VoIP vs. Landlines: Which is Better for Small Businesses?

When you’re running a small business, you have to carefully pick the channels you use to promote your services, and communicate with your team and customers.

The choices abound: Your own website vs. business listings. Facebook vs. Instagram. And, crucially in terms of communication, VoIP vs. landlines.

Telephony remains the single most popular channel for customers to contact businesses, especially local ones, with 60% listing it as their first preference. Similarly, voice and video calls have been an invaluable lifeline for countless teams during the pandemic.

Voice over Internet Protocol (VoIP) has allowed telephony to transition to the virtual space. Most business phone services are now cloud-based.

However, as a small business you might be wondering if it’s worth making the transition from your regular landline. Why exchange a time-tested, reliable system for a virtual one?

To answer these questions, here’s an in-depth comparison of VoIP telephony and landlines – and which is the better option for small businesses phone systems.


When it comes to monthly expenses, VoIP generally has significant economic advantages over landlines. It can help your business save considerable amounts of money.

For one thing, call rates are usually much lower, for both international and domestic calls. In many VoIP plans, a certain volume of domestic calls is actually included for free.

In addition, most VoIP systems are cheaper to set up and maintain than a system of landlines, especially one with multiple extensions.

Maintaining a single business number with several extensions requires a private branch exchange, or PBX. Not only does landline PBX hardware take up valuable office space, it is also quite expensive, and usually takes a technician to maintain.

VoIP systems, on the other hand, require only a good internet connection, which businesses usually need anyway. Also, while VoIP supports desk phones, you can also access your business number through softphone apps for PCs, tablets, and regular smartphones.

Finally, VoIP providers typically include features such as voicemail and caller IDs by default, which are often costly extras with landlines.

According to recent statistics, small businesses can save as much as 40% of overall telephony costs by switching to VoIP – and up to 90% on international calls.

Flexibility and scalability

The pandemic has highlighted one of the biggest advantages that VoIP has over traditional landlines: flexibility.

As mentioned above, VoIP services work via the cloud and can be accessed via softphone apps – from anywhere, at any time. It doesn’t matter whether you’re at your office desk or your living room couch during lockdown. VoIP can easily adapt to the realities of partly or fully distributed teams.

In addition, you can handle the entire VoIP setup for your business through an admin web portal, which makes it uniquely scalable. While adding a landline extension for a new hire can take several hours and an office technician, VoIP reduces the process to a few clicks. The same goes for routing calls between extensions – for example if team members are ill, on holiday, or on maternity leave.

Features, service bundling, and integration

As already briefly outlined above, VoIP systems typically include features that are expensive add-ons for landlines. However, they also come with countless additional productivity-boosting features that no landline can hope to offer.

Most modern VoIP platforms bundle a variety of communication channels: voice and video calling and conferencing, messaging, virtual fax, email, and even live chat. This allows you to centralize all your business communication in one place, further cutting costs.

In addition, many VoIP providers offer functionalities like call recording and call transcription based on natural language processing.

Plus, since VoIP is already cloud-based, it’s simple to integrate with countless other business platforms, from help desk systems to customer relationship management (CRM) suites.

Internet-independence: The landline advantage

VoIP has numerous advantages over landlines. However, there is one point in which the traditional phone system comes out on top: Landlines, quite simply, don’t need the internet to work.

If you operate in a remote region, or an area with shaky internet service, then landlines remain the more reliable choice. In general, your internet connection must be able to constantly maintain a minimum upload speed of about 500 kbps to make reliable, HD VoIP calling possible.

All in all, making the transition to VoIP offers an overwhelming number of advantages for small businesses in today’s world of fast-paced, flexibility-demanding communication. Provided a solid internet connection, VoIP can help your business to cut back on costs, become more scalable, and benefit from countless productivity features.

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