When choosing your small business phone system, which option should you select: a conventional landline or voice-over-internet-protocol (VoIP) service? Since VoIP offers more advanced call management features, the VoIP vs landline debate seems like it has a clear winner. However, there are some instances where a business landline system may work better. Find out which option is the best for your business based on pricing, features, and specific use case.
- Landline: Better for companies with on-site employees located in a rural area with slower internet speeds or frequent power outages.
- VoIP: Better for businesses with mobile teams wanting advanced features for connecting with employees and customers.
VoIP vs Landline: Differences at a Glance
$50 to $75 per phone line, per month
$10 to $60 per phone line, per month
$0 to $225, one-time fee
Dependent on your internet speed
Available for an extra fee
Available for an extra fee
Inclusive in some plans
Best Price: VoIP
Monthly costs range from $50 to $75 per line, setup fees vary, and extra charges may apply for domestic and international calls or toll-free numbers
Monthly costs range from $10 to $60 per phone line, many plans include a toll-free number, and domestic calls are unlimited
Internet-based telephone systems are almost always less expensive than conventional landlines. VoIP providers offer various plan options that are configurable for small businesses or large enterprises. For instance, RingCentral charges a monthly per-user fee ranging from $19.99 to $49.99. Each user represents a phone line and phone number. Read our RingCentral review to learn more about its pricing tiers.
In contrast, Grasshopper provides plans with multiple extensions starting at $29 per month. For one monthly fee, you get five phone numbers to connect an unlimited number of employees.
Most providers offer unlimited domestic calling, which may include Canada, Mexico, or Puerto Rico, and you can select services with free global calling plans. Additionally, there are no VoIP setup fees, and it’s easy to set up a VoIP system.
With a landline phone system, users pay a monthly fee per phone line, typically ranging from $50 to $75 for basic services. Everyone in your office can pick up these calls, but incoming callers will hear a busy signal or be automatically transferred to voicemail unless you purchase two or more lines.
It can get pricey if you want a four-line service with a private branch exchange (PBX) system. You’ll pay extra for toll-free numbers and may pay per-minute fees for calling outside of your local area. Furthermore, landline providers may charge installation fees for wiring inside your office, and it can be complicated to set up a landline phone system.
Winner: Not only are VoIP systems cheaper overall, but you may be able to save money by using your services for project collaboration, video meetings, and conferences.
Best Call Handling Features: VoIP
Call forwarding, voicemail, call holding, call waiting, and call transfer
Auto-attendant, voicemail, call forwarding, call transfer, on-hold music, call queues
VoIP stands out for call handling features. Unlike conventional landlines, small business VoIP services come with top-notch call handling and voicemail features. Most calling plans offer an automated attendant. It lets you route callers to the appropriate employee or department or set up a call-by-name directory.
Advanced VoIP options may include skills-based or time-based routing. Once callers are on the line, you can improve their experience with on-hold music or recorded announcements. VoIP packages may also provide call queues or ring groups.
In contrast, call handling is limited with landlines. If you select a pricier PBX system, you can take advantage of features similar to an auto-attendant. Otherwise, standard analog functions consist of voicemail, call holding, call forwarding, call waiting, and call transfer. Some providers also offer on-hold music for an extra fee.
Winner: VoIP is the clear winner for call handling features because even entry-level plans come with an auto-attendant for seamless call handling and routing.
Better for Call Quality: Landline
Quality is based on existing copper wire lines and is unaffected by weather or power outages
Quality depends on your internet connection and needs electricity to work
Although VoIP services have come a long way and are very reliable, they rely on your internet service. On the other hand, landlines use underground copper wires that don’t need internet connectivity or electricity to work. For companies without access to high-speed internet or in regions with frequent power outages, a landline can provide higher call quality.
Small business VoIP systems require internet service and won’t work during a power outage. It converts voice data into a digital signal that’s transmitted over the internet. However, if your power fails, you can route calls to mobile phones or other locations. The best way to decide if a VoIP system works with your internet speed is by taking an online speed test.
Winner: Landline systems edge out VoIP for call quality because they’re not reliant on a high-speed internet connection.
