When you’re considering phone service for your business, you know there a probably a few carriers to choose from. But did you know you can also select from two distinct types of service?
Today, you can select plain old telephone service (POTS), commonly called a landline since the service is tied to the physical copper wire telephone infrastructure. You can also use the internet for your phone service. Voice over Internet Protocol, or VoIP, allows you to make calls from any digital device, and there are some distinct advantages to this service.
Today, more than 40 million businesses are using VoIP for their communications needs, and 15% growth is projected through 2025. What’s the difference between VoIP vs. a landline? When looking at a VoIP phone system vs. a traditional phone system, which is better? Let’s find out.
What is VoIP Phone Service?
Instead of using the twisted copper wire infrastructure to conduct voice calls, VoIP runs over your broadband connection. Landlines use analog signals to send voice packets over physical switch boxes between two or more phones. It’s a wired connection over land, hence the name “landline.”
VoIP is a modern technology that converts an analog signal to a digital one and sends it over the internet. You may be wondering, “Is VoIP considered a landline?” After all, there is a physical connection to the internet running into your business, isn’t there? However, VoIP is not a landline; VoIP calls are transmitted in the cloud and do not rely on the public switched telephone network (PSTN) to make the connection.
Key Differences Between VoIP vs. a Landline
There are some important differences to consider when reviewing traditional landline calling versus VoIP internet service. This includes:
- VoIP requires an internet connection to make calls. A landline uses the existing physical infrastructure and doesn’t use the internet.
- 911 calls are automatically traced to your number with a landline. This isn’t always possible with VoIP.
- Power outages typically affect VoIP service more than they do a landline.
- Upgrades to the POTS infrastructure can be physically disruptive. Phone service providers must dig up the ground and run more wiring to add services. VoIP software upgrades happen continually in the cloud and you won’t usually even notice the change.
- Long-distance calling on a landline can be expensive, as are the monthly tariffs and provider charges that makeup landline service. VoIP is at least 40% less expensive than a traditional landline.
- VoIP features are usually free, while adding caller ID, call waiting, or voicemail are typically added charges for landline service.
VoIP service supports multimedia such as video and streaming. Typically, there are not additional charges for these services; they are just included as part of your service costs. It’s also fairly simple to scale up or down with your VoIP service. If you’ve ever added analog POTS to your business, you know the hassle of waiting for a technician to come out and set up the service. VoIP is a virtual service, so a simple phone call can add or subtract the lines you need without a visit from a phone tech.
VoIP Phone System vs. a Traditional Phone System
Legacy landline systems require both the physical infrastructure with the old copper telephone lines as well as analog phones installed in your business to work.
Most companies need more than one line, so they also purchase a private branch exchange, or PBX, to route calls throughout their business. A PBX consists of hardware such as the analog phones that sit on your desk as well as the PBX server itself, which may sit in a closet and is hardwired into your business. If your PBX needs an upgrade, it is a physical process requiring the PBX service provider to come out to complete the work. The same is true for the phone service itself. These analog phone systems function as they have for decades, with voice calls only able to be completed to a location once these tools are set up.
VoIP phone systems are newer and constantly being upgraded online. VoIP does not require a physical upgrade to your business. It doesn’t require cabling or hardwiring. VoIP connects to your existing broadband connection to make calls.
If you don’t want to use your digital devices to communicate, you can purchase VoIP phones, which look like the handsets you’re probably used to with your analog service. The difference is that a VoIP phone plugs into your internet connection at the router instead of into the PSTN jack in the wall. A VoIP phone converts analog voice packets to digital and sends it through the internet as fast as your connection allows. However, you may not even want to buy physical VoIP phones, because you can easily make calls over your computer.
VoIP allows you to make and receive phone calls without any extra equipment and comes with several features that are included in this low-cost service.
The benefits of VoIP vs. traditional landline service includes:
- Greater flexibility to receive calls from any digital device.
- Lowered monthly and upfront costs.
- Better advanced business features.
- High sound quality.
- Faster installation.
- Continual upgrades in the cloud.
Many businesses consider VoIP a better choice just for the price reduction alone. This next section will review how VoIP can cut your monthly phone bill in half.
VoIP vs. Landline Costs
One of the biggest differences between comparing VoIP vs. a landline is the costs associated with these services. The setup charges on a landline can be expensive, as are the monthly fees associated with the service. With VoIP, your business likely already has a broadband connection, so the service fees associated are considerably less upfront each month.
VoIP is less expensive, in part, because the service is usually an add-on to your internet functionality. POTS has a physical infrastructure that must be maintained, so you’ll notice a variety of fees on your monthly service statement to support the system.
With a landline service you typically pay for:
- Installation fees
- PBX equipment fees
- Labor costs
- Advanced features
- System updates
- International calling
- Long-distance fees
These fees create variable overhead and monthly costs that add up to hundreds or thousands of dollars annually. VoIP costs about $20 a month for the typical service, period.
When considering a VoIP phone system vs. a traditional phone system, the choice for most companies today is clear. We are a leading provider of modern digital phone services. What are you waiting for? Get a quote today.