In this guide, you'll learn the main differences of VoIP vs landline services for businesses, the costs involved, and which one will work best for you.
After the short version? VoIP is a better all round solution for businesses in 2021:
- VoIP is cheaper than landline to install
- Running costs for VoIP are lower than for landline
- VoIP is a more reliable service than landline
- In times of flexible and remote working, VoIP is the easier solution
- Landline has a slight edge on call quality, but there's little difference these days
Each has its own advantages and cost implications for a business, and landlines can be the right choice for some, even if VoIP tends to be best. Scroll on for more on why we rate VoIP above landline phones, plus all their key differences.
In this guide:
VoIP is a way of making a telephone call over the internet, rather than through a traditional landline setup. VoIP providers offer the option of selling your company the hardware to host the online system locally, using an IP-PBX. Alternatively, providers can host the entire setup in the cloud.
Either way, VoIP removes a business's reliance on physical lines, making it easy and cheaper to increase the number of phones for your expanding workforce.
The core benefits to adapting a VoIP system can be broken down into six different categories:
- Inexpensive — Experts say the typical VoIP setup for 12 employees costs around $800, compared to around $2,500 for a comparable landline system.
- Flexible — VoIP systems come with a host of features, and you'll be able to tailor your package to fit your needs and ensure you aren't overpaying for functions that you won't use.
- Disruptive technology — New features bring new methods of working that can unlock better productivity and easier workflows, improving your flow of operations in unexpected ways.
- Competive market — We've ranked the top ten VoIP providers below, and that's a large pool of vendors vying for your business.
- Contact customers from anywhere — VoIP systems let your agents place work calls from laptops and mobile devices rather than forcing them to use only their desk handset.
- Low maintenance needs — You'll need to opt for cloud hosting rather than on-premises VoIP installation for this benefit, but it further saves time and money.
It's an impressive array of benefits: The cheaper price tag is already a deal-cincher for many, but VoIP offers better functionality as well! So what's the catch?
If VoIP has any flaw in how its process works, it's due to the system's reliance on the internet. No one has a good internet connection 100% of the time, and that holds true for phone calls placed over the internet.
Modern technology has mostly smoothed out the audio quality of VoIP calls, but some issues are unavoidable:
- Reliant on good internet connection — Your ability to take and receive calls can be knocked out as the result of a power outage, something that won't affect a landline.
- Call location can't be tracked — Having an internet number that's not tied to a specific physical location might sound more private, but it can slow down emergency responders like ambulances or firefighters.
These downsides can be mitigated, depending on which features are offered by the VoIP vendor. Some VoIP providers deliver your location data to local emergency services, and any high quality VoIP service offers a funtion that will automatically re-route a call to an alternate line if the internet at your location has dropped the call.
Every service on this table of our top VoIP providers offers call re-routing. Click under each provider column to learn more and get the chance to receive a custom quote.
The typical lowest starting price. The lowest price available for your business will depend on your needs.
Relative score out of 5
BEST FOR SMALL BUSINESS
BEST FOR ENTERPRISE
$22 per user per month
$12 per user per month
Free for first year
Established businesses with lots of users
Video calling integrations
Businesses that make a lot of calls
Businesses with a variety of different VoIP demands
Businesses that make a lot of international calls
Businesses in need of an affordable solution
No contracts, keep your number and work from anywhere.
Very easy to set up and scale as necessary.
Trusted by 2.4 million worldwide customers
Unlimited Calls in U.S. & Canada
Available through a proprietary, purpose-built cloud
Option of unlimited or global extensions
Phones and hosting service integrated
Integrates with Microsoft Office, Google and others
Instant Chat Functionality
A landline phone is another term for the traditional phone system — it works through copper wires running from a local or national telecommunications company to the premises. It’s a tried and tested technology, but also an old one with very little advancement in recent years.
Given its dependence on hardware, it is also considerably more expensive than a VoIP setup. This is due to the requirement to install a private branch exchange (PBX) to serve an office environment where multiple phone lines are required, as well as upkeep and maintain the physical components of the system.
Landlines mean stability and reliability, from sound quality to the sheer length of time they've been in use. Here are the biggest benefits landlines have to offer when contrasted with VoIP.
