Table of contents
Table of contents
Table of contents

Poor communication service can harm your company’s reputation, turnover, and ability to meet customer needs. VoIP and virtual phone systems are smart ways to avoid these issues.

VoIP technology and virtual phone systems both provide reliable, secure, and cost-effective call center solutions that improve overall business communication.

In this article, we’ll explore the key differences between VoIP vs. virtual phone systems and discover how they benefit businesses.

Let us start with the definitions and compare (VoIP) voice-over-internet protocol and virtual phone systems.

🔑 Key Highlights
  • VoIP and virtual phones are much more affordable than traditional landline phone systems.
  • The backbone of VoIP setup is a reliable internet connection. Better use a direct Ethernet connection for a high-speed, stable connection to ensure smooth voice transmission without lags or disruptions.
  • VoIP phone technology tends to have an edge over virtual phone systems in the features department with advanced capabilities.

What is Virtual Over Internet Protocol?

VoIP (Voice over Internet Protocol) is the modern communication technology and telecommunication system that transfers your voice using Internet connectivity to the users from one end to the other end devices. The technology is also known as IP telephony, internet calling, or voice-over-IP.

Rather than using a traditional telephone line for communication, VoIP technology makes and receives calls via a broadband Internet connection. Voice over IP (VoIP) translates human speech and audio signals into digital data for Internet transmission.

By upgrading traditional landlines to VoIP, call centers around the world are able to run more efficiently. WhatsApp, Facebook Messenger, and Skype are popular VoIP services and software apps for video or VoIP calls.

What is a Virtual Phone System?

A virtual phone system can be defined as a cloud-based communication system. Compared to a traditional landline communication system, it uses Internet networks and cloud technology to make and receive calls.

One key advantage of a virtual phone system is its flexibility. It allows you to make virtual calls from various devices, such as mobile phones, tablets, desk phones, or even softphone apps. The best part is that all these calls can be made using a single business phone number.

With a virtual phone system, inbound calls can be forwarded to various phone numbers. This allows for more flexibility and prevents missed calls. Virtual phone numbers enable businesses to boost productivity and grow their teams.

For security, several data centers use redundancy mechanisms in addition to Service Level Agreements (SLAs) that guarantee their availability.  These phone systems also enable much more efficient handling of outgoing calls. This is, in large part, due to CRM integration and adjustable dialing speeds.

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Comparison between traditional phone systems and virtual phone systems

Generally, virtual phone systems are a more modern and cost-effective solution for most businesses. They offer greater flexibility, scalability, and features as compared to traditional phone systems. Here’s the comparison in the table below:

Traditional phone systems Virtual phone systems
Use landlines and a private branch exchange (PBX) on-site Uses voice over internet protocol(VoIP) and cloud-based servers
Complex requires a technician, and it is expensive during the installation or removal process while scaling. A simple process for scaling up or down by adding or removing users through software
Limited to desk phones or traditional phone devices. It can be used on various devices like smartphones, computers, and desk phones
Higher upfront cost for hardware and installation Lower upfront cost, typically pay-as-you-go monthly subscription
Requires IT staff or a service provider to maintain on-site equipment Maintenance is handled by the virtual phone system provider
Reliant on landline infrastructure, can be affected by power outages Reliant on an internet connection, outages can disrupt service

What are the benefits of using VoIP system

When considering a VoIP setup for your communication needs, ensure VoIP installation can benefit you and your business. 

Here’s a look at the key advantages of using the VoIP phone system:

1) Flexibility

VoIP offers unparalleled flexibility, allowing users to make and receive desired calls from anywhere with an internet connection. Whether at the office, working remotely, or traveling, your VoIP phone setup ensures seamless communication without boundaries.

2) Cost-effectiveness

Embracing VoIP is a budget-friendly move. Traditional phone systems often involve costly hardware and maintenance. In contrast, VoIP setup requires minimal physical infrastructure, reducing upfront costs. 

3) Scalability

Once you’ve completed your VoIP setup, these systems grow with your business. Whether you’re a small startup or a large enterprise, VoIP installation allows easy scalability. You can add or remove lines effortlessly, adapting your communication network to match your organization’s changing needs.

