VoIP or Landline: which one should it be for your business?

If your business uses telephony extensively, you have to choose between VoIP and landlines. Which one is the ideal choice for a business phone service?

Does your business use the same technology and provide the same functionalities today as it did twenty years ago?

Chances are, the answer is no. Fax is almost completely consigned to history, letter volumes have fallen, and more and more interactions are moving online. It’s likely you’re embracing video conferencing in a big way, driven in no small part by the COVID-19 pandemic and the remote working revolution that has followed. And what of the VoIP vs landline debate?

Beyond the bright lights of video technology, business communications have been changing in other, less obvious ways too.

Take your phone system. It’s been the workhorse of the modern office for decades. And that’s not about to change, but today’s phone companies have transformed what was once a fairly basic piece of hardware with surprisingly complex maintenance demands into something more. The humble desk phone has become a multi-functional and advanced system capable of delivering significant enhancements to business operations.

In this blog post, we’re going to take a close look at VoIP vs landline phone systems, providing a clear and detailed comparison of the two, so you can make the right choice for your business.

What is VoIP?

Let’s start with the basics. VoIP stands for Voice over Internet Protocol. It is a network transmission technology that essentially allows users to place phone calls over the internet with the help of VoIP providers.

In reality, the term refers to a telephone service that converts and transmits audio almost instantaneously. When it was first introduced towards the end of the twentieth century it was a fairly basic service with voice calls, held back by the slow speeds available from dial-up internet connections.

Thanks to the drastic increase in internet speeds and massive penetration to deeper parts of the world, these days VoIP is far more accessible and available to use for all, bidding goodbyes to the landline services.

Furthermore, additional technologies and codecs have been developed over the years to enhance VoIP’s function and performance. Combined with the speeds made possible by Broadband internet connections, these allow modern systems to handle vast call volumes, along with advanced functionalities and integrations.

VoIP has the solution to the world’s enormously growing landline phone systems.

VoIP Vs Landline: How is VoIP different from a traditional landline phone?

Functionally, VoIP calls work in exactly the same way as those on a landline. You dial a contact number and hold a conversation using a handset, headset, or conferencing system. Simple.

But as soon as you dig a little deeper, it’s evident that the system marks a step-change from traditional landline phones. From the underpinning technology to advanced functionality, these systems are now the go-to for business communications.

Functionally, VoIP calls work in exactly the same way as those on landline service. You dial a contact number and hold a conversation using a handset, headset, or conferencing system. Simple.

But as soon as you dig a little deeper, it’s evident that the system marks a step-change from traditional landline phones. From the underpinning technology to advanced functionality, these systems are now the go-to for business communications.

Architecture implemented

The main distinction between the systems is in their architecture. For a traditional ‘on-premise landline setup or a PSTN line as it is technologically referred to, your business would have a Private Branch Exchange (PBX) installed, to allow phone lines to connect to the national network.

This meant the installation of hundreds of yards of copper wires, network carrier connections, and central server systems. In essence, a miniature wired phone system built from scratch at a fixed location.

Adding new extensions

When a small business expands and they will need additional phone lines, which need to be installed manually, with contact databases programmed directly into each and every handset. Predictably, this had a financial implication and also severe operational challenges. This process was also difficult since a single error in connecting the lines could cause the entire network to malfunction.

Devices used

In a VoIP phone system, all that’s required locally is internet access and some kind of access point. Typically that takes the form of a computer or mobile device, which most modern small businesses already own and operate. In turn, handsets, headsets, and conferencing speaker systems can be easily upgraded or replaced with VoIP-compatible models.

Upgrades and maintenance

For cloud-hosted services, minimal setup is required to get your phones online, and any necessary upgrades or fixes are dealt with remotely by the service provider. That makes for a near-seamless transition to an easy-to-use system that requires very little maintenance at the local level.

Table of differences between VoIP & Landlines

Landline (PSTN)VoIP (Voice Over Internet Protocol)
Analog cablesData connectivity over WiFi, broadband, or fiber networks
Requires PBX boxes and additional hardware to workWorks with any existing telephony gadgets including smartphones, laptops, tablet devices, etc.
Requires extensive manual work for upgrades and call flow modificationsEasy and effortless over-the-air upgrades and call flow modifications
Easily impacted due to natural calamities, power fluctuations, cable damage, etc. Impacted only when there is no data connectivity

How can VoIP help improve your business communication?

