Businesses in the modern age can’t function without voice services for both internal and external communications but which is the best option for your business, Landline or VoIP? Read this blog post to know more.
Do you still have POTS lines (Plain Old Telephone Service), traditional landlines, or TDM services such as PRI? If so, these technologies should quickly be replaced since many local telco carriers are working to “grandfather” the services in favor of new options.
As Voice over Internet Protocol (VoIP) systems experience massive growth and become the preferred choice for voice services, most companies have decided to cut the cord on their landlines and embrace internet-powered VoIP or SIP.
In today’s article, we’ll discuss the pros and cons of each option and help you determine which may be the best choice for your business. We’ll also offer up a couple of alternatives in case you prefer not to choose between landlines and VoIP services.
What Is a Landline?
There have been very few changes in the landline phone system (also called POTS, short for Plain Old Telephone Service) since it was first patented in 1876.
Landline or analog phone systems work by transmitting sound as electrical signals via copper wires, which are installed by local phone companies. These signals travel through the copper wires to the telephone company’s central office. Then, they’re converted back to sound and sent to the call recipient.
Typically, businesses that use landlines have a Private Branch Exchange, or PBX, that is configured with multiple phone lines to configure an internal phone network. This creates a shared phone system for all of the business’s employees.
What Is VoIP?
VoIP, or Voice over Internet Protocol, is a type of communication technology that functions using your existing internet connection. It allows users to make calls from smartphones, computers, tablets, and other internet-connected devices.
You may also hear VoIP referred to as IP telephony or internet calling.
Put simply, VoIP breaks your voice into “electronic envelopes” or digital packets that are sent to your chosen recipient over the internet.
There are multiple ways VoIP can be transmitted:
- Dedicated VoIP phones – Phones that connect directly to a computer network instead of a phone line
- Computer software (sometimes called “softphones”) – Applications like FaceTime, Skype, and Google Voice
- Traditional phones with VoIP adapters – Regular landline phones with adapters plugged directly into the router or a phone outlet in the wall
- Smartphone apps – Skype, Google Voice, etc.
- Digital Phone Systems or Unified Communications Manager (UCM) – These systems have replaced the traditional PBX’s with powerful, smart technologies offered by companies such as Cisco and Avaya. The systems typically use SIP protocols to transmit voice over internet, MPLS (or other private WAN technologies), or SD-WAN.
Not only does VoIP allow for phone calls, but it also includes numerous built-in advanced calling features. VoIP has become increasingly popular in the past several years, particularly in the United States, due to its ease of use, accessibility, and low cost.
Pros and Cons of Landlines
Landlines are the tried-and-true traditional option, and they come with plenty of upsides and downsides.
Below, we’ll dive into the advantages of using landlines for businesses.
Since landline telephone service has been around since the late 1800s, phone lines are just about everywhere. Over the past 140 years, millions of miles of copper wires have been installed. Telephone companies historically focused on reach, so you can get reliable landline telephone service from almost anywhere.
VoIP requires reliable, high-quality internet service to operate at its best. Landline telephones, however, provide consistent quality whether or not you have a dependable internet connection, and wired landlines work even without electricity. You can trust that you’ll have good call and sound quality with a landline, and you won’t often experience dropped calls, either.
Landline telephones don’t have spotty service, which is very important for businesses that need to keep lines of communication with customers and employees open. Reliable phone lines can also mean increased productivity.
Even in most cases of bad weather and natural disasters, phone lines typically remain functional. When they do go down, they’re usually fixed more quickly than the internet is, resulting in less downtime for businesses.
Another aspect of reliability is that landlines automatically share your location with emergency services, which isn’t always the case with VoIP services.
Faxing tends to be much more reliable since VoIP and SIP technologies tend to have problems mostly with incoming faxes that have been converted from TDM to T.38. Our healthcare customers experience up to 60% failure rates when using SIP for inbound faxing.
No Bandwidth Requirements
Although over 90% of the United States has access to broadband internet [Source]. The small percentage of people that don’t have access still equates to millions. VoIP generally requires 100 Kbps per line for small offices, and this may be more bandwidth than is available if that office is located in an area that doesn’t have access to broadband.
Supports Analog Equipment
Some businesses use analog devices like alarms and elevators that require a connection to a wired phone line, and landline telephones enable the use of such devices.
