What is VoIP?

VoIP stands for Voice over Internet Protocol. That is the technical name for making phone calls over your internet connection instead of through traditional copper telephone lines.

When you call someone using VoIP, your voice is converted into digital data packets, sent over the internet to the other party, and converted back into sound on their end. The whole process happens in milliseconds and sounds identical to a traditional phone call.

You probably already use VoIP without realising it. WhatsApp calls, FaceTime, Zoom calls, Google Meet audio, and Skype are all forms of VoIP. Business VoIP systems use the same underlying technology but with features built for professional use: phone numbers, extensions, voicemail, auto-attendant, call recording, and more.

The main reasons small businesses switch from traditional landlines to VoIP are cost, features, and flexibility.

Cost is usually the first motivator. Traditional business landlines from BT, AT&T, or Verizon typically cost $40-60 per line per month. VoIP plans for small businesses start at $10-20 per user per month and include more features. A 5-person team can typically save $150-250 per month.

Features are the second reason. Business VoIP plans include call forwarding, virtual numbers, IVR auto-attendant menus, voicemail-to-email transcription, call analytics, and conference bridges. Getting these features on a traditional phone system requires expensive hardware and contracts.

Flexibility is the third reason. VoIP phone systems work from any device and any location. Your team can use their business number from a laptop in a coffee shop, a phone in a home office, or a tablet on the road. No physical location is required.

You need less than you might think.

A reliable broadband internet connection is the foundation. Any standard business broadband with at least 10 Mbps upload speed is sufficient for VoIP. The actual data used per call is small, around 100 Kbps per active call.

For endpoints, you have three options:

1. Softphone apps (most popular choice): Your VoIP provider gives you a desktop or mobile app. You make and receive calls through the app on your existing computer, smartphone, or tablet. No additional hardware needed.

2. IP desk phones: Physical phone handsets designed for VoIP. They plug into your network router via ethernet. Popular for customer-facing teams who prefer traditional phone ergonomics. Cost $50-200 each.

3. VoIP adaptors (ATAs): If you have existing analogue phones you want to reuse, an Analogue Telephone Adaptor connects them to your VoIP service. Cost $50-80.

Most small businesses start with just apps and add hardware selectively when specific staff request desk phones.

Cloud VoIP providers offer 99.9-99.99% uptime on their infrastructure. This means less than 9 hours of downtime per year for 99.9% uptime guarantees.

Your call quality and availability depend on three things: your internet connection, your local network, and the provider's infrastructure.

Internet connection: VoIP is sensitive to packet loss and high latency. On a stable broadband connection, quality is excellent. On congested or unreliable connections, you may experience choppy audio. Using a wired ethernet connection rather than Wi-Fi significantly reduces issues.

Local network: On a busy office network, VoIP traffic should be prioritised over other traffic using QoS (Quality of Service) settings on your router. Most modern business routers support this and it takes minutes to configure.

Provider infrastructure: Established providers run multiple redundant data centres and have 99.9%+ uptime records. Downtime is rare and typically brief.

The practical answer: for most small businesses on a decent broadband connection, VoIP reliability is indistinguishable from a traditional phone system.

The differences go beyond just how calls travel.

Number portability: VoIP numbers can be taken with you if you switch providers. Traditional landline numbers can be ported but it takes longer and may require keeping a physical line.

Geographic flexibility: VoIP numbers are not tied to a physical location. You can have a New York area code while running your business from Texas. This is useful for creating a local presence in multiple markets.

Scalability: Adding a new user to a VoIP system takes minutes (add them in the admin portal, download the app). Adding a new landline requires a physical installation and may involve waiting weeks for an engineer visit.

Call recording: Built into most VoIP plans. Traditional systems need separate hardware or expensive add-on services.

International calls: VoIP providers typically offer much cheaper international calling rates than traditional carriers. Some include unlimited international calling to major countries in their standard plans.