When considering the relative benefits of VoIP vs landline for business, it’s important to think about the ways a new system will improve upon your existing setup, but also the additional benefits like long-distance calls, scalability, call recording, conferencing, etc, you might gain. There are many ways that internet telephony improves businesses’ communications, from enhanced affordability and flexibility to a wide range of advanced features that landlines simply cannot accommodate.

It is affordable

First to the all-important bottom line: many businesses find that VoIP calls save them significant expenditure on their phone bills.

Traditional landline phone infrastructure requires a large initial investment to purchase and install the PBX, requiring extended site visits from engineers and technicians. The additional costs are also typically high, with problems or upgrades requiring manual, on-site intervention, and for larger organizations a permanent member of staff responsible for maintaining uptime.

Internet telephony systems on the other hand merely require an existing data connection – mobile internet or wifi, with software downloaded and installed over the internet.

Unsurprisingly, running costs are typically lower, and with less to go wrong and redundancy built into server architecture, the risk of a surprise expense is also greatly reduced.

It is flexible

VoIP systems are far more flexible than landline phones, with access available anywhere you might find internet service.

It also creates huge flexibility for businesses to operate remotely and whilst on the road. No longer do traveling employees need to call into the office to access phone systems. Instead, calls, contact lists, and voicemail systems can be accessed from anywhere, via computer or mobile device. By unifying these systems, customers can be offered a more seamless service experience, with calls forwarded automatically to the most appropriate employee.

It is scalable

Expanding VoIP services is incredibly simple without compromising on your existing phone system’s sound quality. New extensions are added to shared contact lists at the click of a button, taking advantage of the formidable bandwidth offered by broadband data connections. Plus, with most providers offering a subscription model, you can be sure you’ll only pay for the user and call volume capacity with the optimum call quality that small businesses require, hence making the pricing affordable.

It is reliable and secure

The danger with a fixed landline telephone system aka desk phone is that it only takes one point of failure to pull your entire phone system offline. If there’s a problem in your local PBX your communications and connectivity will be completely down until an engineer is able to reach you and address the power outage issue.

An internet-based system does not suffer from the same vulnerability, with extensive redundancy built-in by the server host. Any problems and faults are therefore fixed without your phones going offline, allowing your business to continue to operate as normal. Whilst wider internet or power outages are not entirely unheard of, these days they are largely a thing of the past, ensuring a more reliable and secure service.

Customizable call distribution also takes care of directing incoming traffic, so employees no longer need to give out personal mobile phone numbers to be able to access your customers.

It offers advanced telephony features

VoIP technology has much to offer businesses by way of new features unheard of just a few years ago.

  • Advanced computer integrations allow your phone network to interact with other CRM programs, increasing efficiencies. Integrations can even extend to omnichannel support, virtual receptionist, bringing together the likes of email, social media, and instant chat, and allowing you to reach customers and enhance connectivity in a growing number of ways.
  • Virtual phone numbers offer contact points to place international calls all over the globe, without the need for a physical office.
  • Voicemail to email router services allows employees to catch up on messages with ease, thanks to automated transcription and detailed logging.
  • Complex scheduling can be customized, so employees can easily see who’s online and exercise the call forwarding feature.

Importantly these features that VoIP offers can be added or removed from subscription packages, and regular updates are simply installed remotely in the software. That means your phone system can flex to your business’s requirements, rather than the other way around.

VoIP Vs Landline — which should be your choice?

There’s no one size fits all answer that applies to every business situation. But it’s clear that in the VoIP vs landline question, the former provides a serious improvement in affordability and flexibility, as well as a range of advanced features that desk phone systems cannot offer. So when you come to choose which is best for your business, it’s worth giving VoIP phone service more than a second look.

Illustrations by Mahalakshmi Anantharaman

Animation by Yuvaraj Linganathan

About Freshcaller

Freshcaller is a modern-day cloud phone system that can be used to set up a SaaS call center for customer support and sales. With its cloud-based architecture, Freshcaller brings together the best of legacy features like IVR, call waiting, VoIP solutions and advanced call routing capabilities like Smart Escalations, Customizable Performance Reporting to help you set up state-of-the-art call center operations. Freshcaller offers phone numbers in 90+ countries, requires zero phone hardware, and is extremely easy to use.

Visit the Freshcaller website for more information.