Let’s look at the ways that landlines aren’t as beneficial for today’s businesses.
Moving Toward Obsoletion
As with most types of technology, the world is progressively moving away from more traditional systems and making way for innovation. Mobile phones, VoIP and SIP are quickly transforming landlines into a relic of the past.
Compared to VoIP, landline telephone service is more expensive, requiring payment both for the line rental and the phone service. Businesses that have many lines will thus have larger bills.
For example, It is estimated that a typical landline system for 12 employees has an average monthly cost of $2500. Meanwhile, a comparable VoIP system costs roughly $800 monthly, which is less than one-third of the landline cost. The monthly cost for VoIP services ranges from $10 to $60 per line per month, while landlines cost $50 to $75 per line per month.
Most of the features that are included with VoIP services, such as call waiting, caller ID, and voicemail, cost extra for landlines. Not only that, but landlines are also subject to fees and taxes that don’t apply to VoIP services.
In addition, many local telephone providers are rapidly increasing the cost of these services in an effort to push businesses to newer technologies.
It’s becoming a business necessity to have the capability to make calls anytime, from anywhere you are in the world. Unfortunately, landline telephone systems don’t allow for this; you can only make calls where copper wires have been laid. In many cases, this can hold businesses back.
Pros and Cons of VoIP
As a newer solution, VoIP/SIP brings with it many promising advantages–but it also has some disadvantages to be aware of.
Before we get into the negative points, we’ll go over VoIP’s positive attributes.
Ease of Use
Although VoIP is a newer technological advancement compared to landlines, even those who are nearly tech-illiterate should be able to use it effectively.
It’s designed to be simple to use, whereas landline systems can be challenging to utilize for international calls and in situations that involve multiple extensions. In many cases, your VoIP provider will also provide technical support.
Numerous Advanced Features
Many of the features that cost extra with landline services are included with VoIP. Although not every VoIP provider will include every feature listed, here are several of the most common functionalities:
- Virtual assistant/receptionist – A virtual receptionist essentially automates the role of a human receptionist by answering and directing calls, delivering recorded messages, and more. Virtual receptionists can improve your business’s productivity by resolving issues through an automated system without an employee ever having to spend time on the phone.
- Three-digit dialing – With three-digit dialing, it’s possible to program important numbers with unique three-digit codes, making them simple to remember and quick to access.
- Automatic call forwarding – This feature redirects VoIP line calls to another line of your choice. For instance, you could forward your office calls to your cell phone.
- Multimedia messages – Send videos, images, and documents while you’re on a call.
- Video calls/conferences – Along with traditional voice calls, VoIP makes it easy to do video calls and conferences.
- Voicemail to email – Voicemails can be sent as audio files to your email.
- Call recording – Record and store phone calls in the cloud so that you can retrieve and listen to them in the future.
- Call queuing – Put multiple customers on hold until an employee is ready to take their calls.
- Voicemail-to-text transcription – This feature enables you to read your voicemails rather than listen to them.
- Call analytics – Analyze your incoming and outgoing phone calls.
- Anonymous call rejection – Screen out callers who have blocked their caller ID information.
- Virtual phone number – Get a number that isn’t tied to a specific device and can be forwarded to other numbers of your choice.
Not all VoIP providers will include all of these features, so it’s important to compare your options and evaluate which will provide the best value for your business.
Technology Procurement Group’s procurement specialists can help you determine which VoIP provider offers the most helpful features at the best price. To learn more about our services, give us a call at 1-888-449-1580, email us at info@TPG-llc.com, or complete the short form at the bottom of the page.
VoIP gives you the opportunity to customize your business’s experience by configuring your phone service in the way that’s most effective for you.
For example, you can decide when you’d like your calls to be forwarded and where you’d like them forwarded to. You can also have staff members customize their voicemails and set up various voice messages for different devices and dates.
There are many other situations in which customization is possible as well.
One of VoIP’s biggest advantages is that it costs far less than traditional landline phone services. Since the calls go through the internet rather than phone lines, you’ll be charged less or alternatively, depending upon your chosen carriers, you may be able to purchase an unlimited toll package.
Traditional phone systems can become quite expensive when multiple phone lines are involved (as they often are for businesses), and additional features only add to the total cost. VoIP is a fantastic choice for small businesses with reliable internet connections because it gives them access to handy telecom features at a much lower price point.
