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VoIP Phone System

VoIP vs Landline Phone System

American businesses today face a major debate when deciding on technology. Should I get VoIP vs. a traditional landline phone system for my business, and why? Even though landlines have been helping businesses for over a century, VoIP (Voice over Internet Protocol) is introducing new technology that helps businesses stay connected. In fact, experts are now saying that landlines will start to go extinct starting in 2020!

Related: 5 Top Business VoIP Providers

So what’s the difference between a VoIP and landline phone system anyway?

Traditional landline phones use analog copper wires to transmit calls, while VoIP utilizes your Internet connection to transmit voice data. With that being said, the two are almost identical in terms of making and receiving phone calls! But because VoIP uses the Internet to operate, it is more compatible with digital tools and mobile devices. This is convenient, since workplaces are becoming increasingly digital and are starting to require more flexible, multimedia-friendly communication tools.

Startup CostLow
(Often included)
(Around $100 per user)
Ongoing CostLow
(starts around $20 monthly per user)
(starts around $100 monthly per user)
Multimedia CompatibilityVery compatible
(audio, video, image friendly)
Audio only
ScalabilityVery easy, inexpensiveDifficult, expensive
Voice QualityReliable, except when Internet goes downHigh quality, reliable
Add-on FeaturesDozens of digital optionsFew options
“Downtime” probabilityLow probability when using high-speed Internet, but can always forward calls to another deviceExtremely low, usable even in power outages
Ease of UseEasy for anyone familiar with digital devicesVery easy

We are going to break down the major differences between landline and VoIP phones. That way, you can find the best business phone system for your workplace

1. Cost

When thinking about the cost of a business phone system, there are a few things to keep in mind:

  • start up costs
  • monthly costs per user
  • ongoing maintenance costs

Across the board, VoIP phone systems are less expensive than landline phones for business. Most VoIP systems start at just $20 per month per user, which usually covers set up costs, equipment, and ongoing maintenance – depending on your provider. The great thing about using VoIP is that both types – hosted systems and cloud-based systems – are virtual (Internet-based). That means setting them up doesn’t require a provider to come in and install the analog PBX infrastructure, like a landline PBX system does. You can start using it almost immediately after signing up, as long as you already have business Internet. If you do not, make sure you factor your Internet costs into your monthly budget, as well. 

Since most businesses already have and use Internet connection – and all start-up and ongoing costs are typically bundled with monthly payments – VoIP is definitely the best option for businesses who want to save on their phone bills. Experts say businesses that use VoIP save around 60% on phone bills!

On the other hand, you are going to pay more if you go with a landline. Since each landline user is considered an independent line, the start up fee for a landline system is usually around $100 per line. Then, each line will cost you around $100 monthly, and maintenance is usually not included. If you have an IT team in-house, you may not have to worry about ongoing maintenance costs. But if you don’t, this will also add to your monthly budget. Nextiva, a leading business phone provider, estimated that a business using a traditional landline (ie. Verizon) will spend over $400 monthly per employee. That means, if that company has just 10 employees, they’re paying $4,000+ monthly. With a VoIP system, that same company would be paying only $250!

2. Reliability and Sound Quality

Since they use different sources to transmit audio data, many businesses want to know what is the main difference in sound quality between VoIP and landlines before deciding.

It makes sense that landlines are reliable in terms of voice quality, since they’ve been in use for over a century! You get what you pay for. You pay to have a separate phone line for each employee, and you don’t have to worry about experiencing inconsistent Internet connection. As a result, landlines consistently deliver good, reliable audio results.

VoIP has now caught up to landlines in terms of voice quality. With new high-performing technology like higher broadband and 5G networks, most VoIP systems have superior quality compared to landlines! Additionally, telecom companies are continuously updating and improving VoIP technology, and research shows the business world is moving in the direction of fully adapting to VoIP. It’s highly possible landlines will be considered outdated in less than 10 years time, and telecom companies may no longer invest in the tools to fix them.

However, some companies would still rather opt for a landline system over VoIP because they worry about the reliability of their Internet connection. For instance, companies located in rural areas or in locations that have spotty WiFi may want to choose a landline over VoIP to assure good reception.

