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VoIP Advantages and Disadvantages (2024 Guide)

VoIP (Voice over Internet Protocol) is a communication technology that allows you to handle calls using the internet rather than the physical copper wires of a landline. Over the years, the technology has improved by leaps and bounds and many businesses, both small and large, are utilising it for their processes.

But what are the top VoIP advantages and disadvantages for your business? Discover in this article.

Advantages of VoIP for businesses

The top benefits of using VoIP include cost savings, easy scalability, advanced features and enhanced portability. Other than that it provides greater flexibility, especially for remote teams and increased security.

Let’s look at these in detail.

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1. Cost savings

In comparison to landlines, VoIP comes with lower costs which makes it one of the major advantages of VoIP. That includes both direct and indirect costs.

Direct cost cutting:

Firstly, a VoIP line is available at a cost of less than 50% of what a landline phone line costs. Basic packages start at £7- £10. Of course, if you want advanced features and unlimited international calls, etc., the rate will increase but it will generally be much lower than the traditional landline system.

Cost of landline phone line Cost of VoIP phone line
Lowest: £20- £25
Lowest: £7- £10
Highest: £25- £60
Highest: £20- £50

Secondly, most packages by reliable VoIP providers come with unlimited local calls and affordable international calls. Unlike landline phone systems where you have to pay per-minute charges, you can manage high call volumes with VoIP at a fraction of the price. Generally, VoIP providers allow PC-to-PC VoIP calls for free and quite a low cost for PC-to-phone calls.

Thirdly, it saves the upfront cost of a Private branch exchange (PBX) which you have to install for a landline system in your office. A basic PBX costs upwards of £250. With VoIP, you only need a broadband connection and that’s it.

Indirect cost cutting:

VoIP packages offer advanced features such as conference calling and auto-attendant which come at an additional price for landline packages. The remote employees of your company can stay connected without needing to be present in the office physically or even owning a physical desk phone.

Secondly, mobile VoIP and softphones allow you to manage calls on your existing devices like smartphones and laptops. That means you don’t even have to purchase the desk phones to make and receive calls. This is impossible when working with a landline system.

2. High portability

There are 2 types of VoIP numbers – fixed and non-fixed. A non-fixed VoIP number is a virtual phone number that is completely portable. That means it can be used across different devices wherever you go, provided you have an internet connection.

This allows your employees to manage calls easily even when travelling across the globe without missing any important client and customer inquiries. Even when you purchase a VoIP phone, it has a unique address built into it. This also allows you to take it on the go and make calls via internet.

3. High scalability

Scalability is one of the biggest benefits of VoIP. As your business grows or the holiday season arrives when the demand for calls increases, you can easily add new virtual lines by contacting your VoIP provider – no complex setup or process involved. It can be called as simple as flipping a switch.

In comparison, the traditional landline system with a PBX is difficult to scale. If you want to add a new line, you need an additional copper wire, hardware and even phone jacks.

Another aspect of scalability is the variety of additional VoIP numbers your business can purchase. Whether you want to introduce a toll-free number for a new service or get a recognisable vanity number for a new office, VoIP makes it easy. And you can even assign shared numbers to new team members. For example, if you open a new office in Australia, you can share the number of your existing Australia office with the employees over there.

Moreover, you can upgrade your existing package as well – include additional features like recorded greetings, ring group and call centre analytics without needing any additional hardware.

4. Advanced features

New VoIP features have streamlined multiple business processes and increased employee productivity over the years.

One of them is live call centre analytics. Advanced systems use AI and Natural Language Processing (NLP) to scale all calls for keywords that display a positive or negative customer sentiment. Using them, you can improve your customer support. The system also provides precious data points like call time, status of calls, segmentation of call inquiries etc.

Another feature is advanced call transferring which allows the call to be distributed among different departments. This helps your business become more approachable and reduces the degree of unsolved issues.

Other features include screen sharing and video conferencing. They improve the collaboration among team members and enhance teamwork.

5. Increased security

Another benefit of VoIP services is the extensive security protocols they offer. Cybersecurity has become one of the biggest threats for modern businesses and thus you require a secure communication system.

