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VoIP vs Traditional Telephony: A Comparison Between the Two

June 2nd, 2023 | 4 min. read

By Jordan Pioth

Business woman talking on phone while working on computer

If you are looking to purchase a new phone service, it can be challenging to evaluate the many types of solutions and providers available on the market.

VoIP has become the leading phone service for organizations but it’s beneficial to understand how VoIP compares to a traditional phone system.

Understanding the features and benefits of each solution will help you determine if VoIP is a good fit for your organization.

Coeo has delivered thousands of phone systems to customers and knows how vital a good phone system is to an organization.

We want you to know the differences between VoIP and traditional telephony so you can understand more about VoIP and determine if it is best for your organization.

By the end of this article, you will know what VoIP telephony is, what traditional telephony is, and the differences between the two.

What is VoIP?

Voice over Internet Protocol (VoIP) is a type of telephony that uses IP protocol to enable you to make and receive calls over the internet. VoIP can also be referred to as Hosted VoIP or a cloud-based phone system.

The trend toward remote work has made VoIP more popular and is used by many organizations in nearly every industry.

VoIP utilizes the internet to make and receive calls so it requires little to no hardware at your physical location.

A traditional PBX phone system requires hardware to be installed at your location making it more expensive while also requiring space for the hardware to reside.

However, a VoIP provider only needs to install an SBC at the location which is managed by the provider.

Without the hardware requirements, VoIP works effectively in a remote work environment.

It allows you to make and receive phone calls using a wireless phone from any location with a strong and reliable internet connection.

A VoIP connection is integrated into your phone system by a VoIP provider that manages the hardware and services from their data centers.

VoIP technology functions by taking your analog signal and converting it to a digital voice signal that is sent to your VoIP provider.

The VoIP provider receives this signal and then connects it to the Public Switch Telephone Network (PSTN), allowing you to make and receive calls over the internet.

What is a traditional phone system?

A traditional phone system, also known as a landline, Plain Old Telephone Service (POTS) line, or Private Branch Exchange (PBX) phone system, enables the user to make and receive calls over physical wires.

Most traditional phone systems use underground copper wires to make and receive calls. However, new technology has made this mostly obsolete.

This results in the need for hardware at the customer’s locations and space for the hardware to reside.

Additionally, the management and maintenance of this solution are usually taken care of by an in-house IT team.

Traditional phone systems have been used for decades but have lost popularity in recent years due to the emergence of new cloud-based technology.

Differences between VoIP and traditional telephony

VoIP and traditional phone systems have many differences. Some of these differences include:

●      Call routing

The main difference between a VoIP phone service and a traditional phone service is the way calls are made and received.

VoIP calls are routed over an internet connection while traditional phone calls are routed using physical wires. As a result, VoIP requires far less hardware than a traditional phone service.

Traditional phone systems have hardware that must be installed on the premises of the customer’s locations.

●      Features

Traditional phone services offer basic features such as voice calling and voicemail that most phone services have.

VoIP, on the other hand, can integrate with UCaaS allowing you to leverage additional communication tools such as video calling, screen sharing, and instant messaging in a single solution.

●      Cost

Another major difference between VoIP and traditional telephony is cost. A VoIP solution is less expensive than traditional telephony for a couple of reasons.

●      Hardware costs

The main reason the cost of a traditional phone service is higher than a VoIP solution is because of the hardware a traditional phone service requires.

A traditional phone service requires wires to be installed to make and receive calls in addition to hardware costs such as landline phones.  

VoIP, on the other hand, only requires an internet connection to make and receive calls, eliminating the need to install or pay to use expensive wires at your locations.

In addition, since VoIP does not require a physical line, additional phones are an optional expense.

Because calls are made over the internet, any device can be used to connect the call such as a computer or cellphone eliminating additional costs for phones.

●      Maintenance costs

Maintenance costs are also significantly different with a VoIP solution. Since VoIP has very little hardware, there is virtually no cost to maintain your phone service.

Alternatively, traditional phone systems can require maintenance where there are problems with the hardware resulting in increased costs. 

Since traditional phone services are becoming obsolete, the price of hardware repairs and replacements is very expensive due to the lack of available parts.

Next steps to purchasing a new phone service

Now you know what a VoIP phone solution is, what a traditional phone service is, and the differences between the two.

This will help you understand more about VoIP and help you determine if a VoIP phone solution is a good fit for your organization.

No one wants to deal with a poor-performing phone service. An unreliable phone service can hinder employee productivity and can cause communication issues between employees and customers.

As a result, a VoIP solution can improve your organization's communication leading to increased productivity.

Coeo knows how important a reliable phone service is and has helped thousands of customers improve their phone service.

We want you to know the differences between a VoIP phone service and a traditional phone service so you can determine if VoIP is right for your organization.

If you would like to speak with our team to learn more about VoIP or ask any questions you may have you can schedule an appointment. TALK TO AN EXPERT

Read these articles below to learn more about VoIP:

Jordan Pioth

When he's not creating content for Coeo, Jordan loves to watch sports, hang out with friends and family, and anything sneaker-related.