img img
Stay In Touch

Lucky Mag is supported by our readers. When you buy through links on our site, we may earn a commission. Learn more.

Top Advantages and Disadvantages of VoIP

By: Sheryl Cannes
Updated on: February 02, 2024

VoIP services supply businesses with effective communication systems that surpass traditional telephone services. As an all-in-one solution, VoIP assists companies to run more efficiently.

Employees can do a great deal more than make and take voice phone calls. VoIP is a unified communication system that uses the Internet to foster relationships. From these connections, comes an increase in customers and profits.

Companies that want to switch their current phone system to VoIP must learn its good and bad effects. Many owners want to know how VoIP will impact how their business operates. Will it help or hinder daily work routines, procedures, production, or communication?

Businesses must understand how VoIP operates to understand the full scope of its advantages and disadvantages.

What is VoIP: Advantages and Disadvantages

VoIP stands for Voice over Internet Protocol, which is a form of hardware and software. All it needs to run is an Internet connection, for this is what VoIP uses as its communication delivery tool. In contrast, landlines use traditional circuit transmissions from the PSTN (public switched telephone network) as its transfer tool.

Voice Over Internet Protocol sends voice data in packets using the IP network for calls. It is a process, unlike the traditional phone system, which uses copper wires to transmit voice signals.

Along with having a phone function, VoIP offers many other benefits, including advanced features.

VoIP features include:

  • Unlimited voice calls
  • Conference and Group calling
  • Advance Call Quality
  • Voicemail to text
  • Call routing
  • Call recording
  • Call forwarding
  • Call Analytics
  • Call queuing
  • DND (Do not disturb)
  • Auto-attendant
  • Anonymous call rejection
  • Business text messages
  • Custom ringback
  • Extension dialing (Number change)
  • Instant messaging
  • Speed dial
  • Interactive Voice Response (IVR)
  • Mobile app
  • Online fax (eFax)
  • Priority alerts
  • VoIP Caller ID
  • VoIP Switchboard

The above list only covers a few incredible VoIP features, which by itself is a huge advantage. Yet, gaining as much information about VoIP is the most effective way to make a final decision about switching.

You may feel the pressure to use VoIP due to many other small businesses already embracing it. Today, everyone is looking for methods on how to unify communications and ease processes in the workplace.

Make sure you feel entirely confident in your choice to use VoIP as your phone service. Even with all the greatness it offers, it may not be the best fit for every person or company.

To see if VoIP is right for you, take a look at the top VoIP advantages and disadvantages.

What are the Top Advantages of VoIP?

VoIP Advantages:

  • Lower costs
  • Higher scalability
  • Service mobility
  • Increases accessibility
  • Support multitasking
  • Efficient client interactions
  • Improves reliability

Knowing the benefits of using VoIP will solidify your decision to make the switch.

1. Lower Costs

Business owners continuously worry about their company’s bottom line. Always looking for cost-saving opportunities, the same applies when searching for a business phone system.

There are several reasons why a VoIP business phone system can save your company money.

  • Using what you already have: The Internet and Mobile Phones

Most businesses already use the Internet and have mobile phones. Employees use both to send company emails and to make calls anyway, so why pay the extra charges?

Save your cash by using what you already have to make phone calls and host video meetings. You do not need to continue paying for separate hardware or bills.

Your business no longer has to spend money on both phone services and the Internet. With VoIP, you only need an Internet connection to do it all, so why not use it for your phone system?

  • Cost savings per line

The landline phone system has a recurring monthly cost of around $40 to $50 per line. The price usually includes the ability to make local-only calls and typically does not cover long-distance calls.

With VoIP, you could be saving your business at least half of what you are paying right now for your landline phone system. VoIP plans are often around $15 to $20 per line. However, the price difference depends on the VoIP provider.

  • Phone hardware costs

When setting up a traditional phone system, you need to consider the cost of hardware. The phone system often needs on-premise PBX (Private Branch Exchange) installations. Your PBX determines the number of landline office phones you can connect.

Businesses must also factor in the cost of each desktop phone and the copper wiring. Electrical costs associated with setup can also occur. Each part of the landline process usually comes with hefty price tags attached.

Since VoIP networks use the broadband Internet connection, it does not require extra hardware or wiring.

VoIP allows both voice and data on the same channel concurrently. Only one Ethernet connection is required to connect multiple business VoIP desk phones.

VoIP uses your existing high-speed Internet connection, which gives your business options. You can choose for your employees to go completely wireless and to have more mobility. They can connect through an available app, computers, or smartphones.

  • Business Phone Service Plans

To use business phone hardware requires a service plan. Exact prices will differ based on the VoIP service provider and your desired features. The cost of calling is cheaper with VoIP than with PSTN.

Most of the reduction in cost is due to data carriage costs. Businesses no longer have to cap their Internet bandwidth and broadband connection.

Internet speeds have seen significant improvements, and data costs are not as high as they used to be. Businesses that use VoIP can drastically reduce their phone bills in several areas. Cost reductions can happen with local, nationwide, and international calls.

VoIP services can also remove other recurring expenses like taxes and maintenance costs. VoIP phone service providers usually include these fees in the price of their service plans.

2. Higher Scalability

Another advantage of VoIP is scalability. VoIP is a phone system that grows along with your business. Scalability is possible due to VoIP not needing expensive hardware. It is a solution that works with your company.

Higher scalability provides businesses with a better way to handle many possible scenarios. For instance, when there is an increase in demand during vacation periods. With a VoIP phone system, you can manage your options without having to buy more lines or hardware.

3. Service Mobility

One of the benefits of VoIP service is to make phone calls from anywhere. You cannot get this feature from traditional phone services.

