Today, we will discuss the main difference between a VoIP and a virtual phone system. At the surface level, you might think that both terms refer to the same thing. This confusion arises from the fact that sometimes VoIP is casually referred to as a virtual system.
Through this blog, we want to explain the distinction between the two while also keeping in mind the similarities. By the end of this blog, you’ll be able to understand the difference between the uses, cost implications, working, and setup of both systems to choose the best one that matches your needs.
What is VoIP?
VoIP is an IP technology-based communication system that uses the internet for all its operations. You can send and receive audio and video calls, exchange files, and messages via the internet with VoIP. Other than these basic features, VoIP also offers advanced features like call forwarding, queuing, analytics and reports, recording, and much more.
The minimum requirements for setting up a basic VoIP involve an internet connection, access to a VoIP software, and a device with internet connectivity. So, the physical infrastructure for a VoIP system gets reduced to the setup of the internet connection only. Copper phone lines and physical connections used in a landline telephone system are not needed here.
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How does VoIP work?
VoIP calls are transmitted via the internet through the following working process:
- The audio signals are converted into digital signals from their original analogue state.
- Then those digital signals are sent to the network of the VoIP provider through the internet.
Thirdly, those signals are converted back into analogue signals before being received by the receiver on the other end. - In this whole process, the technology of codecs is involved. It compresses and decompresses the data via algorithms. This helps make the system efficient, with more calls being made using less internet data.
What is a virtual phone system?
A virtual phone system is a service that provides your business with a portable business number and allows you to route incoming calls to multiple devices. Depending on your provider, the virtual phone system either relies on VoIP technology or traditional phone networks (PSTN). That means it’s not always internet-based.
So, a virtual phone system is different from a VoIP system in the sense that it is more of a comprehensive concept than a specific technology.
Understanding the working of a virtual phone system
A virtual phone system is a cloud-based system that is different from a traditional landline phone system in many aspects. It utilises the telecom infrastructure of the provider via a PSTN connection, or the internet if it is operating via IP technology. In both cases, the virtual phone system transmits data by converting analogue signals to digital ones. These digital signals provide efficient call exchange between two points with a higher speed and less data loss than analogue signals.
This flexibility allows for a business to make and receive calls remotely, as long as the device is in the system. The additional features offered in this case are fewer in comparison to a VoIP system. We will talk about this comparison in detail later.
Key Takeaways: What exactly is the difference?
Before comparing different aspects of VoIP and a virtual phone system, let’s make sure we completely understand the difference between the two.
- VoIP is a technology, not a service. It always runs on internet-based IP networks.
- Virtual phone systems are service platforms that manage how calls are received and routed. They may or may not be powered by VoIP.
- A virtual phone system might use VoIP or stick to traditional PSTN networks depending on the provider.
- While some might casually refer to VoIP systems as “virtual”, VoIP and virtual phone systems are not the same thing at their core.
- The major difference lies in the distinction between the features offered.
Detailed Comparison: VoIP vs Virtual Phone System
Additional features offered
VoIP system offers a bundle of additional features other than basic voice and video calls. To name a few, VoIP offers to record, queue and forward calls along with providing a call analytics report. All of these features can be used on their own or can be used on a business’s internal system. Since VoIP allows integration of the system with already functioning business collaboration platforms or systems, the process becomes smooth.
In case of a virtual phone system, it doesn’t offer a wide range of additional features. Depending on the provider and the scale of the package, it only offers limited features.
Scalability
VoIP is highly scalable with the ability to add or remove users within the system. It can be operated over an IP softphone without device restrictions or any existing devices owned by the business. So a user can easily be removed from the system, and no resources will go to waste.
However, we can not say the same with a virtual phone system. Even though it operates on cloud technology, it cannot cater to high-scale teams and business operations. Because growth does not only require more users, it also requires modern features with the package.
Call quality
Call quality of a VoIP connection is dependent on the stability of the internet connection. The stronger the connection, the clearer the audio will be and vice versa. The same is the case with a virtual phone system, its call quality depends on the connection strength of the phone network or the internet.
Internet dependence
The functioning of VoIP is completely dependent on the internet connection. A wifi or mobile data connection is needed for a device to make and receive calls. If the connection weakens in the middle of the call, it will affect the quality of the voice transmitted.
In case of a virtual phone system, the service will be dependent on the internet if it uses IP technology. Otherwise, it will use the PSTN network, which doesn’t require an internet connection.
Users of each service
VoIP is mostly used by SMEs in the UK, looking for a secure and scalable communication system for local and remote teams. VoIP allows its users to also make international calls at an affordable cost. All the features make up an attractive package for businesses.
A virtual phone system is also targeted at businesses in the UK, but on a smaller scale. To opt for a professional outlook, a business can utilise a portable virtual phone number to handle customer queries with ease. It cannot serve as the main collaboration system for a business.
Cost consideration
In case of a VoIP system, you have to pay for 2 major components. Internet and a VoIP package. The cost of a VoIP package starts as low as £7 and can go up to £50. The exact charges vary depending on the provider and the number of features offered.
But the baseline is: additional features = a higher price point.
When it comes to a virtual phone system, it becomes apparent that it is less expensive than a VoIP system because of fewer features offered.
Comparison at a glance: VoIP vs Virtual Phone system
| Factors | AoIP | VoIp |
|---|---|---|
|
Technology |
Internet-based (IP). |
Call routing service, which can use VoIP or PSTN. |
|
Connection |
Internet-dependent. |
Internet or PSTN-based. |
|
Features |
Advanced features (analytics, integration). |
Limited features. |
|
Scalability |
Highly scalable. |
Less scalable for large teams. |
|
Call Quality |
Depends on the internet connection. |
Depends on network strength or PSTN. |
|
Integration |
Integrates with business systems. |
Limited integration. |
|
Target Users |
SMEs, remote teams. |
Smaller businesses, basic needs. |
|
Cost |
£7 to £50. |
Typically cheaper |
VoIP vs virtual phone system: which is better for my use?
To decide whether a VoIP or a virtual phone system is best for your business, you need to take a look at the following considerations.
- Business scale – Consider the scale of your business. Does your team consist of members who physically show up for work or handle it remotely?
- Budget requirements – Does your budget allow for a full-fledged VoIP system? Because even if your business needs the system and the additional features that come along with it, it can’t be made possible if it is out of your scope.
- Future in mind – Evaluate the extent of growth of your business. Do you want a system that can adjust and expand to your needs, or is that something you don’t need right now?
- Importance of integration – Whether you need integration with your business systems depends a lot on the nature of your business.
After taking a thorough look at the points mentioned above, here is what you have to do. If you run a small team with simple call-handling needs and a tighter budget, a virtual phone system is the best for you. But if your team is remote, or you need features like call analytics, stronger reliability, and smart integration, VoIP is the right option for you.
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