VoIP vs Landline? Which Works Best for Your Business

Phone technology continues to evolve and businesses now can take advantage of more flexible and affordable voice-over-internet-protocol (VoIP) services instead of relying on traditional copper lines. However, landline systems are a more reliable option in some areas. We’ll discuss the benefits of VoIP vs landline services to help you determine which one is the best fit for your needs, priorities, and budget.

We compared these two systems based on voice quality and various features to find the top advantages of using one over the other. Here’s how they stack up:

• VoIP: Best for small to mid-sized businesses (SMBs) wanting a low-cost, feature-rich alternative to landline services
• Landline: Best for companies lacking access to reliable high-speed internet services or facing frequent power outages

VoIP vs Landline at a Glance

VoIP vs Landline for Business: Considerations to Compare

Most customers want to reach your company by phone, and Microsoft finds that 58% will stop doing business with a brand due to poor customer service. The best business phone systems enhance communication and support your customer experience objectives. In most cases, VoIP provides more features and flexibility at a lower cost than landlines.

However, the public switched telephone network (PSTN) is reliable for locations without high-speed internet access. Choose the best option for your business by considering how your team will use the phone system compared to your budget and must-have features.

Best for Cost-effectiveness: VoIP

Is VoIP cheaper than a landline? Based on our comparison, it is. VoIP services work nationally, whereas telecom carriers vary by region. VoIP is competitively priced, and there are options for nearly any budget. Some areas of the U.S. only have one or two landline companies to choose from, and it’s tough even to find mentions of business landlines on telecom websites.

Your initial investment is minimal with VoIP, as you can use existing devices like cell phones and computers to make and receive calls. Since VoIP is cloud-hosted, you won’t pay installation and setup fees for on-site infrastructure. Plus, it only takes a few minutes to install a VoIP system.

Many telecom carriers charge an installation fee per phone line, and your office may require new wiring and phone jacks. Landlines only work with analog devices, so you’ll need to purchase and configure office phones. If you want more than a couple of phone lines, your initial costs will increase substantially. Higher line capacity requires an on-premise public branch exchange (PBX) system.

Also, consider your ongoing VoIP vs landline cost comparison expenses, such as per-minute fees. Both VoIP and landline services provide metered and unlimited, nationwide calling plans. But many VoIP subscriptions go a step further, offering unmetered calling to Canada, Mexico, or Puerto Rico. Providers like 8×8 and GoTo Connect offer unlimited calling to dozens of international locations.

Best for Call Quality: VoIP

Humans naturally hear a wide range of sound frequencies, from 20 Hz to 20,000 Hz. High-definition (HD) VoIP audio uses wideband technology. It has a broader frequency spectrum than landlines and supports 30 Hz to 7,000 Hz. Landlines use a narrowband technology, meaning it has a narrow frequency range. The voice quality range is 300Hz to 3,400 Hz.

VoIP services’ higher clarity and audio range make for more natural conversations. It improves speech intelligibility and makes it easier to hear your caller in crowded spaces. Wideband frequencies make VoIP ideal for conference calls, successfully capturing several voices at once and suppressing background noise. However, this landline vs VoIP debate isn’t cut and dried.

Plain old telephone service (POTS) has reliable audio quality because your calls run through underground copper wires and aren’t dependent on your internet. VoIP quality is less consistent if your network slows during peak calling times. Find out if your internet speeds support high-quality voice calls by taking the test below.

Best for Call Handling & Management Features: VoIP

VoIP outperforms landlines because it offers many call handling and management features, such as auto-attendants and interactive voice response (IVR) systems. You can automatically route calls based on the time of day or let callers make a menu selection to speak to sales or billing. Optimizing your call handling methods decreases wait times and improves customer satisfaction.

According to the Customer Experience (CX) Transformation Benchmark survey, the main source of customer dissatisfaction is waiting too long for an agent to pick up. For companies with high call volumes, ring groups and call queues offered by VoIP providers like RingCentral move callers to the right person quicker. So, even minor improvements to your call flow enhance caller experiences.

With a traditional phone system, a human receptionist must handle these duties, or you’ll need to upgrade to a pricier on-premise PBX. Both landlines and VoIP offer voicemail. However, digital phone services provide voicemail-to-text or voicemail-to-email. Plus, you can read voicemail transcriptions in your mobile or desktop app.

Best for Mobility: VoIP

Hands down, VoIP is the best solution for mobility because it provides nationwide coverage and may also offer global solutions. If you decide to move your headquarters, your services won’t be disrupted. Simply update your address in the online portal for continuous coverage anywhere with internet access.

Landlines are a bit more complicated. The largest telephone companies may work in large cities nationally, but smaller regions rely on local solutions. You may not be able to use the same phone company if you move out of its service area and will have to transfer your number to a new provider. In addition, landline installation requires an on-site visit.

Seventy-four percent of employees use a mobile app for making work calls. Thus, flexible VoIP services improves your team’s satisfaction at work. VoIP supports employee mobility, giving them the freedom to answer calls from their preferred devices.