VoIP enables that by taking advanced security measures to protect you against digital eavesdropping and hacking.

  • Encryption: Encrypts the media streams (audio plus video) and signalling traffic to secure communication between the caller and the receiver.

  • Authentication: Ensures that only authorised users can access the VoIP network by requiring login details.

  • Network segmentation: Separates VoIP traffic from other network traffic to minimise the risk of unauthorised access.

  • Firewalls: Protects the network by filtering traffic and blocking unauthorised access.

6. High flexibility

As mentioned above, VoIP calls can also be managed via softphones (mobile phones, laptops and computers). This allows your employees to handle calls without being limited to a fixed desk phone and location (as in the case of a landline desk phone). They can move around while taking the call and perform other tasks alongside like checking customer information or noting down details.

Not only that, it frees up desk space and cuts the cost of purchasing hardware-based desk phones.

7. Clear sound quality

Back in the day, unclear voice quality was considered a major problem with VoIP calls. Not anymore. With consistent technology betterment, bandwidth adjustments and global points of presence, the sound quality has become clearer and crispier without any echoes or jitters. It’s a night-and-day difference from the past.

Yes, that entirely depends upon the internet connection your business is using. Generally, a VoIP call takes 85 – 100 Kbps of internet bandwidth. If your business can manage an internet of 10-25 Mbps, you will likely have no problems handling large volumes of VoIP calls.

Disadvantages of VoIP

Major disadvantages of VoIP include reliance on an internet connection, the need for a regular power supply and limited support for emergency calls. Let’s discuss them in detail.

1. Requires a good internet connection

A VoIP phone system can not operate without a stable and powerful internet connection (depending on your business needs). Generally, one VoIP call takes 85 -100 Kbps of internet bandwidth, thus you can ensure a smooth operation with a 10-25 Mbps connection. Luckily, the decreasing prices of internet packages now allow you to integrate high-speed internet systems within your business without draining your wallet.

It is recommended that you opt for cable or fibre internet rather than 4G/5G cellular networks because they are more stable in terms of bandwidth and reliability.

2. Needs an uninterrupted power supply

This is another big disadvantage of using VoIP. Unlike a landline system that remains functional during a power outage, a VoIP system needs a regular power supply because it requires internet to operate.

You either have to arrange a backup power supply or wait for the restoration of power in case of a power outage.

3. Limited support for emergency calls

With VoIP service that is designed to be portable, emergency service workers like 911 won’t be able to track your correct location easily because you might not be present at your billed location at the time of call.

Since landline numbers are assigned to a physical location, emergency services can reach them correctly even if they don’t communicate their location. That is not the case with VoIP.

Many VoIP providers have come up with a solution for this problem, however. They provide the E911 service which allows the callers to provide a physical address to emergency

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One big advantage of using an IP phone is that it allows you to make internet calls from anywhere without being limited to a physical location, unlike landline phones. Additionally, calls made with an IP phone (or VoIP system) are cheaper than landline calls.

One of the biggest cons of using VoIP is the dependence on the internet to make calls. That means if you don’t have internet access or there is a power outage in your area, you can’t make VoIP calls.

Call rates largely depend on the VoIP provider package and the type of call you’re making (international or local) but generally, a VoIP call consumes 85 – 100 Kbps of internet bandwidth. This amounts to 0.5-3 MB/minute and thus, it doesn’t consume a lot of data.

If you have a high-speed internet connection(10-25 Mbps), you need not worry about VoIP slowing down your internet. The calls are quite small and will barely affect other operations you’re executing on the internet. As an example, a 30-min session of VoIP calls uses less bandwidth than a 30-min session of internet browsing.

Use VoIP instead of a cellphone for cost savings, expanded capabilities such as call forwarding and conferencing, improved corporate scalability, and the ability to make and receive calls from anywhere with an internet connection, hence increasing flexibility and efficiency.

Written by:

Isabella Robinson
Isabella Robinson
Isabella Robinson is a seasoned business content writer, leveraging several years of experience to craft impactful narratives that seamlessly blend business insights with engaging storytelling across diverse industries. Her expertise lies in delivering compelling content that resonates with audiences.

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