VoIP vs Landline Phones: Which is Better for Small Businesses

In 2004, almost 90% of US households had at least one operational landline phone. But fast forward to today, the number stands at a mere 40%.

Landline phones are losing their relevance at a lightning-fast pace, all thanks to a staggering rise in smartphone usage and VoIP technology.

Data fetched from a report indicates that the VoIP global market value will reportedly have a compound annual growth rate of 3.8%, taking it from $85.2 billion in 2021 to a staggering $102.5 billion in 2026.

VoIP technology has revolutionized the world of telecommunications like nothing we have ever seen before. And with VoIP allowing businesses to tap into a wide range of additional features and helping them save their precious dollars, many businesses have switched from a traditional landline to VoIP phone setups.

But that doesn’t mean VoIP is the right fit for every small business. In some cases, sticking to a traditional business landline system might make more sense. For instance, if your business is headquartered in a rural area with poor internet connectivity or frequent power outages, you should avoid switching to a VoIP phone system.

If you’re wondering which one of the two options is the right fit for your business, we’ve got you covered. In this blog post, we’ll explain the differences between VoIP and landline phones and go over the pros and cons of each. 

What is a Landline?

You’ve probably heard of a landline before—you likely even had one in your home at some point. Prior to the invention of landlines, it was literally impossible to communicate by voice with people who were far away. 

Landlines are telephones that use twisted copper wires or fiber optic cable to transmit signals and are plugged into two-or-four pin wall jacks. Traditional landlines are based on analog technology, which means they send signals from one phone to another through a series of physical switch boxes via copper wire.

Unlike VoIP phone systems, landlines don’t rely on a high-speed internet connection. Since the connection uses copper wires, landlines are extremely fast and reliable. This means that even if you reside in a neighborhood with a poor internet connection, you don’t have to worry about your phone lines going down. Landlines are also typically more reliable during natural disasters and bad weather conditions. 

However, one of the major downsides of using landlines is their complicated and time-consuming maintenance. Additionally, the use of analog technology restricts providers from offering advanced features.

To help you better understand whether landline phones are a good fit for your business or not, let’s look at the pros and cons of using landline phones for businesses.

The Pros & Cons of Landline Systems for Small Businesses

Landlines have historically been used by businesses to communicate with their prospects and potential customers. However, with most businesses switching to VoIP phone systems, you may find yourself wondering whether you should stick to the traditional landline phones or jump on the VoIP train.

Allow us to present the pros and cons of landline phones in front of you to help you gain clarity.

Pros: 

→Reliability—As we mentioned earlier, traditional landline phone systems are extremely reliable and fast. That’s because these connections use copper wires and don’t rely on a stable internet connection. If your business is headquartered in an area with poor or unstable internet connectivity, you don’t have to worry about your phone calls spontaneously dropping. At the same time, when bad weather strikes and in case of natural disasters, landline phones are usually functional and can be quickly recovered, resulting in little-to-no business downtime.

→Good Audio Quality—Again, in the case of VoIP phones, if your internet connection is unstable or poor, then it’ll have a major impact on the audio quality. Whereas, in the case of landline phones, the audio quality is usually excellent, unless there’s a bad wire connection.

→Not Impacted by Power Outages—In case businesses experience a power outage, they can still get a signal by connecting their landline phones to a jack. But it’s important to note that this is only true if you own non-electric phones. 

Cons

→Pocket-Draining—The costs associated with installing and adding lines to landlines systems are extremely high when compared with VoIP. Additionally, you might end up having to spend a pretty penny every time you make an international call. Add taxes and additional fees into the mix and you’ll be spending too much money on landline phones. So, if your customer base includes people based outside your country, it makes sense to switch to VoIP phone systems.

→Complicated & Time-Consuming Maintenance—Since landline phones use wires, landline telephone wiring can become quite chaotic and may require you to invest a huge chunk of your time and effort into maintenance. Additionally, you need to have dedicated space for all those copper wires. Because of this, you’ll find messy phone closets and legacy phone rooms in some office buildings that are still dependent on landlines.

→Not Scalable – Adding extra lines for the purpose of adding more handsets for new employees isn’t simple. And, should you decide to scale down, reducing your landline costs can be quite complicated.

→No Regulation for Spam Calls on Landline Systems—These days, the number of spam calls being received by businesses has blown through the roof. While there are regulations in place to stop telemarketers from spamming people on their cell phones, the same isn’t the case for landlines.

