Best for SMEs: A Guide to VoIP versus Fixed Calling Services

Running a successful SME relies a lot on having an effective phone system. Businesses today have the option of choosing between Voice over Internet Protocol (VOIP) or Fixed Calling Services (also known as landlines) to meet their day-to-day communication needs.

For decades, traditional fixed calling services have played a crucial role in enabling SMEs to facilitate both internal and external communication. These services have been instrumental in delivering customer service to customers and clients, facilitating the sales processes, and for day-to-day office admin, by supporting internal communication with colleagues. However, the advent of broadband and fibre technology has revolutionised the business landscape, including significantly improving communication and enabling the use of solutions like VoIP enterprise solutions. VoIP technology has emerged as an alternative communication solution for businesses, encompassing many of these features. This includes cost savings, increased accessibility and greater flexibility for businesses.

ltimately, both phone systems hold multiple benefits for SMEs. The one you choose will depend on multiple factors such as specific needs and characteristics of small businesses.

This guide looks at the pros and cons of VOIP and Fixed Calling Services; and provides practical insights and actionable advice for decision-making.

Fixed calling services 

Fixed calling services  refers to the traditional phone services that rely on physical copper wires or fibre optic cables to transmit voice calls. These services are typically provided by telecommunications companies and require a physical connection to a telephone network. Fixed calling services possess several distinct characteristics that are worth noting. Firstly, it’s tied to the physical location where the phone line is installed. Additionally, it has a specific area code attached to them.

In South Africa landline services are provided by Telkom. To set up a business landline service comes with monthly rental charges and call chargers. Businesses looking to install a fixed line service may encounter some challenges, firstly there is typically an installation cost that businesses must pay to lease a phone. Secondly, there may be a long wait for a technician to arrive and install the phone system. There are also hardware requirements, including landline phones, that connect directly to the telephone network.

While traditional phone systems are dropping in popularity as more people favour modern alternatives, they are still integral to the sales and customer support process. This is why it’s important to choose a system that suits your business. 

VoIP

A VoIP business phone system facilitates voice-based phone calls over the internet, as opposed to a traditional phone line connection.This innovative technology empowers businesses to harness voice phone service from any geographical location with an internet connection and compatible device (this could be a VOIP phone, desktop, tablet, or mobile phone). In addition, VoIP phone systems offer a range of advanced calling features that significantly enhance business communication. Users may be familiar with VoIP software and apps such as Skype, FaceTime, WhatsApp and Facebook Messenger which have altered personal communication.

In terms of use, VoIP uses virtual phone numbers that look and function in the same way as regular telephone numbers, with the major difference being that they’re assigned to a user, rather than a specific phone line. 

Ultimately, VoIP has the effect of leveling the playing field for small businesses, so that they can compete with large corporations and have the same opportunity for growth and success.

Fixed Calling Services are an important aspect of professional communication, and continue to provide businesses with a wide range of perks such as reliability and security, and can lend your business a professional image and credibility.

Security and reliability 

Landlines are connected via traditional telephone lines and are not affected by the quality of the internet. This makes them a favourable option for businesses with very slow internet speeds. Furthermore, phone lines are not susceptible to internet outages, which can result in disruptive downtime and potential loss of business. It’s however worth noting that landline outages can happen, often due to rough weather or cable theft. Incidents like these can leave your business without phone communications until the problem is fixed.

An additional benefit offered by traditional phones is security. Landlines are considered to be more secure than VoIP. This is attributed to the physical nature of landline connections, as they operate through dedicated telephone cables. To successfully compromise a system a hacker would need to physically intercept the copper wire or hardware. Landlines also can’t fall victim to remote attacks as easily as VoIP.

While regarded as “old technology”, landline phones continue to offer reliability and voice quality for businesses, and are of particular use for businesses in areas without good cell reception or reliable internet access.  

Professional image and credibility 

Having a traditional landline number can lend a measure of credibility to a business. While a mobile phone number is convenient for maintaining contact for your customers, a business phone number is another key element of creating a professional image for your business while also building a credible and trustworthy brand. 

Fixed calling services disadvantages

Landlines are however not without their disadvantages. Landlines are considered to be legacy infrastructure which means it is susceptible to dropped calls; other challenges are costly on-site installation and high maintenance fees.

Fixed Calling Services a set of standard features such as hold, mute and redial. Other key features include: 

Dedicated phone line – Each phone line has a dedicated number associated with it, allowing for direct communication with specific phone numbers.

Local and long-distance calls – Traditional landline services typically offer local and long-distance calling options, with different pricing structures for each.

Basic calling features – Fixed calling services provide standard calling features like call waiting, call forwarding, and voicemail.

VOIP offers SMEs much more than just the ability to make phone calls over the Internet. It can bring a range of benefits and advantages such as ease of use, cost savings, and reliability. 