- Excellent audio quality — Landlines convert your sound waves directly into electricity and back again, while VoIP converts the waves into packets of data, limiting the quality.
- Tried and tested technology — Landlines have remained essentially unchanged since the 19th century
- Not affected by power outages — Landlines do use a tiny amount of electricity, but it's so little that phone companies can easily keep them running on generators.
- System already familiar to employees — You won't have to update your employees on how to operate a new system, so there's no learning curve to deal with.
If you run a smaller operation that just needs to make phone calls and little else, landlines are a good fit. But they may not be a perfect one, as they also come with some downsides.
The higher upfront cost of adapting a landline is a big concern, particularly for the smaller businesses that landlines would otherwise be a better fit for.
- Installation is a must — VoIP services can skip installations, but all landlines will require physical lines, and installation will cost several thousand at the least.
- Technology is outdated — A landline can handle phone calls, but it won't come with the perks that are increasingly useful for modern businesses, from video calls to phone calls through mobile devices.
- Scaling is costly — Once your business has grown, you'll need another phone line in order to handle more simultaneous calls, and that means more installation.
In some cases, installation won't be needed, as the location's previous users may have left the landlines ready to go. Even then, though, you'll want to keep them maintained to address any deterioration over the decades.
VoIP and landlines can both support your business's phone call needs, whether for customer sales or client support. But they come with different strengths. VoIP is less expensive than a landline and offers a wider range of abilities than a landline, but landlines are more easy to keep secured than VoIP systems.
Here's the full rundown on the main differences to know, and how to deal with them.
VoIP costs are considerably cheaper than a traditional landline set up, thanks to smaller set up fees, smaller maintenance costs, lower call charges- almost every facet of your traditional landline bill can be slashed considerably with a VoIP setup.
Not only that, but as your business grows, it’s easier and more cost effective to add more VoIP lines for new staff than it ever would be for a landline system.
Our price comparison form can help you get a custom quote to see how much you'd save. There are a wide range of potential costs and charges associated with setting up any office phone system, which is why getting a quote for your business is a vital first step. Costs to consider are:
- Cost of IP-PBX central unit and network converters
- Cost of installation
- Cost of handsets, headsets and associated peripherals
- Cost of maintenance
- Cost of employee training
- Cost of additional features and service options: international call support etc.
You’ll need a PBX if you choose a traditional phone system or if you host your VoIP system on-site, as that requires an IP-PBX. The cost of this and the related hardware can vary greatly, from as little as $80 up to several thousand dollars for fully-fledged units with support for SIP trunking and advanced features.
Desk handsets, which you may choose for either a VoIP or traditional system, also vary greatly in price, from as little as $20 for basic models, to around $100 for mid-range business IP phones, to over $500 for more advanced units with video capabilities and other features. Often businesses will invest in one or two more advanced models for senior managers and the person who will be administering the phone system for things like conference calls, and buy cheaper standard models for the majority of desks.
Service providers will also often bundle preferred models of handsets with their solutions, in which case you may be able to save by purchasing or renting such equipment as part of an overall package. It’s still a good idea to be aware of the regular price of the equipment you’re looking at though, so you know if you’re getting a good deal on a bundled solution.
All costs you may or may not incur when choosing a VoIP or traditional landline phone system will depend on your existing network infrastructure and phone equipment.
Traditional landlines hold the ace when it comes to sound quality. While they may not offer the large suite of features available with VoIP, the technology has been honed over decades to ensure that voice calls are as clear as possible, rarely suffering from interference, dropped calls or poor quality.
Unlike landlines, the internet isn’t a system that was designed solely with vocal communication in mind. Instead, it was intended to carry data. The road to getting voice calls to be a viable means of connecting hasn’t always been smooth, as anyone who used VoIP in the early days will be able to attest to. The good news is that in recent years the technology has come on in leaps and bounds. The aim has always been that the caller shouldn’t even be aware that the call is taking place over VoIP, and in a vast majority of cases this is true. While there may be the occasional blip here and there, VoIP sound quality has been highly polished, and if you opt for a reliable VoIP provider, it should be indistinguishable from an actual landline.