3. Scalability

VoIP and landlines are very different in terms of the ease of scaling them to fit your business as it grows. Because it’s mobile-friendly and uses the Internet to run, VoIP systems can be scaled up or down very easily. All you need to do is contact your provider and add another extension to your plan. Then, the new user can connect his or her device of choice to the new line. Again, as mentioned above, the additional fee will be around $20+ per month for each new user, depending on which features you want to add. If you want to purchase additional hardware for the new line, you can do so as well – but it’s optional.

Landline systems do not allow scaling up or down quite as easily. To start a new line, a provider has to come in and install it since it runs on a physical server. Therefore, you often have to pay the start-up fee again, purchase new hardware, and have it installed. Introducing a new line can also disrupt your communications temporarily, while installation is underway.

That’s why VoIP is a great option for businesses who expect to grow and hire new employees in the near future. Additionally, if you are looking to transition to VoIP, providers are now required to help you switch over your landline number to VoIP.

4. Features

Since VoIP systems are digital and landlines are analog, they offer different kinds of perks. It’s up to you and your company to decide which types of features are more important to you than others!

One perk that landline customers enjoy is that it is a simple, tried-and-true, and trustworthy way of making phone calls. You simply plug the desktop phone into the phone jack and use your phone without worrying about connectivity problems, complicated mobile apps, etc. if you were to, say, experience a power outage, you wouldn’t have to worry about losing access to your phone line. In fact, it’s estimated that landline phones are up and working just about 100% of the time!

Here are some of the most beneficial features of landline business phones:

  • Nearly 100% “uptime”
  • Minimal maintenance
  • Secure network
  • Good voice quality
  • Call forwarding
  • Conferencing/group calls
  • Call blocking, redialing, and speed dialing
  • Voicemail 

If you’re looking for a more digital experience and a system that does more than just allow audio phone calls, VoIP is the way to go. VoIP systems allow you to customize your phone to suit your business needs. You can connect your VoIP number to your personal devices, like your smartphone or tablet, so you can access calls on-the-go. Additionally, VoIP allows dozens of multimedia features so you can adapt your business communication to the times. Plus, you can decide to either add or leave behind certain digital features, which also makes VoIP subscriptions easier to control, financially. 

Here are just some of VoIP’s key features to choose from:

  • Mobility and smartphone connectivity
  • Call forwarding, recording, and analytics
  • SMS messaging
  • Video conferencing
  • Voicemail to email transcription
  • Voicemail to SMS message transcription
  • CRM integration
  • Scalability without hidden fees 
  • Inexpensive international calls 

5. Ease of Use

If you’re looking for a simplistic system that doesn’t require knowledge of digital communication features to operate, you may want to opt for a traditional landline phone. Some businesses that still use a landline phone say they prefer it to VoIP because there’s no learning curve to using it, and they don’t have any need for VoIP’s add-on features. They simply prefer to plug the phone into the wall and stick to traditional phone calls during their workday.

VoIP does require some degree of knowledge of digital communication. However, it isn’t any more complicated than operating a smartphone or other mobile device. VoIP providers can typically train you on how to use the system and connect your phone number to your preferred devices. Also, you have the option of calling them for tech support moving forward. All in all, VoIP’s digital component is manageable for tech-savvy employees, but may present some confusion for some employees.

6. When to use a landline vs. VoIP

When it comes down to it, landlines will make sense for some businesses while VoIP will be a better fit for others.  Consider the nature of your workplace and how you communicate internally and externally on a daily basis. Also consider which digital features may help your team communicate more efficiently. 

We’re here to help you make the final decision!

You should opt for a VoIP phone system if your company…

  • Is not worried about experiencing an unstable Internet connection
  • Wants to utilize convenient software integrations and mobile features
  • May need to make international calls 
  • Is tech-savvy and don’t foresee any “learning curve” issues
  • May expand and hire new employees in the near future
  • Is on a budget and want to save money 

You should opt for a landline phone system if your company…

  • Is worried about maintaining a stable Internet connection or is located in a rural area
  • Doesn’t see the need to have mobility and portability features; you do most of your work in-office
  • Does not make international calls
  • Prefers to stick to the “basics” and doesn’t want to add tech-savvy, digital features
  • Isn’t worried about a high monthly budget or has a small team
  • Places high importance on security or deals with confidential/sensitive information during phone calls 

Looking to analyze VoIP as an option for your particular industry's needs? Learn more about VoIP for:

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