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Updated Jan 08, 2024

VoIP vs. Landline: Which Is Best for Your Business?

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Kiely Kuligowski, Business Strategy Insider and Senior Writer

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The phone system you choose can be a make-or-break decision for your business. There are many factors to consider when you’re deciding between a landline and a VoIP system, including cost, reliability and functionality. You may be inclined to write off a landline as an antiquated setup, but traditional systems have benefits that may work better for your business. 

Read on to see which business telephone system is right for you. If you already know the type of setup you need, check out our roundup of the best business phone systems to continue on your purchasing journey.

Editor’s note: Looking for the right business phone system for your company? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What is VoIP?

graphic of a person with headphones on using a computer monitor

Voice over Internet Protocol (VoIP) is a type of communication technology comprising both hardware and software. It allows you to make phone calls using an internet connection rather than a traditional analog landline that uses wires or optical fibers. VoIP is also known as internet calling or IP telephony.

VoIP is transmitted through various methods, including traditional phones, smartphone apps, computer software and specific VoIP-enabled phones.

How does VoIP work?

VoIP works by breaking up your voice into digital packets, like electronic envelopes, and sending those packets as data to the recipient over the internet.

VoIP is available in a variety of systems, making it accessible to anyone with a reliable internet connection. You can use these methods to make VoIP calls:

  • Phone and VoIP adapter: With an adapter, you can use a regular landline phone to make calls over the internet. The adapters plug into a phone outlet or your router.
  • Computer (i.e., a “softphone“): There are many programs or applications that let you make voice calls over the internet, including Skype, Google Voice and FaceTime.
  • Smartphone: With your smartphone, you can download apps, such as Google Voice or Skype, that allow you to make internet calls.
  • Dedicated VoIP phone: VoIP phones look like traditional analog phones but connect directly to a computer network rather than to a phone line.

What equipment do you need for a VoIP system?

The equipment you need for a VoIP system depends on which VoIP method you use. First and foremost, however, you will always need a strong, reliable and secure internet connection. Call quality and reliability depend on the strength of your internet connection. You must ensure that your system will not drop service or be susceptible to hacking. [Check out the top business internet service providers.]

Next, if you plan to use an adapter, you’ll need a compatible landline phone. If your adapter plugs into a wireless router rather than a phone outlet, you will need a router. To get VoIP over a computer, you’ll need a laptop or desktop computer with an internet connection, the proper software or program, speakers and a microphone. Many people opt for a headset that plugs into the computer for better sound quality and ease of use.

If you’re using a smartphone, you will need a Wi-Fi connection and a VoIP app. Most apps (Skype, FaceTime, WhatsApp and Facebook Messenger) offer free calls to other users with the same app. Others allow you to call a regular landline or mobile number, though this usually costs money. Some providers offer a hybrid option that lets you make VoIP calls using minutes included in your home phone plan.

Pros and cons of VoIP systems

graphic of man in front of a computer

VoIP systems are becoming more popular as the world continues to digitize. They offer significant perks, like lower costs, increased reliability and better sound quality. But VoIP systems aren’t right for everybody, especially those with unreliable internet connections or businesses that require significant telephony features.


  • Low cost: The main benefit and draw of a VoIP system is its low cost. Because calls take place over the internet, you are charged only for internet access rather than for call minutes or extra phone service. With traditional phone setups, a system with multiple lines can be expensive, and additional features (like call transferring or queuing) can run up costs. VoIP offers a budget-friendly solution for long-distance calling, since international calls over a VoIP app are often free.
  • Connection anywhere: VoIP systems offer better functionality than traditional phone lines do. The world of business is moving rapidly, and many professionals need to be reached anytime, anywhere. VoIP phone systems enable this by automatically routing phone calls to your VoIP-enabled phone. Wherever you can connect to the internet, you can make and receive phone calls.
  • Sound quality: Sound is usually clearer with VoIP than with analog phone lines, but this, too, depends on your internet connection. A slow connection can reduce call quality, but a strong connection typically results in clear, consistent sound quality.
  • Better functionality: VoIP solutions tend to offer greater functionality than landlines by allowing users to do more than just talk on the phone. You can also host video calls and transmit multimedia messages. Plus, systems often include add-ons such as voicemail, call analytics, anonymous call rejection and voicemail-to-text transcription.
  • Latest technology: Modern communication runs through digital lines, and VoIP digitizes voice communications, making it compatible with the latest technologies. VoIP can work with the newest headsets, smartphones, computer accessories and more. Any cutting-edge technology that uses your voice will work better with a VoIP system than with a landline.
  • Reliability: The digital nature of VoIP makes for extremely reliable communication. IP information exchanges run through some of the most robust infrastructure on the planet. When this infrastructure is supporting voice calls, it adds considerable reliability to the process.