So, now you understand the pros and cons of using a landline. But an ever-increasing number of businesses are switching to VoIP phone systems, so let’s learn what the technology is all about.

What is VoIP?

VoIP stands for “Voice Over Internet Protocol.” In simple words, it’s a business communication technology that allows people/businesses to make and receive phone calls over the internet. Unlike landlines, VoIP doesn’t use twisted copper wires.

Instead, VoIP phones are connected to the internet. So, when you make a call, your voice will be broken down into digital packets just like electronic envelopes. These digital packets will be transmitted as data over the internet to the person on the other end of the call.

Since VoIP completely relies on the internet, it’s extremely important to ensure that your business is headquartered in a location with a stable and reliable internet connection. If you want to enable your employees to be more efficient with their day-to-day connections, having a high-speed internet connection is a must.    

While you can use dedicated VoIP phones, several other methods to make VoIP calls include:

• Regular Landline Phone & VoIP Adapter
• Computer
• Smartphone

Now, let’s look at the pros and cons of VoIP phone systems for small businesses.

The Pros & Cons of VoIP for Small Businesses

Companies using VoIP have reported a 20% rise in productivity. Alongside this, switching to a VoIP phone system could help your business save money. To help you make a better decision about whether you should switch to a VoIP phone system, we’ve made a list of the pros and cons of VoIP for small businesses.

Pros

→Budget-Friendly—One of the big plus points of VoIP for businesses is that it’s low-cost and budget-friendly. Since phone calls take place over the internet, you’ll only be charged by your internet service provider for internet access rather than for extra phone service like international calls or call minutes.

→Additional Features—With VoIP, you can tap into additional features like automatic call forwarding, voice analytics, voicemail to text/email, three-digit dialing, and more. These features are usually easy to set up and open up a world of possibilities for businesses.

→Scalable—Another one of the big plus points of using a VoIP phone system for small businesses is that as you onboard new employees or scale your operations, you don’t have to worry about spending too much money on adding extra lines.

→Increased Accessibility—With VoIP, you can make phone calls from literally anywhere as long as you have a decent internet connection. And that’s not all. You can also direct your calls to another person or request voicemails to be emailed to you. In today’s remote environment, VoIP helps businesses ensure remote accessibility, allowing them to make sure that their employees can stay productive no matter where they reside.

→Increased Security—For businesses, phone system security is a huge deal. These days, we’re witnessing the number of spam calls being made to businesses at an all-time high. VoIP can help businesses mitigate security threats, all thanks to technological advancements like improved identity management and encryption.

Cons

→Reliable Internet Connection is a Must—Your VoIP service is as good as your internet connection. If you reside in an area with an unstable or poor internet connection, then it’s advisable to stick to landline phone systems. If your network bandwidth is on the lower end of the scale, then your services may suffer. Every single device should have a minimum upload speed of 100 kbps available.

→Limited Emergency Call Location Tracking—As a result of VoIP’s increased accessibility and portability, it’s extremely hard for third-party to pinpoint the origin of a call. VoIP systems are not guaranteed to support emergency call services, including 911. Calls from a traditional landline phone system can easily be traced. However, the same isn’t applicable to VoIP systems.

→Latency & Jitter—As mentioned before, in case of VoIP calls, voice is broken down into digital packets which are transmitted over the internet. However, if these digital packets get improperly re-assembled or hit delays in transmission, then the intended message may not be rightly transmitted. Latency and jitter may occur due to poor internet connection, insufficient ethernet cables, or the use of inadequate routers.

Now that we have established what landline and VoIP phone systems are, as well as their pros and cons, let’s learn which one is the right fit for your business.

VoIP vs Landline Phone—Which is the Right Fit For Your Business?

While we’re witnessing an ever-increasing number of businesses switching to VoIP phone systems, if you are planning to do the same, we’d advise you to first make sure that you have a strong internet connection.

Internet is the backbone of VoIP. Not having a reliable and high-speed internet connection will result in poor internal and external communication, which will lead to a lack of productivity and poor customer experience.

VoIP has revolutionized the world of telecommunications. Not only is it cheap and budget-friendly, but it also equips businesses with key features that allow them to deliver an outstanding customer experience and establish clear internal communication.

So, at the end of the day, the answer to the question “Is VoIP or a landline phone better for my business?” really depends on how stable your internet connection is, and whether phone systems are a critical part of your daily communications.