Guide

Business phone systems

Advantages and disadvantages of VoIP

Voice over Internet Protocol (VoIP) technology is gaining popularity in business as an alternative to traditional landline and mobile phone calling.

What is VoIP and how does it work?

VoIP is short for Voice over Internet Protocol. It is a technology that allows you to make calls using the internet, rather than a regular phone line. VoIP is also commonly referred to as internet telephony, IP telephony or Voice over IP.

VoIP works by converting analogue voice calls into digital data that travels over the public internet or a private internet protocol (IP) network. Using VoIP, you can make phone calls over the internet to landlines, mobile phones and even computer-to-computer anywhere in the world where an internet connection is available.

As well as audio calls, you can use VoIP for services such as video calls, instant messaging and file sharing. Many VoIP applications are available as stand-alone products or bundled with popular web browsers.

What are the advantages of VoIP?

There are many benefits to using VoIP for business. For example:

  • Cost savings - with VoIP, you pay only for your internet connection. Calls between individuals with VoIP equipment - even international calls - are free.
  • Rich features - VoIP offers a wide range of features: from call forwarding, blocking, caller ID and voicemail, to remote management, automatic call distribution and interactive voice recognition.
  • Collaboration - VoIP integrates easily with other systems and helps staff collaborate through voice, video, web conferencing or instant messaging, usually from a single user interface.
  • Improved productivity - staff can use your communication system remotely and flexibly, with access to your data and network whenever and wherever they need it.

Difficulties with VoIP

While VoIP is often cheaper and more flexible than the traditional phone systems, it’s worth keeping in mind potential problems. For example:

  • Audio quality - depending on your broadband, hardware and services, quality and reliability of VoIP connections may not be as good as the standard phone connections. Common issues that can happen during calls are delays, noise and echo.
  • Bandwidth dependency - VoIP depends on your internet connection. If your connection goes down, so does your phone line. Similarly, insufficient bandwidth will likely cause quality issues with the service.
  • Security - as with other internet technologies, security is a major consideration with VoIP. Possible threats include identity and service theft, phishing, viruses and malware, spamming over internet telephony, call tempering and denial of service attacks.
  • Extra costs - if you use VoIP to phone someone without VoIP capabilities, you can incur additional costs.

Read more about the different types of business phone systems and computer telephony integration (CTI).