Understanding VoIP advantages and disadvantages compared to a landline can help you save a lot of money on phone systems. This article explains benefits along with the most popular VoIP features to increase your business productivity.
VoIP is short for Voice over Internet Protocol and makes it possible for people to make phone calls through the Internet. It’s one of the main reasons there are so many providers of phone services who offer free domestic long distance service.
Small business owners may wonder what the differences of VoIP vs. landline are, as well as the VoIP advantages and disadvantages. Understanding VoIP features can help you increase the productivity of your business.
How VoIP Works
Any service that allows you to place calls through your computer network is VoIP. By 2020, the global market for VoIP is expected to be worth more than $135 billion with an estimated 350 million paid subscribers across the world. These statistics reaffirm VoIP’s place amongst the fastest growing industries in the world.
In the past, a large portion of VoIP growth was driven by popular consumer software such as Skype and FaceTime Audio. More recently, small businesses have become the biggest adopters of VoIP, with products like Ring Central becoming increasingly commonplace in the enterprise.
Of course, small business owners might find it hard to see why they should switch their communications from landline to VoIP. In order to understand the advantages of VoIP, it is helpful to examine how the technology actually works.
VoIP vs. Landline
Many businesses are moving away from traditional landlines to VoIP because of the significant cost savings and flexibility to add remote workers. Traditional telephone systems run on PSTN or public switched telephone networks.
When you make a voice call on your landline phone, the analog audio signals are transmitted across copper wires to the designated receiver. These signals pass through a series of centralized switchboxes which transfer the signals on to different regional, national or international networks to establish the connection. The completed circuit is then dedicated solely to your conversation. For the duration of the call you are effectively renting the amount of copper wire used to create this circuit.
VoIP converts audio into packets of digital data. These are transmitted in real-time over Internet networks in much the same way as emails or IM messages. Since each packet is sent independently, you don’t need dedicated circuits to send or receive signals. All data packets are reassembled upon arrival in the correct order, and then converted into audio on the receiver’s device.
How to Make a VoIP Call
There are three ways to place a VoIP call:
- You can use an analog telephone adapter to connect your phone to a computer or Internet port. The ATA will automatically convert your audio output into Internet-ready data.
- IP phones are purpose-built VoIP devices that connect directly into your router through an Ethernet cable. Wi-Fi enabled IP phones allow subscribers to place calls on any wireless Internet network.
- Computer-to-computer calling is the simplest and cheapest method of setting up VoIP. All you need is VoIP software, a microphone, a speaker, and a (preferably high speed) Internet connection. Now you can place unlimited calls to any location for just the price of your monthly Internet subscription.
VoIP Advantages and Disadvantages
There are several pros and cons of VoIP for small business. If you are starting a small business, get a system that will grow with your business. Here are some of the advantages of VoIP vs. landline.
Advantages of VoIP
Lower Cost with VoIP
On a traditional landline phone users are charged a specific rate for every minute they spend on call (a higher rate is generally charged for international calls). So the more time you spend on the phones to more charges you incur. If you dedicate a large portion of your business to sales and customer service then these costs can quickly add up, especially if you are selling your products and services to overseas markets.
VoIP comes with none of these limitations. A hosted phone system, or cloud based phone, enables you to connect directly with clients, partners and customers in any location without any added expense. For consumers using computer-to-computer or computer-to-mobile software like Skype, these services are essentially free.
While you may have pay additional installation fees and a monthly subscription for business VoIP services, the combined cost will usually come out to a lot less than a similarly employed landline phone. Most of these services offer affordable packages covering unlimited calls to any device. Since a hosted phone system provider will typically offer 24/7 support, you won’t need to add IT support expenses to your budget.
Convenient VoIP Set Up
VoIP systems utilize existing Internet networks, so you won’t need to install additional infrastructure to begin using these services. In fact, most VoIP for small business services allow configuration and updates directly from your computer. While Landline users can only add a certain number of phones to their internal phone networks, VoIP allows you to add as many additional users as your bandwidth can take. If you have an enterprise-class subscription then you could potentially host hundreds of users on a single Internet connection.