Making long-distance and international calls with VoIP is much cheaper than making them with a landline as well. Statistics say that small businesses that switch to VoIP can save up to 90% on international calls and up to 40% on local calls [Source- Tech.Co].
Finally, governments generally charge less taxes on VoIP services because they function over the internet. In comparison, landline phone services tend to be heavily taxed.
Clear and Consistent Sound Quality
In many cases, the sound is clearer with VoIP than with copper based landlines. However, this depends on the quality of your internet connection and available bandwidth. If it is strong, then you can anticipate clear and consistent sound quality on your calls. This is thanks to cloud phone systems leveraging wideband audio codecs to improve sound quality.
Unlike traditional landlines, you can connect from anywhere, anytime with VoIP. Many professionals need to be reachable no matter the time or location, and with automatically forwarded calls, VoIP enables this capability.
As long as you’re connected to the internet, you can make calls with VoIP. This means whether you’re in the office, at home, or anywhere else, you’ll be able to work. Therefore, your business becomes much more flexible with VoIP services; employees can work from any location and from the device of their choice.
Compatible with the Latest Technology
The latest computer accessories, headsets, smartphones, and more are all compatible with VoIP because it runs through digital lines. It’s simple to integrate your VoIP services with technology upgrades as your business evolves.
Broadband internet connections are extremely fast, and thus, VoIP services are highly efficient at transmitting data without interruptions. Furthermore, with the advancement of 5G internet over broadband, VoIP services are more accessible.
On the other hand, the copper wires that support landlines are really only capable of transmitting voice since using them for data would be pure torture!
VoIP provides mobility and flexibility, which contribute to reliability. In addition, VoIP services rely on proven internet technologies that can be trusted to deliver data reliably. Even in the case of a power outage or the internet going down, being able to forward your calls to employees’ cell phones or to an alternative location means your business won’t suffer the negative impacts of downtime.
Quick and Easy Installation
Depending upon the complexity of your system and quantity of employees, it may be possible to install and deploy a VoIP system in just a few hours, and employees can start using VoIP services right away.
Another benefit of VoIP is that it’s easy to scale up and down as needed, especially in comparison to scaling landline services. Adding more VoIP phone lines is quick and easy, but with landlines, you need to install physical telephone lines, which takes much more time, effort, and money.
If your business reduces its number of employees, it’s simple to decrease the number of VoIP phone lines you have as well.
Plus, VoIP systems are designed for easy upgrades and don’t require the replacement of the entire system.
The implementation of a VoIP system can increase productivity in multiple ways. The report from Cisco Unified Communications revealed that companies with VoIP systems save five or more hours each week on technical support for telephone service applications.
It also noted productivity-related benefits, such as:
- Easier adds, moves, and changes
- Improved mobile employee, remote-office employee, and headquarters employee productivity
- Less employee back-and-forth by phone
- Daily time savings of 30 to 55 minutes each day per employee
According to McKinsey, call centers can reduce their average handle time by as much as 40% by employing VoIP call analytics, resulting in enhanced productivity overall.
With VoIP’s benefits come certain trade-offs, which are covered below.
Needs Electricity to Function
In contrast to a wired landline, VoIP hardware requires electricity to function. If the power goes out, you’ll need to have forwarded your VoIP calls to go to another location or to your employees’ cell phones so that the business isn’t negatively impacted.
Voice Disaster Recovery Options: Some businesses that need to ensure no voice downtime can deploy a network design with two SIP/VoIP providers. There are some complexities to this solution, so please contact us for more information at 1-888-449-1580, or email us at info@TPG-llc.com.
Requires a Strong Internet Connection
VoIP services are 100% dependent on the internet or private WAN, so it’s vital to have a strong and reliable connection in order to have good audio quality and avoid dropped calls. Still, you can set up your VoIP calls to forward to an alternative site or cell phones if and when the internet goes down.
Not Guaranteed to Support Emergency Calls
One of the biggest drawbacks of VoIP systems is that they might have issues with emergency calls. VoIP’s flexibility means that it is not tied to one location like a landline is, so you’ll need to make sure your business has Enhanced 911 enabled and that when an employee moves to a new site or home office that their address is updated. This sets up a physical address that will be shown when dialing 911.