Accessibility and mobility

With VOIP users are no longer limited to their desks. Wherever users can connect to the internet, they can make and receive phone calls, which means they are reachable anytime and anywhere. Users can do this through mobile apps and are able to connect to multiple devices (desktop phones, smartphones, etc.), or VoIP-enabled phones. Businesses moving premises are also able to keep their numbers with VOIP using a process called porting.

All this has positive implications for remote work. Employees working from home can maintain the same phone functionality as they would have at their office thanks to VoIP. Additionally, with no geographical limitations, employers can hire workers from a wider talent pool.

Collaboration and productivity

VOIP systems enable greater collaboration through a number of features such as conference calling, screen sharing, and instant messaging. These features make it easier for employees to collaborate and work together, even when they are not in the same location. To enhance productivity, the VoIP system can easily be integrated with other business tools such as customer relationship management (CRM) software and other productivity applications.

Scalability and flexibility

Modern workplaces require greater flexibility than ever to keep up with new trends and changes. ​​VoIP providers are highly scalable and allow businesses to easily adapt to changing needs, whether it’s location changes or to accommodate business growth and expansion. Businesses can easily add or remove phone lines, as well as integrating multiple locations and remote workers. 

Cost

VoIP has the capability of reducing all kinds of costs associated with maintenance and repairs, equipment, and phone charges, all while making requests for upgrades and support much simpler.

VoIP has a minimal capital outlay. Unlike a business landline which requires infrastructure and installation, VoIP eliminates the most costly hardware requirements.

VoIP disadvantages

Despite the multiple advantages outlined above, VoIP is not without its drawbacks. Users with low bandwidth and slow broadband speeds may experience significant lag issues, especially with video calls. 

VoIP systems are also susceptible to cyber-attacks, just like any network with a connection to the internet. This is significant as VoIP is required to adhere to Protection of Personal Information (PoPI). The law stipulates that all businesses must take measures to ensure the protection of the privacy of their customers. It’s therefore important for business owners to take the necessary precautions to protect their business’s communication systems safe from cyberattacks, this includes using antivirus programs, malware and using a VPN.

VoIP technology offers a range of features that enhance communication capabilities. Key features include: 

Advanced call management – advanced call management determines how incoming calls are handled. Using this functionality, you can choose whether to hold, block, or prioritise calls so that call quality is maintained. 

Auto-attendant – also known as a virtual receptionist who can answer phone calls, deliver recorded messages, direct calls and engage in a number of other useful services, all included in the VoIP packages.

Audio conferencing – VoIP conference calls connect two or more parties over an internet connection instead of using traditional carrier networks.

Business text messaging – make and receive text messages via the internet. 

Call analytics – Call analytics is a category of tools that measures individual and aggregate data related to incoming and outgoing calls. Call tracking includes inbound call volume, call time, hold time, speed of answer, and many more metrics.

Call forwarding – allows users to automatically take calls to the VoIP line and redirect them to another line of your choosing. It’s commonly used to redirect office calls to your cell phone while you are travelling or working in the field. 

Call queues – a call queue lets you handle incoming calls and places them in line to be answered when your team is busy with other calls.

Call recording – VoIP call recording automatically records and stores voice data, according to your settings. 

Call routing – allows customers and team members to reach an employee on their cell phone, computer, tablet—or any device with an internet connection—freeing workers from their landlines so they can do business in the field.

Extension dialling – extension dialling allows you to call a three or four digit number to connect with your colleague or agents. 

Voicemail and voicemail to email – this is a service that transcribes voicemails into emails. It’s important to understand that this is not a voice-to-text feature. 

Audio quality – with strong internet, VoIP delivers the best in stable and clear sound quality. It makes a great choice for businesses that depend heavily on phones for virtual conferencing, customer service, sales, and international calls.

When comparing the cost of VoIP versus fixed calling services (traditional telephone systems), several factors come into play. Here’s a breakdown of the cost implications for both options:

VOIP

The cost implications of Voice over Internet Protocol (VoIP) for businesses can vary depending on several factors. Here are some key cost considerations:

• Equipment – such as IP phones, routers, switches, and network upgrades. 
• Internet Bandwidth – Monthly costs for internet service. 
• Maintenance – Ongoing costs related to equipment maintenance, repairs, and software updates.
• Call charges – any additional charges associated with long-distance or international calls. 
• Subscription or licensing fees –  some VoIP services may require businesses to pay a monthly subscription fee or licensing fee per user. 

Fixed calling services

The cost considerations of fixed calling services include: 

• Installation costs – there may be initial equipment costs or installation fees.
• Hardware-  purchasing or renting telephone equipment. 
• Call charges – landline rates are often charged by the minute, with costs even higher for calls to cell phones and international numbers.
• Fixed monthly costs – recurring monthly fee, regardless of the amount of usage.