VoIP Advantages and Disadvantages: Overview

VoIP Advantages And Disadvantages

More and more businesses are turning to VoIP phone systems as they are getting better and helping companies save costs while expanding and scaling their services. It helps them boost productivity and facilitate a remote workforce. However, with this potential, companies also experience their share of limitations with digital phone systems like VoIP.

So, if you are planning a VoIP phone system for your growing startup and don’t know whether it is a wise decision or not, no worries. Here is a complete guide on VoIP advantages and disadvantages so you can make a decision for yourself. So, dive right in for more.

Choose the Right VoIP Phone System

Choosing the right VoIP phone system is significant, as it determines your company’s routine operations and staff productivity on a regular basis. So, before you pick the right service provider for your business, here are some things you might need to consider. It can also help you plan your business expansion with the selected service provider.

  • Price: The first thing to consider in this case is the price. Simply put, it comes down to the size of your company. For instance, a small startup or a growing company may want to evaluate an affordable VoIP phone system, while a bigger organization can focus more on the features without thinking much about budgeting.

  • Reliability: It is the second most important thing to look into while selecting a VoIP phone system. This is because you cannot afford risk when it comes to dealing with customers through text and call. So, make sure the VoIP platform offers a high-speed network in order to be always on time with the customers.

  • Scope for Scalability: You also need to consider the scope for scalability while choosing the right VoIP service. For instance, ask the provider necessary questions like whether they facilitate an upgraded plan or whether you are allowed to add or remove team members from your plan as your business expands.

  • Security: Another thing you need to consider here is the security of your provider’s platform. Check whether they have a history of data breaches or leaks. Evaluate their services like encryption and password protection and then finalize the deal.

  • Customer Support: Though rarely, problems can occur with your VoIP phone system. This is why you need a reliable partner that offers better customer support and the needed troubleshooting support. This way, you will not have to spend extra time dealing with the provider.

VoIP Advantages

In comparison with traditional phone systems, VoIP phone systems have several advantages. Some of them are mentioned below.

1. Lower Costs

The first and most talked-about benefit of a VoIP phone system is the significant reduction in the cost. Statistics say that adopting a VoIP network can save your phone bills up to 50%, which is even more beneficial when they are set up with businesses. However, do consider that the cost is usually determined by the needs of your specific business.

Direct Cost Savings

Traditional PBX hardware and phone services require massive initial costs, which is not the case with VoIP phone systems. Here are some ways it helps companies save direct costs.

a) PBX Costs

Simply put, PBX cost, also known as the private branch exchange cost, is the on-premise physical hardware piece that is used to connect multiple landline phones with each other in an office. It can become pretty expensive in analog phones, considering that it requires professional installation and service. So, even a small business ends up spending anywhere between $500 and $2000 per user with analog or IP phones.

This is where VoIP is beneficial for businesses of different scales. It uses a broadband connection for the service, which eliminates the need for extra hardware.

Most organizations with VoIP use SIP trunking or Session Initiated Protocol that acts like a digital roadmap for voice services while keeping the hardware in the office, reducing the cost significantly. It is not only affordable but also easier to manage and can be activated almost instantly.

b) Copper Wiring Charges

Businesses also do not have to pay extra for wiring, given that a VoIP network produces both voice and data using the same channel. If you are in the telecom services, you would know this by the name of a full duplex, which is the ability of a digital channel to send and receive data and voice simultaneously. Most VoIP networks use Ethernet to facilitate this conversion.

Power of Ethernet or PoE connected to the VoIP enables business offices to use modular staff, which includes no changes to the already established electrical wiring. Another benefit it offers to the office staff is that professional VoIP services are also available as applications on smart devices.

c) Calling Expenses

When it comes to calling expenses, VoIP services are also cheaper compared to analog services or PSTN Public Switched Telephone Network. This is because it has no data carriage cost that benefits most small and big businesses. According to stats, small businesses reduce their company’s bills by up to 60% on domestic and international calls with a VoIP network.

d) Recurring Expenses

VoIP networks also save up a lot of the miscellaneous ongoing expenses like taxes, repairs, and maintenance fees. Usually, VoIP service providers have subscription plans that charge for combined services with appealing proposals, facilitating businesses, especially startups and growing businesses.

