Evaluated Each System
When your organization adopts a phone system, it should let you route call traffic, handle calls, and provide people calling your business with an auto-attendant system. However, we couldn’t help but to compare extra features such as mobile functionality and integrations with business apps.
Below are some of the main factors we used to evaluate each system:
- Price: Systems should be affordable to set up and use.
- Call Management Features: The ability to route and handle calls effectively.
- Auto-attendant Features: The inclusion of a virtual receptionist to handle call traffic.
- Portability: The ability to take your business phone number with you, whether it’s on a mobile app or a desktop.
- Software Integrations: The ability for each type of system to connect with outside pieces of software.
- Ease of Use: How easy it is to use each system.
Based on these criteria, we find that most small businesses will want to go with a VoIP system. Unless you are located in a rural area and need the stability of a landline, VoIP gives you much more functionality for your money.
The Bottom Line
VoIP technology has advanced to the point where it’s no longer just an alternative to traditional landlines, it’s a complete replacement. A VoIP system can provide your business with additional features that weren’t previously available to you with a landline. A cloud-based service will also relieve your business of the responsibility of managing and maintaining your system while reducing costs.
If your business is looking into switching to a VoIP system, ITX Tech Group can help lead you in the right direction.