VoIP Service versus Traditional Telephone Service

Before making the switch to VoIP, businesses are often concerned about a comparison between traditional and VoIP service. Concerns over relative quality of both options, up-front capital expenditures required, and reliability.

Quality of service

The quality of VoIP is equivalent to that of the public switched telephone network in most cases. Although in the early days of VoIP this was not the case, advances in technology has eliminated any difference on this front. Users of VoIP however, should be aware that quality can be affected by the bandwidth being deployed. For example, VoIP over a dial-up Internet line would be highly impractical, and voice quality would be poor. For a small business with just a few phones, a standard broadband connection would be adequate, although for a larger business, a fractional or full T1 may be in order to accommodate the volume. Generally speaking though, so long as enough bandwidth is in use, quality of service will be the same for VoIP and traditional phone service.

Up-front expenditures

The PBX is the largest capital expenditure for telephony, and this holds true for both VoIP and traditional service—although VoIP requires a specialized type of PBX, called the IP PBX. The cost differential between the two types of PBXes has narrowed, and the difference is minimal.

One advantage VoIP will have over traditional service, especially for smaller businesses, is that VoIP is available as a hosted service, which eliminates the need for the on-premises IP PBX. Multi-line service can still be provisioned, but the PBX is actually maintained off-site by a third party provider, and fees are usually based on a monthly subscription rather than equipment purchase.

In some cases, when a larger corporation chooses to deploy their own IP PBX on premises, it may also be necessary to purchase IP phones or adapters, and this may represent an additional expenditure if existing phones must be replaced. However, for a new company that must buy phones anyway, the cost is about the same.


Reliability again is roughly equivalent, although since your VoIP service is dependent on a VoIP provider and a broadband Internet service provider, as opposed to the phone company, a company will need to examine the service guarantees of these providers. Examine the service level agreement (SLA) to see if a guaranteed uptime is provided. And while traditional phone lines can and do go down, Internet service can also be interrupted, and when that occurs, phone service would also go down in the case of VoIP. Make sure your provider has demonstrated reliability and a good uptime guarantee.

Portability of VoIP

An advantage of VoIP over traditional service is that because calls are going over the Internet, instead of the phone company’s wires, calls are no longer tied to a single physical location. Additional services can be provisioned to allow phone calls to be made from any location, directly from any computer with a broadband connection, using the same phone number. This allows for example, an executive who travels a lot, to maintain regular phone service while on the road.

A conventional backup

The advantages of VoIP are indisputable. However, some companies choose to retain a single conventional phone line for backup purposes and emergencies. Since a conventional line is not necessarily tied to the electrical system, it can still be used during a power outage, and can still be used in case of a broadband outage as well. For companies that depend on having an outside line at all times, this is often a good strategy.

Back to comparison chart