The type of phone system you choose will determine how much your phone system costs, how reliable it is, and how easy it is to communicate internally and with customers. We’ll explore the differences between VoIP and landline phone systems to help you decide which is right for your business.
What is a VoIP Phone System?
VoIP, or Voice over Internet Protocol, is a digital phone system that uses the internet to place calls. VoIP calls are initiated and carried over your company’s WiFi network rather than over physical phone lines.
What is a Landline Phone System?
A landline phone system, also known as an analog phone system, uses physical copper wires to carry your calls. Landline phone systems are the phones that were used in the days before cellular networks and widespread internet connectivity.
VoIP vs Landline: Equipment and Setup
One major factor in deciding whether to use VoIP or landline service for your business phone system is whether you already have phone equipment. VoIP phones won’t work with a landline phone service and analog phones won’t work with a VoIP phone service. (You can still place a call from a VoIP phone to a landline phone or vice versa, however.)
So, if your business already has a set of analog phones, it can save a significant amount of time and money to stick with a landline phone system. On the other hand, if you already have VoIP devices, it might make sense to continue with a VoIP phone service. Phone hardware is often—but not always—transferable between phone service providers, whether VoIP or landline.
One thing to keep in mind is that most VoIP services don’t actually require you to have physical desk phones. Instead, employees can place calls right from their computers or mobile devices. So, you don’t necessarily need specialized equipment for a VoIP phone system, whereas you will definitely need a set of analog phones for a landline phone system.
VoIP vs. Landline: Features and Customization
VoIP services offer significantly more features and customization options than landline services. With a landline, you’re limited to simply placing and receiving calls. You can set up basic features like speed dial, extensions, and call forwarding, but that’s about it.
With VoIP, you can do much more. For example, VoIP services allow you to set up custom rules around call forwarding so that calls are forwarded to specific employees depending on the time of day or area code of the incoming number. You can also set up ring groups, which enable multiple phones to ring whenever a specific number is dialed.
Many VoIP services also offer an auto-attendant or virtual receptionist, which offers callers a recorded menu of options and helps direct them to the correct extension. In addition, businesses can take advantage of automatic voicemail transcription, which transcribes employees’ voicemails and sends them straight to their email inboxes.
Some VoIP systems can integrate with other business platforms, including CRM software. These integrations make it possible for sales teams to dial customers with a single click or even set up an auto-dialer that contacts everyone on a list. With a landline phone service, the only option is to dial numbers manually, which takes time and can lead to errors.
Other VoIP services offer Zendesk integration so you can set up a call center within your business.
Some VoIP providers have even added features beyond calling. You will often find internal messaging and conferencing features included as well. For example, you can find built-in messaging features in RingCentral that make it simple for employees to communicate with one another. And platforms like Vonage support video conferences with up to 100 participants.
VoIP vs. Landline: Mobile Access
Another advantage of VoIP phone systems over traditional landline telephones is that employees can place and receive calls from their smartphones. All they need is internet service, which includes connectivity from 4G and 5G cellular networks.
Most VoIP phone companies offer free mobile apps that will connect employees’ mobile devices so that they ring when a call is placed to their extension. The Ooma Office mobile app also offers employees access to their VoIP number’s address book, voicemail inbox, and other calling features on the go.
With landline telephones, employees can set up call forwarding to mobile phones. However, this must be done every time they leave their desk, and they will only be able to receive calls on their smartphones, not place them.
VoIP vs. Landline: Reliability
The most significant benefit of traditional landline phones for business is that they’re reliable. Since landline phones operate over physical phone lines, call quality is consistently excellent, and it’s extremely rare for calls to drop.
With VoIP phones, sound quality is much more dependent on the quality and consistency of your internet service. In addition, calls can drop anytime your internet connection freezes.
Landline phones can also continue operating during a power outage since they run on physical wires that are separate from the electrical grid. VoIP service, on the other hand, won’t work during a power outage since your business’s WiFi network will no longer be running. This is important for ensuring that your business is always available to customers, especially if your business operates in an area with frequent storms.
There are also differences in how VoIP and landline phones can be used to contact 911. Landline phones contact 911 directly—and will work even if the power is out. VoIP phones must have Enhanced 911 (E911) enabled in order to dial emergency services.
Most VoIP providers now support E911, but not all do. You also must fill out information about your business’s address in order for 911 to determine your location. Dialing 911 will not work on a VoIP phone if you do not have an internet connection.
VoIP vs. Landline: Cost
In general, VoIP phone systems are cheaper than landline phone systems. VoIP phone systems typically cost $15-$40 per line per month, and providers like Zoom Phone offer service from as low as $10 per line per month. Landline phone systems, on the other hand, typically cost $50-$80 per line per month.
Keep in mind that landline phone systems also involve additional equipment and setup costs. You must purchase landline telephones for every line, and there are often installation costs to activate your service. If your building is not already wired for landline service, installing physical phone lines can be prohibitively expensive.
Purchasing phone hardware is optional for most VoIP phone systems and there are usually no installation costs. Because the difficulties involved with installing extra landlines are not present with VoIP, scaling your business up or down can also be less costly.
You should expect to pay extra for international calls whether you use either a VoIP or landline phone service. However, international calling rates are often much cheaper with VoIP phone systems, making this service suitable for small businesses with offices or customers in multiple countries.
Is VoIP or Landline Better for Your Business?
For the majority of small businesses, VoIP phone systems are a better choice than landline phone systems. VoIP services offer more features, more customization options, and more flexibility for business communications. You can set up custom call routing rules, integrate with other essential business software, and enable employees to place and receive calls on the go.
On top of that, VoIP phone systems are typically cheaper than landline phone systems. They don’t require specialized hardware and there are no installation fees. If you don’t want to make a large upfront investment in desktop phone hardware, employees can use their mobile phones and computers for calling.
That said, there are specific instances in which a landline phone system may make more sense. If your business already has analog phones, it may be less expensive to stick with a landline phone system than to replace all of your office’s calling equipment with VoIP-enabled devices.
In addition, if your business has spotty or slow internet service, is in a location with frequent power outages, or provides important services during weather emergencies, then you may find that VoIP phone systems provide poor call quality or inconsistent connections. Landline phone services are very reliable and don’t depend on your business’s internet connection.
VoIP and landline phone systems both enable your employees to communicate with one another and with customers. However, there are important differences in how these phone systems operate, what features they provide, and how much they cost. For most businesses, VoIP phone service offers more flexibility at a lower price.