What is VoIP?
VoIP (Voice over Internet Protocol) is a type of technology that allows you to make calls using the internet, unlike standard phones that use copper lines. Voice data is transferred into data packages that are then transmitted over the internet.
Although this technology has been around since the ’90s, it’s been becoming more and more popular in recent years. This is because of it’s quick and easy installation and unbeatable value for money. VoIP is suitable for all companies, regardless of size or sector.
It’s extremely scalable, so if you have 5 employees or 5000 employees, having a VoIP phone system for your business can be a cost-effective solution to traditional business telephone systems. As long as you have a reliable internet connection you can expect good call quality and a great price.
Business Phone Systems
Despite the new technology that businesses use and benefit from like video conferencing, phone systems have remained as important today as they were in the ’80s. The humble telephone plays an important part in both big and small business operations.
There are a number of types of phone systems, although ones based over the internet are more popular than traditional phone systems like PBX systems. This is due to the ease of set up and a much lower price point that comes with VoIP systems and hosted VoIP.
Voice over Internet Protocol is a type of phone line that offers some great extra services, which is why such a large range of business users install cloud-based systems for their offices.
Types of Business Phone Systems
When speaking to any phone system provider they will usually offer 2 types of systems, although expect many more names for them. The traditional system is a private PBX which would usually involve installing the PBX physically at your location and then using it to make calls.
PBX stands for Private Branch Exchange and allows you to build a telephone network that can communicate internally and externally using different communication mediums like VoIP, ISDN & analog. You can have a PBX system that utilises Voice over IP, although it will be more expensive and most companies now will opt for a hosted VoIP solution instead.
Voice over IP systems have grown so much in popularity because you get the same service but with additional features, cheaper line rental, and lower cost calls. This is as important for small businesses as it is for international corporate giants.
Advantages & Disadvantages of Hosted VoIP for Businesses
Hosted Voice over IP phone systems is the most popular in 2020, largely because they are suitable for almost any business with access to the internet and a softphone. Covid-19 has proved the importance of business systems being adaptable and the rise of people working from home, which is a key benefit of VoIP phone systems.
- Price – The biggest advantage of using a cloud-based phone system like Voice over IP is the saving on costs when compared to traditional copper and hardware options like PBX systems. Generally, you would pay a subscription per user on a rolling monthly basis, which also helps keep more cash in the bank. Furlough schemes lately have shown this can be the difference between businesses surviving an economic crisis or having to close their doors.
- Scalability – Once you have the software installed adding users can take minutes and just get included in your next monthly payment. New users would then simply download the software and login and can start calling straight away.
- Ability to use anywhere – If 2020 proved anything its that businesses need to be adaptable to change. Imagine a global pandemic hits and suddenly your staff all have to work from home. Having a hosted VoIP solution will ensure duties can continue as normal. Employees would simply need to log in from their laptop, tablet, or smartphone and be connected to the internet to make phone calls to anyone.
- Integration to CRM – As with most business cloud applications, internet telephony will often allow integrations into other web-based programs, like a business CRM. Features can include things like click to call, voicemail, call recording & call waiting amongst others. This doesn’t just make life easier for the sales team but can also reduce costs by saving time.
- Extra Features – Traditional PBX systems also have additional features available but they would usually come at a cost. VoIP can offer more than just voice calls. You can send documents and media files with some, along with call forwarding, voicemail, call waiting, conference calling, and instant messaging.
- Ease of Install – Traditional PBX phone systems would require booking an engineer which could take a few weeks, programming, and installation. Hosted telephone systems are cloud-based so installation is simply downloading the software and making your first VoIP call.
- Voice Quality – When cloud-based phone systems first came out the main downfall was the voice quality. This can still occur if you have a poor internet connection but have come a long way. Now you should expect equal if not superior quality to the traditional copper-based systems.
- International Accessibility – When you have a VoIP account, you can make calls anywhere in the world as long as you have an internet connection. This is essential for remote workers, so if you need to call the head office in London but you’re over in India, you can do this with ease for a very little/no cost.
- Security -As VoIP uses the internet to send voice data packets, it is encrypted which stops the threat of being intercepted, which is essential for data security. Also, if you have a hosted platform, your provider is working around the clock to increase security.
- Internet reliant – In this day and age, most businesses will need a reliable internet connection to operate. However rural areas and oversubscribed broadband can often mean they get no choice. If you are on a shared connection like business broadband and it cuts out or runs slow this will impact your VoIP system. One way to avoid this would be to get a dedicated leased line.
- No set location – For most businesses, this won’t ever be an issue, but if an emergency call is made and the caller cannot speak, emergency services cannot locate where the call came from in the same way they do with copper phones.
- Latency/Jitter – This is when the call appears to lag or have a delay. It isn’t usually a problem if you have a good internet connection but the data packets being sent need time to reassemble for a call to be made. Providers develop their algorithms all the time to ensure this can be done in the quickest time. Depending on your connection, your IT team may be able to prioritise the calls on your connection, eliminating any latency or jitter.
Is a business VoIP phone system cheaper than a landline?
In short, yes, VoIP is considerably cheaper compared to traditional landlines. VoIP is cheaper for a few reasons:
Infrastructure – Traditional landlines need a lot of different pieces of technology to make them work efficiently, such as wires, desk phones, lines (multiple if you’re a larger company). All these together plus the extra cost of calling can make a traditional system quite pricey.
With VoIP phones you can use already existing technology, negating the need to purchases any extras (in some cases). If you already have desk phones in place, they can be used (bearing in mind that they’re VoIP compatible). If they aren’t VoIP compatible, you can purchase an adaptor that will solve your problem. These adaptors aren’t costly, so its definitely worth investing into.
Having desk phones can get expensive. With VoIP you can have softphones – a softphone is an application-based phone that can be downloaded onto any compatible device, such as laptops, mobiles, tablets, etc. All you need is a headset and an internet connection and you’re ready to go. Lastly, no extra wires or lines are needed for VoIP to work, all you need is a decent internet connection that can handle the amount of VoIP users you have.
Call Costs – With a standard phone system, the cost of calls can be expensive, especially on 0845 numbers and overseas calls. The average cost of calling for landlines is around 16p per minute, which can rack up if you have lengthy calls, which most businesses do. But this will change depending on the provider and the package you chose, some providers will offer a lower cost at certain times during the day, but this is normally in off-peak hours, which is viable for 9-5 businesses.
International calls are often a big hitter for global companies, the rate will vary depending on the country you’re calling and the provider you’re with. 0845 numbers, again depending on the provider, are more expensive compared to standard calls.
How to get the best price on business phone systems.
While VoIP isn’t expensive, you may find that looking at prices online varies a lot from provider to provider. Some will advertise prices start from as little as £5 per user per month. This may often mean you pay higher for minutes or additional extras that may be cheaper or included free in a provider that charges a bit more monthly.
The first thing to do is understand what your requirements are for a phone system, how many users you will have, and what features you will need it to have. Then do alike for like comparison. Manually this can take a while but by using a comparison site like us you will be matched with the best providers, who have outstanding customer service and are reliable and trustworthy.