Indirect Cost Savings

Indirect costs are usually challenging to quantify in comparison with the direct costs. However, they are equally critical for your business operation and its running cost. Here are some ways VoIP networks help big and small companies save money in the long term.

a) Savings with Remote Work

When it comes to VoIP networks, it lets the employees stay connected to the corporate system, even when they are working remotely. This is because they have advanced features like auto attendance, video calls, conference calls, and call waiting, which may not be available in traditional phones. In return, it helps employees with better productivity without consuming unnecessary space in the office.

b) Add-On Features at No Extra Cost

Well, most people argue that call transfer and group ringing facilities are also available with traditional PBX networks, so what makes VoIP better? In this sense, these functionalities with traditional PBX networks are not inherently available and come with separate payments. In comparison, VoIP networks have these features available without having the businesses pay extra.

c) Repurposed Manpower

VoIP network’s auto attendant function is a great help for anyone whose business requires a secretary to handle text messages and phone calls. It eliminates the need for a middleman and the respective money, which can go up to $45,000 per year (an overwhelming amount for startups). Also, it is just a click away, so you won’t have to worry about onboarding new staff.

2. Increased Accessibility

Another benefit small and big businesses get with VoIP networks is their high accessibility, all credited to their cloud-based service that allows the office staff to work from anywhere, anytime. So, if you have a working internet while traveling, a VoIP network allows you to make and receive calls. Also, if you are unable to attend calls for whatever reason, it allows you to direct it to another person or turn it to voicemail.

It improves business flexibility and helps you with remote accessibility, irrespective of the location. Therefore, to run a business on trips, you don’t have to bring anything other than a smartphone application. According to the State of Work Productivity Report, 65% of employees enjoy a boost in productivity with a cellular VoIP network.

3. Complete Portability

Moreover, with a VoIP network, you enjoy complete portability. For instance, your business is available on a softphone application, which is accessible through your phone number, making it convenient wherever you go. For office staff who frequently travel, this is a great help from a VoIP service.

4. Higher Scalability

Similarly, scalability is yet another benefit small and big businesses enjoy with a VoIP network. In a true sense, it means the VoIP network has prospects to grow as the businesses expand, making them a one-time investment in comparison with traditional analog services. So, whether it is opening a new branch office or preparing for a spike in your mass production during the holiday season, you do not have to worry about buying expensive hardware or amending the electrical lines to go with your call connection.

5. Advanced Features for Small and Large Teams

Another most-talked advantage of a VoIP connection is its ability to assist one person, small startups, or large teams alike. With advanced features like call transferring, auto attendant, one-person operations (represented by a larger company), or a bigger organization, working feels more approachable than a traditional setup.

VoIP Advantages And Disadvantages

For instance, the auto attendant function helps you seem like you are larger than it actually is. So, you can be a sole proprietor and sound like a company with several departments. Similarly, it allows multi-party calls and conference calls, making it suitable for businesses of any sort to enable several people to join simultaneously.

6. Clearer Voice Quality

When it was first launched in the market, the VoIP network experienced criticism for its poor voice quality and recurring latency. Today, it has improved significantly, and you won’t experience any issues with the audio quality as long as there is a stable and consistent internet connection. Now, VoIP networks offer a crisp and clear voice quality with almost negligible latency or call dropout issues, even with conference and multi-party calls, so you can focus on the agenda instead of the recurring interruptions.

  • Note: The key to a crispy voice quality is a robust internet connection. So, please note that you have an active connection while using VoIP networks. You can also pair it up with advanced solutions like noise-canceling microphones, advanced audio compression functionality, and microphones to get a better sound quality.

7. Supports Multitasking

In addition to traditional conference calls and phone calls, VoIP networks also have the functionality to send images, videos, and documents, even while enjoying a conversation. So, you do not have to hold a meeting while sharing reference files with the teams and clients. Thus, enjoying integrated meetings from all across the globe is no issue.

8. More Flexibility with Softphones

Flexibility is yet another advantage that makes VoIP networks preferable by businesses, small or big. In comparison with hardware devices, softphones are the smart programs installed on smart devices like computers, tablets, and phones. Recently, most service providers have also come up with tailored applications for your businesses.

Hence, with a modern VoIP network, you get manifold benefits like freed desk space, minimal equipment cost, greater portability, and a constantly integrated workforce. This softphone flexibility also helps remote teams support their work style without having to pay extra money for a subscription.

9. Increased Security

When it comes to security, businesses are extremely particular about it and do not think twice before paying extra for the added safety. Especially phone setup security is a grave concern for growing startups, which is also why PII or personally identifiable information is preferred among businesses. Most of it is because most frauds trick the office staff through scam phone calls, known as social engineering.

VoIP networks have eliminated these security concerns by leveraging innovative functionalities like encryption and identity management in the IP technology. The VoIP providers use advanced algorithms to protect their networks. Therefore, with such an advanced security setup, you get independent safety audits, strong passwords, automated alerts, and alarms for questionable or potentially fraudulent calls.