  • Emergency calls: A major downside of VoIP systems is that they’re not guaranteed to support emergency call service, like a call to 911. This is largely due to VoIP’s flexibility; whereas traditional calls from landlines are easily traced to one geographic location, VoIP (and mobile phones) can be used anywhere without being tied to one place. Thus, VoIP providers must have Enhanced 911 (E911) enabled to receive emergency service. E911 customers set a physical address that shows up when they dial 911 on their phones. VoIP providers must cooperate with traditional phone companies that control access to the public telephone system and 911 operators, which can be complicated. (VoIP and the public telephone system are direct competitors.) The best way to find out if a VoIP provider offers 911 service automatically, after activation or at all is to call the provider and ask.
  • Internet dependence: The second major drawback of a VoIP system is that, because it’s fully dependent on the internet, you must have a strong and reliable internet connection. This way, you can ensure decent sound quality and avoid dropped calls. But if your connection is poor or completely down, your phone system won’t work as it should.

If you decide that a VoIP system is the best option for your business, you can select from a variety of highly rated VoIP phone system providers. See our comprehensive Nextiva review for one possibility.

What is a landline?

The landline phone system was invented in 1876 and has remained largely unchanged since then, with the exception of some innovations, like caller ID. Landline telephones work by sending signals through a series of physical switch boxes via copper wire from one phone to another, making them reliable and fast. However, maintenance can be complicated and time-consuming.

How do landlines work?

Landlines transmit voice signals over wires or, now most commonly, fiber-optic cables. When you speak into the handset of a landline phone, the wires or cables transmit your voice as electric signals. On the receiving end of your phone call, your voice is converted back into sound waves for the other person to hear.

There are two types of landline phone systems:

  • Corded: As the name suggests, corded landlines are connected to phone services through a wall jack. Both the base of the phone and the handset are wired together, and they are attached to the wall through a cord.
  • Cordless: With these landlines, only the base of the phone is connected to the wall through a cord. The handset of the phone is wireless and can receive a signal from the base of the phone within a certain range.

What equipment do you need for a landline system?

Landline systems are quite easy to set up and require only a few pieces of equipment. You’ll first need a landline base, which is the central component of your landline system. You’ll also need a handset, which is the part of the system you hold to your ear when you’re on a call.

In cordless systems, the handset communicates wirelessly with the base station. In corded systems, the handset is physically connected to the base via a coiled cord. Finally, you’ll need a landline cord to connect your base station to the wall, which links your system to your phone service provider.

Pros and cons of landline systems

Landline systems may seem like a relic of decades past, but there are valid reasons to continue using them.


  • Reliability: Traditional landline phones are extremely reliable. Because the connection uses wires, you can count on your service not to be spotty or spontaneously drop. This can be vital to businesses, both for maintaining operations and for ensuring that customers can consistently reach you. Additionally, when a natural disaster or bad weather strikes, these phone lines tend to remain functional. They can be fixed more quickly than the internet can, thus reducing downtime for your company.
  • Consistent quality: If you have unreliable internet service, a landline phone can mean significantly better sound and call quality and no dropped calls.


