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VoIP vs. Landline: Unraveling the Cost Factor for Businesses

Last updated: 30 Oct 2023

Remember the days of the fax machine and the beeper? Just like them, landlines are on the fast track to becoming obsolete as a mode of communication. While they have been useful in the past, their limitations are increasingly apparent in today’s fast-paced business world.

But there’s good news. Voice over Internet Protocol (VoIP), a game-changing technology, is revolutionizing how businesses interact with clients, customers, and employees. In this blog, we’ll explore why VoIP is the future of business communication and why it’s leaving landlines behind. We’ll discuss its cost savings, scalability, features, and more to help you decide if it’s time to cut the cord and embrace the VoIP revolution.

Understanding VoIP and Landline

Voice over Internet Protocol (VoIP) and landlines are two communication technologies businesses use worldwide. 

VoIP is a revolutionary technology that allows the transmission of voice calls through the Internet. It converts your voice into digital signals, sends them over the Internet, and reconverts them at the recipient’s end. This technology enables businesses to call from computers, VoIP phones, and other data-driven devices. 

A landline, also referred to as a fixed line, is a traditional telephone system that operates through a physical telecommunications network. Businesses using landlines have dedicated phones or switchboards installed on their premises. 

In a business setting, VoIP provides flexibility and advanced features like call forwarding, call waiting, voicemail, and caller ID. It also supports conferencing, allowing multiple people to communicate simultaneously. On the downside, VoIP relies heavily on Internet connectivity. Any disruption in the Internet service can affect call quality or lead to dropped calls. 

Landlines in a business environment offer unmatched reliability. They have been around for over a century and have proven their worth in providing consistent, high-quality voice transmission. Landlines work independently of Internet connectivity, ensuring uninterrupted communication. However, they lack the advanced features VoIP provides and can be costlier due to installation and maintenance costs.

Pros and Cons: VoIP vs. Landline

When comparing VoIP and landlines, it’s essential to consider their advantages and disadvantages, particularly concerning cost. 

VoIP’s primary advantage is its cost-effectiveness. It eliminates the need for expensive hardware and reduces call costs, especially for long-distance and international calls. It’s also scalable, meaning businesses can easily add or remove lines as needed, which isn’t always possible with landlines. However, VoIP’s dependence on Internet connectivity is a drawback. A poor Internet connection can lead to low call quality. 

Landlines offer unbeatable reliability and consistent call quality, making them a safe business choice. They’re not reliant on electricity, so they remain operational even during power outages. However, landlines come with higher setup and maintenance costs. They also lack the advanced features VoIP offers, which could streamline business operations and improve efficiency.

The Cost Angle: VoIP vs. Landline

Several factors come into play regarding the financial aspect of VoIP and landlines. Let’s delve deeper into each of these: 

Initial Setup Costs: A VoIP system generally involves lower costs than a traditional landline. With VoIP, you primarily need a reliable Internet connection, VoIP software, and a compatible computer, smartphone, or VoIP phone. In contrast, setting up a landline system often requires substantial upfront investment. It involves installing physical lines, purchasing handsets, and potentially setting up an on-premise PBX (Private Branch Exchange) system for multiple extensions and call routing features. 

Monthly Service Fees: The monthly service fees for VoIP can be significantly lower than those for landlines. Most VoIP providers offer unlimited domestic calls and significant allowances for international calls. On the other hand, landline services usually have separate local and long-distance plans, and international calls are typically more expensive. 

Cost of Additional Features: VoIP systems often come bundled with advanced features like call forwarding, auto attendant, and voicemail-to-email without extra charges. Conversely, landline providers often charge extra for additional features beyond basic voice calling. 

International Calling Rates: One of the standout advantages of VoIP is the low cost of international calling. Because calls are routed over the Internet, international call rates with VoIP are much cheaper than landline rates. Some VoIP providers even include certain international destinations in their standard packages. In contrast, landline services often charge high rates for international calls, which can significantly increase costs for businesses with global communication needs.

Beyond the Costs: Examining Features

Scalability of Each Technology 

VoIP offers superior scalability compared to landlines. With VoIP, businesses can easily add or reduce lines per their needs, especially for growing businesses or those with fluctuating demand. On the other hand, scaling a landline system often involves physical installations and can be time-consuming and costly. 

Maintenance Requirements and Related Costs 

VoIP systems require minimal maintenance, primarily involving software updates usually handled by the service provider. Conversely, landlines, especially those using on-premise PBX systems, may require regular maintenance, system upgrades, and replacement of faulty lines or hardware. These tasks can add to the overall cost of owning a landline. 

Call Quality Comparison 

Landlines have long been praised for their consistent, high-quality sound. As they operate independently of the Internet, bandwidth usage or outages don’t affect their performance. In contrast, VoIP depends on a reliable and strong Internet connection. Although the quality of VoIP calls has greatly improved over time, it can still be influenced by factors such as Internet speed, latency, and packet loss. 

Overall Cost of Ownership 

The overall cost of ownership considers all costs associated with a system over its lifetime, including setup, maintenance, service fees, and potential upgrade costs. VoIP systems generally offer a lower total cost of ownership due to lower setup costs, minimal maintenance costs, and cheaper call rates. However, businesses must also factor in the cost of a reliable Internet connection. In contrast, while landlines may involve higher initial costs and ongoing maintenance, they provide a predictable monthly expense, which some businesses may prefer.

Factors to Consider when Choosing Between VoIP and Landline

Quality of Internet Connection for VoIP 

The quality of your Internet connection is a crucial factor when considering VoIP. Since VoIP relies on the Internet, a stable, high-speed Internet connection ensures clear, uninterrupted calls. A VoIP system may not be the best choice if your business is located in an area with poor Internet connectivity or frequent outages. 

Equipment Needs for Both 

VoIP and landline systems have different equipment needs. It is essential to have a high-quality router, sufficient bandwidth to handle multiple simultaneous calls, and Internet-enabled devices such as computers, smartphones, or IP phones to ensure optimal performance for VoIP. These components are crucial for a seamless and reliable VoIP experience. On the other hand, a landline system requires physical phone lines, traditional telephones or handsets, and potentially additional hardware if you need features like multiple extensions. 

Training Requirements for Staff 

Transitioning to a new phone system will likely require some training for your staff. While generally user-friendly, VoIP systems have features that users may need to learn to use effectively. In contrast, landlines are simpler and more familiar to most people, so little to no training would be required. However, However, if you opt for a PBX system with your landline, there is a learning curve.
While both VoIP and landlines have their merits, VoIP offers greater business benefits, particularly in cost and functionality. However, the best choice will depend on each business’s specific needs and circumstances. Factors such as the reliability of the Internet connection, required features, and budget should all play a role in the decision-making process.


At BlackPoint IT, we specialize in creating customized VoIP solutions that perfectly match your business requirements and budget. From unified communication to hybrid systems, we’ve got you covered. Our team conducts in-depth VoIP assessments to fine-tune your systems and meet your unique requirements. Don’t let communication hurdles slow you down. Reach out to BlackPoint IT today and revolutionize your business communication with our VoIP solutions.