4) Reliability

VoIP systems are renowned for their reliability. With advanced features like call forwarding and automatic rerouting during outages, a VoIP setup ensures continuous communication. 

5) Improved customer satisfaction and experience

In addition to skills-based routing, speech analytics, voice authentication, voice recognition, and call recording. VoIP solutions include Interactive Voice Response (IVR), Automatic Call Distribution (ACD), Call Recording, and Chat. 

Agents can communicate with customers more effectively by using these features to personalize their conversations and messages and provide a better customer experience. 

Using this cloud-based technology, contact centers and call centers can integrate unified communications into their call operations. Furthermore, call center agents can interact with customers through email, SMS, instant messaging, and other web-based communication methods.

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VoIP vs Virtual phone systems for your business needs

VoIP and virtual phone systems are beneficial calling solutions that help your business run smoothly. As long as there’s an internet connection, they can significantly optimize calling capabilities. 

VoIP’s unified communication capabilities allow users to collaborate easily via video or chat. Virtual phone systems provide a more affordable alternative to VoIP but with limited features.

Let’s explore critical aspects of VoIP and virtual phone systems to see which best suits your business in the table below:

Key Aspects  VoIP Virtual phone system
Cost VoIP can cost more per user than virtual phone systems. But it can also completely replace your existing phone services. Virtual phone systems have lower costs per user than VoIP. Adding a second virtual line using a VoIP virtual provider can sometimes be more cost-effective than your current landline service.
Call Quality VoIP primarily depends on the quality of your internet connection. VoIP may not be suitable for your business if your connection is unstable.  Virtual phone systems operate using existing phone lines and service networks you’re already using. This means you’re less likely to see a change in the quality of your calls. 
Call Features VoIP services offer more call handling and management options, including auto attendants, call forwarding, queues, call screening, and more.  Virtual phones offer fewer call management features, can handle low call volumes, and lack advanced communication features like team messaging, video conferencing, and file sharing.
Reliability VoIP calls are entirely dependent on your internet connection. If your internet connection is weak and your bandwidth is too low, your calls will be of poor quality, which affects your reliability.  Virtual phones are typically considered more reliable because data centers are part of the transmission process, but this is not always true.
Scalability VoIP is also preferable if you already have existing hardware because most VoIP services are compatible with various IP devices. Virtual phones are best suited for businesses with an existing landline or cell plan.

Conclusion

Overall, VoIP and  Virtual phone systems offer many benefits. Both systems are also preferable to traditional landlines. But how do you know which one is better? When it comes to VoIP vs. virtual phone systems, it truly depends on your business needs. 

VoIP is better suited for teams replacing traditional in-office phone lines with centralized business communications platforms. However, a virtual phone system is cost-effective for small teams or individuals wanting a portable business phone number.

Join Dialaxy to increase your call center’s productivity or fulfill your business’s advanced communication needs. Our cloud-based contact center solution can eliminate the need for expensive hardware and help your organization communicate more effectively and be more productive.

FAQs

Can users use VoIP for free?

Yes, To some degree, many free VoIP software and applications allow you to make and receive calls over the Internet—for example, WhatsApp, Facebook Messenger, Google Duo, etc.

How do you set up a virtual phone system?

The following are four easy steps you can follow to set up a virtual phone system:

Step 1: Choose your business phone pricing plan.

Step 2: Then, assign virtual phone numbers.

Step 3: Record your greetings as you desire

Step 4: Start making and receiving calls.

Can you make international calls with a VoIP or virtual phone system?

Yes, VoIP services or virtual phone systems allow users to make international calls with the provided virtual number. However, they may need to enable this feature for each user and add credits to make international calls.

Prasanta Raut

Prasanta, founder and CEO of Dialaxy, is redefining SaaS with creativity and dedication. Focused on simplifying sales and support, he drives innovation to deliver exceptional value and shape a new era of business excellence.

Prasanta Raut

Prasanta, founder and CEO of Dialaxy, is redefining SaaS with creativity and dedication. Focused on simplifying sales and support, he drives innovation to deliver exceptional value and shape a new era of business excellence.