February 27, 2024

VoIP vs Landline: The Pros & Cons for Business

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Key takeaways

  • VoIP is a form of communication that requires a strong internet connection for optimal call quality.
  • A VoIP phone system is advantageous for companies looking to provide customers with an exceptional call experience.
  • When considering VoIP vs. landline, VoIP brings a pretty clear advantage due to its flexibility, portability and cost-effectiveness.

Considering changing your business phone system from a traditional phone line to VoIP? There are several reasons this is beneficial to a business, but it’s not always going to be the go-to solution for every business. Join us as we dive into the pros and cons of VoIP vs landline systems to help you decide which option is best for your business.

What is VoIP?

Voice over internet protocol, or VoIP, is a technology that uses the internet to create phone calls. Effectively, the technology transforms voice signals into digital packets, which are then transmitted to the receiver. The process of packet transmission is so fast that conversations seem to happen in real-time as they would on a traditional landline system.

Here’s a breakdown of the VoIP process from transmission to receipt:

  • A VoIP endpoint is used to facilitate a call. An endpoint can be an IP phone, a smartphone, or a laptop or desktop computer.
  • The VoIP technology then converts the audio from the call into data packets. 
  • Using the internet, the software transmits the data to the recipient.
  • Within milliseconds, the recipient receives the data packets, which the software translates back into voice audio.

Pros of using VoIP vs landline

In the competition between VoIP and landline phone systems, VoIP has a wide array of benefits compared to the older landline technology. Here’s a breakdown of each.

VoIP features

With VoIP, it’s easier to get dedicated features that simply aren’t present with landline phones. In fact, many providers make a point to deliver business-first functionality in their various plans. As a rule, feature numbers tend to increase with the amount of money spent, but some providers have blanket features across all plans. Here are some key features of VoIP:

  • Call management: Auto attendants or interactive voice response (IVR) are almost always available with VoIP systems. These features quickly ensure that each customer is sent to the appropriate department or agent. IVR is particularly useful because it even allows for bill-pay and can be empowered with AI. Additionally, VoIP providers often make management features like call forwarding and call screening available by default.
  • Phone number availability: With most VoIP services, businesses will find four distinct types of numbers:
    • Local: This provides inroads to local jurisdictions. Customers are more likely to do business with a company that seems like it’s based locally. Local numbers are available without the need to establish branch offices in local areas.
    • Toll-free: This serves as the opposite of local numbers. Toll-free numbers make even small businesses seem more national. These also deliver a free-to-dial experience to your customers so that reaching out to businesses is easier, even when a business isn’t local.
    • Vanity: While numbers are memorable, words tend to stay in the minds of customers more easily. With vanity numbers, your business number will spell out words or phrases. A classic example is 1-800-FLOWERS. 
    • International: When looking to expand your business internationally, a number in the intended market helps immensely. These numbers cost nothing for your foreign customers to dial; it will feel like they are reaching a branch office within their own country.
  • SMS and MMS: In addition to business telephony, VoIP systems also offer the ability to text your customers. This feature is available by default with most providers, and it’s a major benefit when comparing VoIP vs Cellular.

Cost-effectiveness

When looking at VoIP and landline phone systems, VoIP is simply much cheaper. As an internet-based technology there are several advantages in this era of as-a-service solutions. Here are a few important advantages to consider from a cost-effectiveness perspective:

  • Multiple features are rolled into the plans of most providers.
  • Cheaper international communications thanks to the technology not relying on aging infrastructure.
  • Volume and annual discounts are common across VoIP providers.
  • Many features are available on an a la carte basis, meaning businesses on lower-tier plans still have feature availability without committing to more expensive plans.

Scalability

This technology is one of the most scalable communications solutions available. This is partially due to the availability of features for those that need them. Additionally, most providers have at least three plans so that businesses can select the one that best fits their size.

Reliability

Service level agreements (SLAs) are found with most VoIP providers. These provide a percentage of expected service uptime. If a customer’s service dips below this in a year, the provider is responsible for providing financial restitution. Common SLA percentages in the VoIP industry range between 99.9% uptime and 99.999%.

Additionally, some providers deliver geo-redundancy. Effectively, this means that a provider has servers positioned around the world. When a server goes down for any reason, the others pick up the slack. This helps businesses maintain communications continuity, even when natural disasters or power outages occur at the server’s location.

Mobility

VoIP is inherently mobile thanks to its ability to be used across multiple devices, which are also called VoIP endpoints. Here are a few examples of the technology’s built-in mobility:

  • VoIP is inherently multiplatform. Users are able to utilize desktop or laptop computers, smartphones or tablets, or IP desk phones. 
  • Most providers also entail easy number portability. This means that, with the help of your prior carrier, you’re able to send numbers to a new VoIP provider with a small turnaround time.
  • Find me, follow me allows users to quickly send calls to mobile devices seamlessly without dropping the call.