VoIP is not dependent on your physical landline. As long as a user has the right credentials, they can access your VoIP account to send and receive calls from any location. In an increasingly global operating environment where a number of employees work from offshore sites, this capability allows organizations to bring together their entire workforce on the same communication channels.
VoIP services are also not restricted to any particular device. You can use them on your mobile phone, tablet, or computer with equal ease. The features will be particularly important as mobility and portability become more commonplace across the enterprise.
Disadvantages of VoIP
Alongside these myriad benefits, there are a few disadvantages to VoIP systems.
Unlike landline phones, VoIP services require a constant power source and Internet connection. If either of these key services fails then so will your communication network. This might make VoIP unsuitable in areas where critical services are constantly disrupted due to poor infrastructure or poor weather conditions.
Without a high-speed Internet connection VoIP calls can often suffer from latency issues. This can result in lagging, poor call quality and constant dropped calls. However, as network infrastructure improves across the globe this issue has become far less prevalent.
VoIP Features List
As a small business, select a business grade VoIP service that can grow with you. Otherwise, you may have to reinvest in a new cloud based phone system.
Business grade VoIP typically adds popular VoIP features like:
- Extensions for each person, even remote workers.
- Call logs which track the duration, source and destination of each call.
- On hold music. Instead of leaving customer listening to dead air while you put the call on hold, you can set up call waiting music to make their wait a little easier.
- Call recording tools.
- Caller ID. See who is calling right on your display, or computer, before you pick up the phone.
- Call routing.
- Virtual phone numbers. You can set up a virtual phone number that is not linked to your current location. This can help foreign customers feel more comfortable receiving calls from your business.
- Voicemail transcriptions with email integration. Many VoIP services allows users to receive a transcription of voicemails via email. When you’re unable to listen to audio voicemails, this feature makes it easy to check your messages just by reading your email.
- Conference calling. VoIP services allow convenient conference calling between multiple users, ideal for remote business meetings.
- Instant call back options. Prospects can enter a phone number on a web form and instantly get a call back to connect to your team in seconds.
- CRM integrations. Advanced features in VoIP for small business can link directly to a customer relationship management system. This allows users to offer more personalized support to all existing customers.
- Multimedia communications. VoIP isn’t just for voice. You can send or receive digital data in a variety of media formats, including video.
When choosing a phone service it is important to pay attention to the pricing, security, and added VoIP features. Although a consumer-grade software such as Skype may be cheaper to set up, it will not offer anywhere near the same capabilities as a reputable enterprise software like Ring Central.
Recently, we tested RingCentral’s hosted phone services to see how they measured up. It offers many VoIP features and can expand with your business. In a hosted phone service, all the settings and configurations that control the operation of your VoIP system are located offsite in your provider’s cloud server.
In RingCentral’s case, their infrastructure is capable of supporting networks from all over the world with ease. Also, RingCentral owns 17 dedicated data centers across the globe that are staffed 24/7. The service advertises up to 99.99% uptime for clients.
Ring Central Pricing
RingCentral offers four different VoIP for small business options. All plans include:
- Unlimited calls in USA and Canada
- Mobile app access through Android and iOS
- Unlimited business SMS
- Desktop and mobile messaging options
- HD voice and video calling
- Variety of voicemail features
If you opt for the Essential Plan at $29.99 a month you will get 100 toll-free minutes and video conferencing capabilities for up to four users.
This plan is allows for up to 10 separate users on the same subscription. Additional plans come in at $34.99, $44.99 and $59.99, respectively. Each one offers additional features such as:
- Call logging
- Voicemail transcriptions
- CRM integrations
- Multi-level call attending
While the business and Premium plan allow you to host up to 99 users on your subscription, the Ultimate plan allows up to 250.
RingCentral’s advanced VoIP features offered at even the most basic package makes it a better bet for VoIP for small business than other solutions. Scalability is important as your company grows. RingCentral allows you to upgrade to features like CRM integration and multi-level call attending when you’re ready. Use our affiliate link below to try it free:
RingCentral’s support team will work with you to configure your connections for optimal call quality.