Best for Mobility: VoIP
Works on desk and cordless phones
Works on any internet-connected device
For a virtual workforce, VoIP simply can’t be beaten. Your employees can use any device, from softphones to mobile phones, and with call flip, they can switch devices mid-call. Your staff can work from any location, including—in some cases—globally. Administrators use a central dashboard to set call forwarding rules and send calls to any employees using a device connected to the internet.
When callers are transferred to an employee, it’s seamless. Customers won’t know your people aren’t in the office. Moreover, callers can text clients, read voicemails via email, or video chat with them.
Unlike VoIP phones, landlines only work on analog desk phones. Some providers support call forwarding to cell phones, but you don’t have the benefit of a virtual receptionist to make the transfer smoother. Without a central management panel, it can be tricky to configure call forwarding, and you can’t forward calls to non-cellular devices.
Winner: With VoIP, you can forward calls to any internet-connected device. Plus, some VoIP providers support call forwarding to global locations.
Better for Advanced Features: VoIP
Three-way calling and call waiting ID
Audio and video calling and conferences, visual voicemail, call and meeting recording, and transcription
VoIP systems provide advanced features to support company needs and ensure excellent experiences for clients and employees. Many plans include one-to-one video calling and video meetings with up to a hundred people or more. Moreover, you can record calls and meetings. Other options make your meetings more accessible with captions and transcriptions, or your teams can chat during meetings.
Landline systems don’t offer video calling, but some solutions offer phone bridges so you can host larger audio-only conferences. But for the most part, you’ll need to use other platforms for advanced features whereas, with VoIP, you get everything in one platform.
Winner: VoIP plans are chock-full of features for advanced use cases, and these aren’t options with landline services.
Best for Collaboration: VoIP
Extension dialing and shared phone lines
A unified platform for file and screen sharing, team messaging, whiteboarding, and cloud storage
The best business phone systems also function as a team project management tool via a unified communications platform. Users can share screens during a call and walk clients through a project using whiteboard features. With cloud storage, business users can store files and documents in a central location.
VoIP services support real-time collaboration between internal and external teams or clients. Furthermore, providers, such as RingCentral, offer built-in task management and a searchable archive. Learn more about its multichannel business communication features by reading our RingCentral review.
Standard business phone systems handle phone calls. You can’t share documents or screens. Other users share phone lines during calls or dial extensions to talk with other team members. However, its sole purpose is limited to inbound and outbound calling.
Winner: If you want to use your phone system to share documents or screens, chat during meetings, or collaborate with clients, then VoIP is your best option.
Best Landline & VoIP Alternatives
Although most companies benefit from a VoIP system, those without high-speed internet services may prefer a landline. However, small businesses, solopreneurs, and freelancers may choose alternatives to fit their unique needs. Two options include:
- Virtual phone systems: A virtual phone number provides a business phone number, but routes calls through an existing cell phone. It’s a better option for companies looking for an affordable way to separate personal and professional phone calls. Check out our top virtual phone number providers to help narrow down your choices.
- Business cell phones: For sales teams or employees with spotty internet service, a business cell phone can help them stay connected from home or on the road.
Frequently Asked Questions (FAQs)
Is VoIP better than a landline?
For most businesses, VoIP is a better option. It’s affordable and comes with features designed to keep your customers and employees in touch. Plus, with a VoIP system, you can make and receive calls using any internet-connected device.
How is VoIP different from a regular telephone line?
Voice-over-internet-protocol sends voice data over cable, fiber, or digital subscriber lines (DSL). It requires an internet connection and electrical power. In contrast, an analog telephone system relies on copper lines. Making or receiving calls via a landline doesn’t require power or internet service.
Can a VoIP phone be used as a regular phone?
Yes, VoIP phones work for analog and internet-based calling. As long as your current phones can be plugged into your telephone port, then you use them for both service types. It’s also important to note that you use any internet-connected device for a VoIP phone, including cell phones and headsets.
VoIP technology has gone mainstream. Well-known analog providers, like Verizon and AT&T, invest heavily in VoIP solutions and hundreds of other internet-based phone providers exist. Although some organizations prefer a landline due to their physical location or weather conditions, most companies benefit from a VoIP phone system.
With feature-rich plans and unlimited calling, business owners appreciate the flexibility VoIP solutions offer. Additionally, unified communication platforms help companies do much more than simply make or receive calls. Learn more about top-rated solutions by visiting RingCentral.