Mobile and desktop apps turn personal cell phones, computers, and tablets into business communication devices. VoIP features like call flip even let you switch devices mid-call without missing a beat. Landline service requires a desktop or cordless phone, and you can’t make calls from your computer or a mobile softphone app.

Best for Advanced Features: VoIP

Telzio reports that 47% of small to mid-sized businesses use SMS to communicate with their customers. Internet-based phone service is your best option for advanced capabilities, especially if you want text messaging or conferencing tools.

Providers like RingCentral and Ooma offer business SMS messaging on entry-tier plans. You can text from devices equipped with softphone apps or even use an internet protocol (IP) phone with texting capabilities like some offered by Avaya and Cisco. Text from a landline or analog desk phone is not possible because copper phone lines only transmit voice.

Likewise, if your team wants to host audio calls with more than two other people or they frequently use video services, VoIP has the advantage. RingCentral supports up to 1,000 audio attendees, whereas a landline generally has three-way calling. You may be able to add an analog conference bridge for additional capacity, but it’s impossible to host a video conference on a landline.

Lastly, VoIP systems integrate with your cloud-based tools, including calendars and customer relationship management (CRM) programs. These integrations allow you to schedule meetings from your calendar and view customer details on your screen before picking up the phone. Since 66% of customers feel treated like a number, personalizing your greeting and approach can go a long way toward building better relationships.

Best for Scalability: VoIP

VoIP is the easiest solution for scaling your business down or up. Simply add them from your online portal if you need more lines to handle higher holiday call volume. As your business expands, you can connect new locations and staff across the globe.

The installation of additional landlines at your business is resource-intensive. Carriers have to connect your services physically, and you may need internal wiring and jacks. Telecom carriers offer two- and four-line systems, but you’ll need an on-premise PBX system that can be cost-prohibitive for higher capacity.

In addition, it’s much easier to scale your phone features with VoIP. Many providers use a tiered pricing model, so you can start with an affordable base package but switch to subscriptions with advanced features at any time. Higher-tier VoIP plans increase your monthly price but aren’t resource-intensive like scaling landline systems.

Best for Collaboration: VoIP

VoIP is the clear winner for collaboration because it provides a hub for employees to gather, interact, and work in real time. It unifies several tools on one platform, including instant messaging and video meetings. Seamlessly switch channels by turning a chat conversation into a video or audio call with one click.

Collaboration features support teamwork and, increasingly, are critical to workplaces. Gartner reports that almost 80% of employees used collaboration tools for work in 2021, up from just over half of workers in 2019. Workers also relied more heavily on real-time mobile messaging tools and cloud storage or content sharing, used by 80% and 74% of 2021 respondents, respectively.

Many providers also offer advanced collaboration tools designed to support your hybrid workforce. For instance, you can automate team reminders and invite an unlimited number of guests to collaborate using the Nextiva Cospace app. RingCentral, on the other hand, offers Team Huddle, a persistent voice and chat room. Explore more features in our RingCentral review.

Landlines simply can’t compete on this front. Sure, you can buzz a co-worker’s line or see which lines are in use from your desk phone. However, analog systems focus on voice communications, so you’ll need to use separate platforms and tools for real-time chat, document sharing, and video conferencing.

Best for Emergency Services: Landline

The Federal Communications Commission (FCC) requires 911 as a standard feature on digital and analog lines. However, business landline phone services provide accurate, reliable connectivity to emergency assistance. Analog phones are hard-wired to a specific location, so 911 operators have your exact address. If there’s a power or internet outage, your phone lines will still work.

Basic or enhanced 911 (E911) services are included with many VoIP services, but the scope of service may differ by device and location. In most cases, you’re responsible for keeping your physical address updated in your admin console. If you’re using a softphone app on your mobile phone, the 911 call typically goes through your wireless carrier.

It’s best to ask your VoIP provider how they handle 911 calls and what data they provide emergency responders.

Frequently Asked Questions (FAQs)

Are there any other alternatives a business can consider?

If you don’t need a full-featured VoIP or landline system for your company, check out virtual phone number services. This system provides a new business number but forwards all calls to an existing phone line, such as your home or cellular number. Grasshopper is a well-known virtual phone number provider, offering five phone lines and unlimited employee extensions for a flat rate of $80 per month with annual billing.

Do analog phones work with VoIP?

Analog phones and devices like fax machines won’t work with VoIP unless you use an analog telephone adaptor (ATA) or VoIP gateway. Hardware pricing starts at around $40, and you can choose solutions for single or multiline networks. Need help connecting your analog phones to VoIP? Check out our guide to the best analog telephone adapters.

Can VoIP replace a landline?

Yes. Business phone systems like RingCentral and Ooma easily replace your landline. Users access services over private or public Wi-Fi and don’t need cellular or landline services. However, virtual phone services like Grasshopper forward calls to an existing number. So, in this case, virtual systems can only replace your landline if you have a cellular phone or home number to forward calls to.

Bottom Line

When it comes to VoIP vs landline for business services, VoIP is the best option for most companies. It’s flexible and affordable, and you can set it up in minutes. There’s also no shortage of providers offering free trials. Give our top pick for VoIP a trial run by signing up for RingCentral.