As long as your location has an Internet connection or Wi-Fi, you can make business calls through VoIP. You and your employees gain the freedom that service mobility provides.

If a call does not receive an answer, VoIP can direct the call to another employee or voicemail. No matter your location, you can connect to your business using a softphone app, mobile device, and VoIP services.

Employees do not have to be physically in the office to work, which allows your business to go on as usual while on-the-go. Business owners have new options, which opens them up to recruiting better employees from different areas.

Your business can now offer remote work or create a fully mobile workforce. VoIP enables your employees to stay productive and connected regardless of their location.

4. Increases Accessibility

If you or your employees are not in the office or near a desktop phone, calls would be missed. This is a prime example of one of the issues using a traditional phone system.

When phone calls go unanswered, business transactions cannot occur, which is a significant problem. Every phone call you miss is a missed opportunity to drive revenue.

By using VoIP, your customers gain more access to employees and vice versa. Whether your staff works remotely or travels often, clients can still connect to them.

VoIP makes it easier for employees and customers to converse and build trust. Clients know they can rely on your employees because they can connect to them using various methods. VoIP communication happens through a computer, laptop, tablet, and mobile phone.

5. Support Multitasking

Along with the ability to make and receive phone calls, VoIP allows you to do so much more. Employees can increase productivity with a VoIP phone system and its features, which supports multitasking.

While having a conversation, workers can send documents, images, email, and video simultaneously. You do not have to stay stuck doing only one project at a time; you can get more work done.

It is plain to see how VoIP can improve your business, but since nothing is perfect, it has some disadvantages too.

What are the Top Disadvantages of VoIP?

VoIP phone systems do not come without flaws. Here are the top disadvantages of VoIP:

  • Reliable Internet Connection Required
  • Latency and Interference
  • Consumption of Cellular or Internet Data Bandwidth

VoIP is not a new technology, and it has had many improvements since it first launched. When VoIP first came on the scene, most associated it with many disadvantages. Some of these issues included poor call quality, dropped calls, and latency. Yet, even with all the upgrades, some of these issues still exist.

It is best to know the disadvantages of VoIP to ensure you choose the right type of phone system for your business.

1. Reliable Internet Connection Required

Even though VoIP does not require hardware like traditional phone lines, it does need a secure Internet connection for it to work. If you travel into areas where the Internet strength weakens or becomes nonexistent, calls will drop or not happen at all.

With VoIP, your business does get more mobility than from using landlines, but this also has some limitations. To truly ensure you can take and make calls anywhere, you will need to learn where you can go to ensure you will have Internet access or Wi-Fi.

2. Latency and Interference

If you do not have access to a fast and steady Internet connection, your voice quality will plummet. The speed and strength of your Internet connection really does matter when it comes to VoIP. Internet that runs at low speed will impact your business by causing latency and interference with phone calls.

Slow connections are a significant disadvantage to VoIP, your customers, and business. If customers have to call your company multiple times for the same problem, you need to fix it immediately. Poor call quality not only causes interruptions in calls but in business operations too.

Ultimately, how effective a VoIP phone system depends on the quality of your Internet connection. You want clear calls to come through your phone system every time, not ones that lag or dropout. Your connection also impacts video conferencing, messaging, and other essential VoIP features.

3. Consumption of Cellular or Internet Data Bandwidth

Along with needing a robust Internet connection for VoIP, you must have good bandwidth. These two components are the key to having high-call quality and for making concurrent calls inside the office.

Your company needs to ensure your system and devices can handle the amount of data consumption it requires. Otherwise, everyone will experience echoes, delays, and background noise during every phone call.

With too little bandwidth, employees and managers will not be able to connect via video or messaging, etc. It becomes yet another disruptive element in your business.

Your VoIP communication system must have enough computing, cellular, digital, and Internet data bandwidth to transfer information across a given pathway.

Is VoIP for Business Use Only?

Most people know about business VoIP but are entirely unaware that residential and individual VoIP exists too. Your home telephone can use its household Internet connection to route phone calls.

You can select a VoIP provider for both your home and business, but there are differences between the two. VoIP home and business will differ in things like pricing and features.

Residential phone services often have very straightforward pricing and plans, while business VoIP technology offers a variety of prices and plans to match the different types of companies wanting VoIP.

Residential VoIP providers offer:

  • Multiple voice mailboxes
  • A couple of phone lines
  • One phone number
  • One virtual extension
  • One forwarding number
  • Basic home phones and unlimited voice plans

Since businesses use more minutes than homes do, it typically needs more system, feature, and package options. Some companies need VoIP to operate call centers, use auto-dialers, virtual PBX, and virtual extensions. As VoIP business phone systems need to access other levels of service, it requires a VoIP provider that can handle what businesses rely on most.

Business VoIP providers offer:

  • Multiple phone lines
  • Phone extensions
  • Video conferencing
  • Auto-attendant
  • Conference bridges
  • Softphones
  • SIP trunking
  • Telepresence
  • Integrations
  • Call queues
  • A host of software and hardware solutions
  • Monthly and Annual phone plans and pricing tiers

Individuals can also use VoIP services, as it too only needs access to the Internet to connect. In fact, many already use VoIP telephone systems without even knowing it.

Most people already have VoIP applications on their devices. Today, many computers and mobile phones have either free or paid VoIP apps on them such as Skype, Zoom, and Facebook Messenger.

Conclusion

VoIP communication has many advantages and disadvantages. It can do many great things but still has a few restrictions. For example, it can help with work productivity, but cannot operate without a stable Internet connection.

Whether you choose VoIP for your phone system heavily depends on your business, home, and individual needs.

img
 

Feeling Lucky?

Sign up for updates and
exclusive deals.