  • Technology: The world is moving away from analog or traditional systems in many areas, and telephony is no exception. The ability to make a call from anywhere in the world at any time is becoming more of a business necessity. Landline systems lack that flexibility, potentially restricting your business capabilities.
  • Higher costs: Landlines are more expensive than VoIP systems, especially when you add features such as voicemail, call waiting or caller ID. Landlines are also subject to taxes and additional fees, which further raise costs.
  • Spam calls: You may be more susceptible to spam calls on a landline than on a VoIP or mobile number. While it is technically illegal for telemarketers to call you on your cell phone, no such regulations exist for landlines. 
FYIDid you know

If you have a landline system but want to take advantage of what VoIP has to offer, consider using a SIP trunk service, which allows you to use your legacy landline PBX (private branch exchange) equipment while still making connections over the internet.

VoIP vs. landline: Things to consider

If you’re deciding between a VoIP setup and a landline system, these are some factors to consider:

  • Equipment: You will need to determine which equipment you already have, like multiple landline phones, and if you are willing to replace or get rid of that equipment if you switch systems.
  • Costs: Examine which features you pay for under your current system and which features you would like to have with your new system. Would those desired features be included in your package, or would they be separate add-ons? VoIP services tend to be cheaper than landlines, but they may lack some key business phone features.
  • Internet reliability: Landlines are known for their reliable call quality and resilience against outages. VoIP systems depend on an internet connection, so without strong bandwidth or a constant connection to internet service, you will be unable to use your phone. Is your business prone to internet disruptions? That could be a deciding factor.
  • Scaling and maintenance: A VoIP system is easy to upgrade and maintain, whereas an analog system may be difficult to scale or upgrade, depending on how old it is. If you have a rapidly growing company or are unsure of your future telephony needs, a VoIP system may make more sense for you.

VoIP vs. landline: How they compare

Here’s how VoIP and landline systems stack up against each other:





Mobile device, landline phone (if using an adapter), router (if needed for the adapter), laptop or desktop (optional), headset (optional)

Landline base station, handset, landline cord, headset (optional)


Virtual receptionist, caller ID, call forwarding, call waiting, three-way calling, three-digit dialing, voicemail to email

Caller ID, call waiting, call forwarding, three-way calling


Starting at $10 for apps; $60 to $1,000 for a physical system, depending on its complexity

Starting at $200 per landline device

Service fees

Only monthly app subscription cost

Additional $15 to $40 per line per month

Internet connection required




Encryption protocols

Closed circuits

VoIP vs. landline: Which is best for your business?

For a quick way to determine which type of business phone system is best for your company, evaluate which of the following descriptions is a better fit for your company.

When VoIP is best

A VoIP system is a great choice for your business if flexibility, scalability and cost efficiency are your top priorities. VoIP’s internet connectivity also makes this type of phone system ideal for businesses with remote or hybrid arrangements.

VoIP offers significant cost savings on long-distance calls, making it a budget-friendly option if your business has a high international call volume. VoIP systems’ features also suit many key business needs, such as conference calls. These systems can also integrate with other business software and applications, allowing you to easily connect and streamline your workflows.

When a landline is best

Landline systems are more suitable if your business prioritizes reliability, security and consistent call quality. Because calls are transmitted through a cable, landlines are fortified against hackers, giving these systems an established track record of data security and privacy.

Landlines are also dependable during internet outages. They ensure stable communication during emergencies, which is crucial if downtime can lead to significant losses for your business. If your company is located in an area with poor internet connectivity, you might find that a landline system is more dependable for maintaining communication.

Connecting with the future of your business

Customers want to inquire about their orders, clients want to discuss partnerships and shareholders want to talk about investments. Each of these parties needs a way to reach you, making a phone system an essential part of your business, especially as it grows. Both landlines and VoIP systems are excellent options for keeping you in contact with the people who help keep your company running and patronize your services. The right type is the one that best meets your needs.

Shayna Waltower contributed to this article. Source interviews were conducted for a previous version. 

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Kiely Kuligowski, Business Strategy Insider and Senior Writer
Kiely Kuligowski is an expert in project management and business software. Her project management experience includes establishing project scopes and timelines and monitoring progress and delivery quality on behalf of various clients. Kuligowski also has experience in product marketing and contributing to business fundraising efforts. On the business software side, Kuligowski has evaluated a range of products and developed in-depth guides for making the most of various tools, such as email marketing services, text message marketing solutions and business phone systems. In recent years, she has focused on sustainability software and project management for IBM.
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