Not Compatible with Older Technology
Although VoIP is highly compatible with new technology, the same can’t be said for more old-fashioned pieces of phone equipment. If your business still uses older phone models and fax machines, you might run into some challenges when switching to VoIP.
Potential Jitter and Latency
Incorrect settings or a poor internet connection can lead to decreased call quality, lag, and jitter during calls. The majority of the time, the voice data travels smoothly, but slow internet speeds or a lack of bandwidth can break up a call.
As with any device connected to your network, there’s a risk of cybersecurity threats like malware, ransomware, and viruses. It’s crucial to ensure your business has plenty of security measures in place to secure your VoIP technology.
Is a Landline or VoIP/SIP Better for Your Business?
The choice between landline and VoIP services is ultimately up to you, but the information below can help clarify your decision.
Consider these factors if you currently have a landline system and are considering making the switch to VoIP or SIP services.
Your Internet Reliability
Firstly, how reliable is your internet connection? If you’re interested in a VoIP or SIP system, you’ll need an excellent connection (or two) with plenty of bandwidth. But if your business doesn’t have access to broadband internet, a landline is likely the best option.
Your Business’s Future
Next, think about your business’s short-term and long-term goals and overall roadmap for the future. If your company is growing quickly, or if you’re not sure what kind of voice service needs you’ll have in the future, VoIP likely makes more sense because it’s easy to maintain and upgrade.
Landline phone systems, on the other hand, can be hard to upgrade and scale. However, if your business isn’t anticipated to experience the type of growth that would necessitate an upgrade, sticking with a landline could be the right choice.
Your Security Measures
Remember that switching to VoIP means relying on your internet connection to send and receive voice data. If your connection isn’t well-protected by various security measures, it’s important to consider investing in additional systems to protect your data.
Your Costs and Budget
What do you pay for your business’s current system, and what would you pay with a new system? What features do you want to have, and would they be included or add new costs to your budget? VoIP systems tend to be cheaper than landlines and often come with many features that are considered add-ons to traditional landline systems.
When You Should Stick With a Landline
It’s usually wise to keep your landline if your company:
- Doesn’t have access to reliable high-speed broadband internet
- Experiences frequent power outages
- Is a large corporation with a sizable budget and IT staff
- Must continue using specific legacy equipment
- Prefers to stick with a time-tested solution that has proven itself highly reliable
When You Should Switch to VoIP
Installing a new VoIP system may be the best choice if your business:
- Is small to mid-sized and looking for an affordable yet feature-rich option for voice services. Large businesses will benefit from SIP systems.
- Has remote employees that require access to the phone system
- Has access to reliable high-speed internet services
- Prefers a system that is easy to set up, maintain, and upgrade as needed
- Foresees growth that will require more phone lines in the future
- Has cybersecurity measures in place (or is willing to put them in place)
Alternatives: SIP Trunk Services and Hybrid Systems
What if your business has a landline system, but wants to reap the benefits of VoIP? If you don’t want to choose one option or the other, consider SIP trunking services.
SIP (Session Initiation Protocol) trunking services allow you to make connections over the internet while also using your legacy landline hardware. Your PBX hardware is connected directly to the cloud, giving you access to cloud-exclusive features like call screening, call tracking, and quality metrics.
You’ll also get to enjoy improved call quality, better scalability, and lower operating costs.
On the flip side, a few potential downsides to SIP trunking include a higher initial installation cost, reliance on your internet connection to make and receive calls, and unique maintenance requirements.
Another alternative is to install a hybrid system, meaning that you have both landlines and VoIP services. This increases redundancy, so if your internet goes down or the power goes out, you’ll still be able to make and receive calls.
You can use landlines for local calls and VoIP for long-distance calls in order to maximize savings, and if your business grows, it’s possible to scale with it by adding more lines to the VoIP system.
TPG Can Help You Choose the Best Provider
Comparing VoIP or SIP trunking service providers on top of your normal business responsibilities can be time-consuming and draining, and sometimes, it’s better to leave it to procurement specialists.
While we analyze your options to determine which providers can best fulfill your company’s needs and save you money, you can focus on your other business tasks.
Not only does TPG offer telecom procurement strategy consulting and IT procurement services, but we also provide telecom and wireless expense management, RFP management, wireless expense reduction, and telecom contract negotiation.