Cons of using VoIP

Though VoIP has several beneficial benefits for business, there are some limitations that you should be aware of. These include:

Requires a solid internet connection

As we discussed, VoIP is a type of communication that goes over the internet. Therefore, if your internet connection is lacking, your calls may be dropped or the connection could be spotty, which makes it possible to miss parts of important conversations. In addition, having a low bandwidth will affect your call quality and how clear voices come through the phone.

You will need an internet speed that is fairly high to use a VoIP service, so if you are working in an area where the internet quality is not great, it may be beneficial for your company to avoid using a voIP system. Free VoIP phone services allow you to try out VoIP without committing to a monthly subscription. 

Needs electric to operate

With VoIP, your phone system is going to need a constant draw of power to function. This is not the case with a  landline because power runs through the copper lines. There are situations where a landline will not work without electricity, but with VoIP, when the electricity goes out, so does the phone system.

Emergency calls are not location-based

If you call 911 using a VoIP phone system, the call is not going to tell the emergency service personnel that you reach where you are located. If you are having an issue that prevents you from speaking, they will not be able to find you unless you have the system set up to provide a location for E911.

Other challenges of VoIP

With VoIP being such a great option for most businesses, there are still some challenges to be aware of when switching to a VoIP phone system. Some of these challenges include: 

Security

Since VoIP is making calls across the internet, this type of phone system is susceptible to cyberattacks. There are steps that a business can take to minimize these risks. However, if your company deals with sensitive information, making sure that the right security protocols are in place from the VoIP provider you chose is imperative. For example, HIPAA (Health Insurance Portability and Accountability Act) compliance may be required if your business deals with sensitive patient information.

Phone Echoing

Sometimes calls over the internet have issues with lag. This means there is a slight delay between what is being said and what is being heard. If the delay is significant enough, you may hear an echo. This echo can be minimized, but without a high-speed connection and optimal hardware, it may still be a challenge.

VoIP software recommendations

RingCentral

RingCentral is a VoIP and unified communications (UC) provider that delivers a communications system that’s based in the cloud. This provider is known for its multiple communications channels, high 99.999% service uptime, and robust collection of over 300 integrations. RingCentral also includes a wide array of features, including interactive voice response (IVR), internet fax, call forwarding, and visual voicemail.

Vonage

Vonage is one of the first VoIP providers in the U.S., and offers a strong business VoIP option. Vonage has a robust 99.999% uptime and also has bundled minute options for making calls to more than 52 countries. Vonage is a useful option for those considering this type of international business because it also has international virtual numbers in over 80 countries.

Grasshopper

This provider serves as a virtual phone system for those just looking for calling capabilities and virtual numbers. Grasshopper stands out thanks to its solopreneur-oriented True Solo plan and its inclusion of all features in every plan tier. Grasshopper also doesn’t charge per-user pricing, which is different from most providers. Grasshopper grants every customer a dedicated phone number that can be local, toll-free, or vanity.

Still not seeing the right solution? Check out our VoIP software guide to find the tool that’s right for your business. 

What is a landline?

A landline is a traditional telephone line, which is also known as a POTS or plain old telephone service. This legacy technology uses copper wiring to transmit voice audio from the sender to the receiver. This copper wiring spans the world with even transatlantic and transpacific cables linking countries so that telephone service is always available.

Pros of using a landline

There are multiple reasons why landline telephones have been used for more than a century. Here are a few to consider:

Call quality

With the first patent being filed in 1876, the modern telephone has an infrastructure that has been in use for more than a century. As a result, the copper network is extensive and produces strong call quality. While VoIP tends to be clearer, developments in the intervening time since the invention of the phone have consistently helped improve the audio fidelity of phone calls.

Easy to locate

Landline phones are hard to lose. With a physical apparatus present on your desktop, finding your phone and making a call is simple and plain. With a VoIP or cellular phone, you can easily misplace your hardware.

Available during outages

While some phones require a wired power connection, older phones only need the copper wiring used for voice transmission to operate. This makes landline phones a good option for those needing to communicate during power outages. 

Emergency calling is location-based

With landline phones, emergency services can quickly locate users when they dial 911. This is because these phones are location-based. With VoIP and cellular service, the numbers are much more mobile, and users have to sign up for E911 to ensure that emergency services are properly available.