  • Pro Tip: It is always advised by professionals that businesses frequently update their operating systems. It helps them reduce the risk of vulnerabilities and recurring security attacks.

VoIP Disadvantages

With advantages, VoIP also has certain disadvantages that cannot be exempted from the picture. So, here are some downsides you may experience with a VoIP setup in your office.

1. Reliable Internet Connection Required

The first thing to consider when using the VoIP network is that it is as good as your internet connection. So, let us say your network has a low bandwidth; the service will suffer and provide you with due latency. Though VoIP networks do not use as much bandwidth as usual, it is still essential that your device has a proper network.

  • Note: It is advised that each smart device connected in a VoIP setup should have at least a 100 Kbps speed for a better connection. To have better stability and low latency, you must have a 70ms internet speed.


When it comes to internet-based digital technology, issues like latency and jitter are inevitable. It works by breaking down the data (documents, audio, video, etc.) into small bits known as data packets. It then gets reassembled to the intended destination and gets generated as an original message.

Now, when these packets of data experience delays in transmission and reassembly, the person on the front end experiences latency. It is caused by multiple issues, including poor internet connection, higher traffic, etc. Here are some reasons why jitter may occur while you are working on a VoIP network.

  • A VoIP network requires a higher bandwidth than usual surfing. So, a poor internet connection means you will have issues with the signal, resulting in recurring latency.

  • You need a VoIP router to run the service smoothly. If the router is not specially configured to the prioritization of your data packets, it may result in losing voice quality and jittering.

  • If your VoIP network is using Ethernet cables, not using the right power level category can also end up with you experiencing latency and jittering. Typically, VoIP networks use Cat-5e Ethernet cable to facilitate the speed of a cellular network.

Relies on Internet Access

As discussed above, a reliable internet connection is the key to achieving the full potential of a VoIP service. So, it would help if you have a consistent and reliable internet connection with the required bandwidth speed. Moreover, you also need to take the number of concurrent calls into consideration to determine what bandwidth is required for each company’s setup.

Emergency Situations

Another area where the VoIP network might lack is location tracking, as it impacts the portability and accessibility of your setup. With VoIP, it is challenging for third parties to determine from where a call originates, as the call is coming from an IP address and not the GPS data or cell tower information. Though you may not want this information, it certainly becomes a problem for emergency services like fire brigades or rescue services.

  • Note: Most emergency service providers can overcome this challenge by updating their E911 information. It helps public safety officials identify your exact location.

Security Issues

The final reason why some companies feel hesitant towards VoIP services is security concerns. Modern VoIP networks come with potential threats like service threats, viruses, malware, call tempering, internet spam, identity theft, phishing, and even service attacks. However, the good thing is that it can be solved with the improved IP architecture, like end-to-end encryption or better identity management so that the office staff feel secure and learn how to protect their information while using a VoIP network.

Types of Connections Best for VoIP

Now, when it comes to the VoIP system, you need to consider the right type of connection that will work best with the setup. Here are some popular connections that work best for VoIP phone systems.

  • Fiber internet

  • Cable internet

  • DSL internet

  • 5G cellular internet

  • LTE cellular internet

Here are some options that do not work with VoIP phone systems.

  • Satellite internet

  • Dial-up internet

Do note that the bandwidth of the internet you are using depends on the number of concurrent calls you will be making. The best way to determine this is the bandwidth test that is done by professional services on your current network.

benefits of voip


What is a VoIP phone system?

Simply put, a VoIP phone system is a software-based telephone that uses digital voice over internet protocol. It uses an IP network to send and receive phone calls. It is better than analog services in the sense that it is cost-efficient, portable, and effective for remote teams.

How does mobile VoIP work?

Mobile VoIP phone systems work by breaking down the data into small bits called data packets. Then, these data packets are compressed and transmitted to the destination using a cellular internet signal. The receiving end has a user that gets the decompressed data into a voice file.

What is a VoIP software phone?

VoIP, also known as Voice over Internet Protocol, is a digital technology that enables callers to leverage wireless technology to make and receive calls online. It helps them with cost-efficiency and productivity. For instance, WhatsApp can technically be considered a VoIP call, as it uses an internet connection to make or receive calls.

Final Thoughts

VoIP is getting popular as more and more businesses are expanding and turning to cost-effective alternatives. However, a few startups still feel hesitant towards them because of the grave security issues and latency. I hope this guide has been a help for anyone who is confused about whether to change their traditional analog system to a digital VoIP phone system.