Just remember, the quality and speed of your internet connection will have a large impact on VoIP call quality, and it is therefore essential that you have faith in your provider’s ability to deliver a robust and speedy connection.
It’s easy to be dazzled by the range and novelty value of some of the features available when first appraising your phone system options. You likely don't need every bell and whistle, but a few core features to expect include:
- Mobile device accessibility
- Automatic redirection
- Auto attendants
- Speech to email
- Video calling
These features can be attained through a landline system, but many of them require specialized equipment, compared to the VoIP system's one-stop shop.
Know which are the features that are essential or could add massive value to your business, and which are appealing but not absolutely essential. If a key feature on your wants list is not included as standard, see if the provider can add it, and there are features included that you know are of limited value to you, see if they can be removed to reduce the overall cost. Modern VoIP phone solutions have never been so flexible and customizable, so take advantage of this.
Security is also an issue when it comes to internet-based services, so VoIP faces a greater security risk than landlines. All the typical internet protocols will come in useful when ensuring your VoIP phone lines stay secured.
- Strong passwords
- Two-factor authentication
- Updated firmware on all mobile devices
- Review call logs regularly, flagging any unusual activity
- Disable international calling if your business doesn't use it
- Get a firewall for your router
Safety is a related concern. 911 responders can find landlines, but for an internet number, responders must rely on the shaky location data recorded from wireless carriers: In one study, only 187 out of 1,000 emergency call centers reported a “great deal” of confidence in this data.
Check to see if the VoIP provider you're interested in offers a guarantee that emergency services will know your location — Ooma, one of our top picks, offers a “911 Emergency Services” feature which does just that.
Traditional landlines have proven to be dependable over the years, and can continue to operate in situations such as power outages. While they are not infallible, they are notoriously stable most of the time. Modern VoIP connections are also very reliable, with some providers boasting a 99% uptime, but they don't quite match up.
VoIP’s key weakness is also its main strength – the internet. Every facet of VoIP is entirely dependent on being able to get online. If your internet goes down, so does VoIP. Ditto your power connection. This shouldn’t be a major cause for concern, but if you are looking at a VoIP network, it’s essential that you have an excellent and dependable internet provider, as this will form the backbone of the service.
If you’re interested in VoIP but worried your office internet connection might let you down, look for a provider who offers automatic rerouting to mobile devices as a backup in case of poor connection or power cuts. As mentioned earlier, all leading providers, such as 8×8 and Vonage, now offer this service.
Scalability is another apect to consider, as you'll want invest in a phone system that can grow with your business. Ensure that the system you choose can be easily upgraded to handle greater volumes of incoming and outgoing calls, without having to go through the process again of getting a whole new system.
If you opt for either a landline or an on-premises VoIP system, you'll need to factor in the cost and time required for installation. A VoIP hosted over the cloud is far more simple to set up, with just a software installation and a training session on how the features work.
In any case, you'll want to check with your prospective service providers whether training for your employees and phone system users is included, if this training is also applicable for new employees who join the business after the phone system is set up, and in what form the training comes – a video series or in-person live workshops are the most common forms.
Keeping everything running smoothly is an ongoing process, so you'll want to budget for unexpected maintenance. It can be difficult to account for all the possible costs and overheads associated with a new phone system installation, so just keep a contingency fund available if possible for those unexpected fixes and bumps in the first few months of getting the system up and running.
Landline phones are best for smaller companies with no plans to expand their employee base. A static staff count ensures no need for the extra trouble of installing additional physical lines down the road. They're also a fit for a location with no access to reliable internet, as this is the potential downside to relying on VoIP system.
VoIP phones are best for a wider range of companies: Small and medium sized businesses are best for cloud-based VoIP, due to the low upfront costs and high flexibility, while large businesses might want to consider an on-site VoIP system installation. Expanding companies will want a VoIP setup, provided they also have a solid internet connection. In most cases, you should get VoIP over landline phones.
Verdict: VoIP Beats Landlines
VoIP is an excellent and inexpensive way to grow your business and ensure that you are responding to your customers needs effectively. The benefits over a traditional landline are many, as the thousands of companies that have already made the switch to VoIP will attest.
Ready to make the modernize your business and make the move to VoIP? Our online comparison tool will get you there, generating bespoke quotes for your company.
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