Cons of using a landline

While there are some considerable advantages to using landline calling, there are also numerous disadvantages, such as:

Limited add-on features

With landline phones, what you see is what you get. These are mostly just designed for calling, so the addition of IVR, call routing, call forwarding, or call queues must be added at additional cost. For example, with a VoIP service, you can incorporate contact center features like call barge and call recording with a call to the provider. With landline services, adding on these features will require the purchase of expensive hardware.

Higher cost

With a landline, you’re going to pay much more than you would with a VoIP provider. Not only will carriers charge per-minute calling rates, but dialing even within the continent will incur long-distance fees. This is because the copper infrastructure requires consistent maintenance, and carriers offset this by charging these fees. 

VoIP, on the other hand, requires only an internet connection and is far more flexible. As a result, users pay a blanket amount for all calls in the U.S. and Canada, and pay very little comparably to landlines when calling out-of-country. There are even providers with unlimited calling packages to certain countries.

Limited availability

Landlines are in fixed locations. As a result, they are only available for use where they are installed.

Comparing VoIP vs landline for business

From a calling options perspective, VoIP comes out ahead of landline. This is because landline phones are designed for a single use: calling. With VoIP, you can also send short message service (SMS) and multimedia message service (MMS) texts. This provides additional avenues in which to communicate with your customers.

Hardware Needs

Hardware is very important for landline devices. There has to be a copper wire infrastructure, phone cables, and of course, the phone itself. With VoIP, you’re not as shackled with hardware requirements. While in-house VoIP will require a PBX setup, most modern VoIP is done as a service through a hosted VoIP provider. This means that you’ll only need an endpoint and an internet connection in most cases. Very little physical infrastructure is required, so VoIP tends to be less prohibitive insofar as hardware requirements.

Setup and Maintenance

As landlines have very specific hardware requirements, this also means that a solution like this also requires more setup and maintenance. Conversely, setting up a VoIP system typically requires installing and configuring software to connect to the VoIP provider’s service. Once that’s done, you can begin calling.

Cost

Landlines tend to be more expensive because they rely on underground, overground, and undersea infrastructure. The carriers pass the price of the upkeep of these systems onto the consumer, which means that customers pay per-minute and are charged extra based on the distance of the call. In most cases, VoIP subscribers can call around North America with a single monthly subscription rate. While calling overseas sometimes costs per-minute rates, these rates are usually very inexpensive.

Businesses that benefit from a VoIP phone system

Adoption of VoIP system has grown exponentially since approximately 2010, with estimates anticipating that by 2033, the global VoIP industry will be worth some $472 billion.

VoIP is definitely agile enough to be used by most businesses. For example, VoIP services are very useful for solopreneurs and small businesses because these services grant access to virtual or direct inward dial (DID) numbers. These are business numbers accessible from any device, even personal smartphones.

Additionally, these same companies benefit from the cost-savings of VoIP for small business; charges are only per-minute when dialing internationally, so businesses making many domestic calls only pay one flat rate per user. Converting to a VoIP phone system is also drastically easier when compared to the process of adding a landline connection. So, is VoIP better than landline? For most businesses with the internet speeds to support it, yes.

Featured Partners: VoIP Software

1 RingCentral Office

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RingCentral is a business VoIP provider that offers cloud-based communications including message, video, phone, and collaboration features. It offers a number of different tools that you can buy as standalone products or as part of a unified communications platform. Some features include call screening, internet fax, call forwarding, visual voicemail, multi-level Interactive Voice Response (IVR), video conferencing, and team collaboration.

Learn more about RingCentral Office

2 Zoho Meeting

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Join meetings and webinars from anywhere you want using the VoIP service from Zoho Meeting. If you're away from work, you can still join meetings by dialling a regional number from your phone. Zoho Meeting offers more than 55 local dial-in numbers for different regions around the globe. Organization admins can also get the toll-free add-on to enable members to join meetings from phones at zero cost. Zoho Meeting also offers recording, screen sharing, and video conferencing.

Learn more about Zoho Meeting

3 Ooma

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Ooma is a business communication product that features voice over IP services, messaging via chat and SMS functions, and video conferencing. This VoIP product works over a multitude of devices for seamless access while working on-premises, remotely or on-the-go. Find out more about the features of Ooma to help you choose the right VoIP solution for your business.

Learn more about Ooma

FAQ

No, VoIP (Voice over Internet Protocol) is not a landline. It is a technology that allows voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the internet, instead of traditional public switched telephone networks (PSTN) used by landlines.

VoIP can be better than a landline depending on needs. It offers more features, flexibility, and often lower costs. VoIP uses the internet for calls, allowing for video calls, messaging, and integration with other applications. However, it relies on internet connectivity, which can be a drawback in areas with poor service. Landlines offer reliability and clarity in such situations.


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