Standard phone service vs VoIP: What’s the difference?

For small and medium-sized businesses (SMBs) using an analog phone system, making the switch to VoIP (voice over internet protocol) can be intimidating. To help determine if it’s the right move for your enterprise, we’ve done the research and have compiled an in-depth comparison between analog and VoIP phone systems to help you make the best decision for your business.

The main differences between VoIP vs. Analog phone system can be seen in the way they work. Landlines transmit voice into analog signals through a copper wire connection from your home or office to your telephone service provider’s central office.

In short, landlines require a physical connection (copper wire) in order for it to work.

On the other hand, VoIP uses a wireless, cloud-based system that transmits voice digitally over the internet in the form of data packets. Since VoIP works through the internet, you need to have a reliable broadband connection for it to work efficiently and have good call quality.

Now let’s see which one wins in technology, cost-effectiveness, reliability, and features.


Both landlines and VoIP use a Private Branch Exchange (PBX) that manages phone calls internally and externally in an organization. This system was developed to reduce communications costs for SMBs by letting them handle their own telephone system routing while still being able to connect to their telco’s PSTN (public switched telephone network).

PBX allows a company to assign an extension in multiple offices within the same building. Analog phone systems have a PBX box within the premises.

Analog PBX systems used in landlines require phone lines and need a complex hardware setup within a company location. Because VoIP is cloud-based and uses the internet to send and receive phone calls, a phone line isn’t necessary. This is a major advantage for SMBs that have a strong broadband connection and are looking to embrace and leverage various technologies.

Moreover, PBX boxes require a constant software upgrade. And that’s why companies usually hire an expert to keep their system running well and address any issues that arise.

But with VoIP’s Cloud PBX features, there’s no need for you to manage a hardware device like the PBX box because everything happens in the cloud! There are no software upgrades to deal with and very little chance of being without call functionality.


If there’s anything that makes VoIP the number one choice for SMBs, it’s the ability to be location independent and to scale with ease. You can add or remove users/lines easily and at a relatively low cost. In fact, research indicates that VoIP can cut startup costs by up to 90 percent. It’s no secret that one of the top priority of any business is to keep costs low and increase ROI, so in this category, VoIP takes the cake.

Analog phone systems keep you stuck in one location because it requires a physical connection to work, and if you ever decide to scale or open up a business in a new location, you’re going to have to buy extra hardware and phone lines.

Typically, VoIP vendors offer a mobile app that allows your employees to use a smartphone or a computer as their desk phone whenever and wherever they are in the world. This is a great feature that leads us directly to our next topic.

Rich Features.

Modern VoIP systems have new and advanced features that can be tailored to meet your unique business needs without breaking the bank. You can set up your own music on hold, IVR, call queueing, and more. Many of these features are not available with traditional phone services. Yet another bonus is that VoIP systems have much better sound quality than analog phone lines. This is because the digital system compresses audio sounds, removing any unnecessary frequencies. Other VoIP features include:

  • Encrypted security.

  • Self-managed, easy to use Switchboard interface.

  • Remote calling (super important right now as millions continue to work from home).

  • Click-to-dial.

  • Desktop and Mobile soft phone applications.

  • Self-managed online portal accessible anywhere, any time.

Moreover, most VoIP providers also offer CRM integration for tools like Salesforce. This way, your employees will be able to load customer information faster and with ease as the customer reaches them.


We touched on this briefly above, but it’s worth going into more detail about. You may think a landline phone service would be cheaper than a VoIP, but this isn’t the case. VoIP’s rates are very affordable, the service is more efficient, and we’ve found that there is a much higher rate of satisfaction amongst SMBs who go this route.

With an analog phone system, the initial setup for a landline is expensive because it’s extremely labor-intensive. But with VoIP, that’s not the case. In fact, there’s no setup fee because all you need to do is create an account to get started.

There may be a need for additional hardware but it mostly depends on your personal preference and needs. Most of the time, the hardware necessary to call from your desktop computer is available. Your computer already has a microphone and speaker, and that’s all you need to get started. It sounds too good to be true, but it’s not! VoIP is truly that easy, as long as you have a computer and a good internet connection.

If you wish, there are numerous upgrades that can be made to a given VoIP system, such as purchasing an upgraded headset or a VoIP phone that you can connect via Wi-Fi for added convenience.

Second, maintenance with a hosted VoIP service is little to zero. Since VoIP runs via the internet, there is no hardware that has to be maintained. Landline phones sometimes require a technician onsite or periodical tech visits for routine maintenance to prevent interruptions.

Third, there are a lot of affordable VoIP plans in the United States that allow you to call internationally or anywhere in the nation at a fraction of the cost of standard voice plans. Also, the costs of adding features with VoIP is very low compared to landlines. With landlines, you may need to upgrade or add a new piece of equipment if you want a new feature, and that only adds to the cost of your monthly plan.

And finally, VoIP has a more expansive list of features like a virtual receptionist and IVR that are typically included in your monthly plan.

We hope you now have a good understanding of the differences between analog phone systems and VoIP and can make an intelligent decision about which is best for your SMB. If you have any questions or are curious about your options through 2talk, don’t hesitate to ask.


If you have a compatible network bandwidth and a high-speed internet connection, there’s no question around your VoIP phone’s reliability. Just make sure that you have a backup power source in case of power outages or a secondary internet connection in case your primary internet service provider is having network problems.

If you are not running a big call centre with hundreds of people, your residential internet speed should still be able to meet your needs and give you good and clear sound quality.

Switch to Vaitel Business VoIP U.S. now.

There’s no doubt that VoIP is the clear winner, and we can safely say that it is the future of business communication. It’s high time to take your business to new heights and experience the difference that VoIP can bring.

Vaitel is one of the leading VoIP providers in the U.S. and has helped many businesses set up their business phone systems across the country.

Get in touch with us today and we’ll show you how you can change the way you communicate with your customers and clients for the better through VoIP.