VoIP vs. Landline: Complete Cost and Features Comparison 2025
VoIP saves 30–60% compared to landlines and offers modern features like video calls, mobile access, and text messaging. Landlines, however, are more reliable during power outages and better suited for areas with poor internet.
Quick Overview:
- VoIP: Works over the internet, costs $20–$40/month, includes advanced features like call forwarding, video conferencing, and remote access.
- Landlines: Use physical cables, cost $50+/month, reliable during outages but limited to voice calls and tied to a physical location.
Comparison Table:
| Feature | VoIP | Landline |
|---|---|---|
| Setup Costs | Low ($100–$500) | High (up to $1,000+) |
| Monthly Costs | $20–$40/user | $50+/line |
| Long-Distance Calls | Included/Discounted | Charged per minute |
| Features | Advanced (video, SMS, CRM integration) | Basic (voice only) |
| Reliability | Internet-dependent | Works during outages |
| Scalability | Easy (software-based) | Hard (requires wiring) |
| Mobility | Global access | Tied to location |
If you prioritize cost savings, flexibility, and features, VoIP is the better choice. For reliability and simplicity in emergencies, landlines are still useful, especially in areas with unstable internet.
VoIP vs Landline (& The Key Differences)
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VoIP and Landline Systems Explained
Understanding the basics of VoIP and landline systems can help you decide which option fits your needs. While both are designed to connect calls, the way they work couldn't be more different. These differences shape the unique benefits each system offers.
What is VoIP?
VoIP, or Voice over Internet Protocol, allows you to make phone calls using the internet. It works by converting your voice into digital data packets that travel through your internet connection.
"VoIP services convert your voice into a digital signal that travels over the Internet. If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination." - Federal Communications Commission
Since its introduction in the 1990s, VoIP has grown in popularity, thanks to faster and more reliable internet connections. Today, over 30% of U.S. companies use VoIP systems. Calls can be made directly from a computer, through a specialized VoIP phone, or by using a traditional phone connected to a VoIP adapter. The best part? VoIP lets you make calls from almost anywhere with internet access.
Tina Liu, a former senior product marketing manager at 8x8, simplifies it:
"With VoIP, voice data is sent [via an Internet connection] in digital form rather than plugging into a traditional phone jack like you would over the public switched telephone network"
Because VoIP is internet-based, it eliminates the location restrictions tied to landlines, offering flexibility for businesses and individuals alike.
While VoIP offers digital convenience, landlines remain a symbol of old-school reliability.
What is a Landline?
Landlines operate through the Public Switched Telephone Network (PSTN), using copper wires to transmit voice calls. These wires convert sound into electrical signals that travel through physical connections.
One of the key strengths of landlines is their independence from the internet. They use a separate power supply, which means they often work during power outages when other systems fail. This reliability is one reason landlines were a household staple for decades. However, by 2022, only about 29% of U.S. adults lived in homes with a landline, a sharp drop from over 90% in 2004.
Landline infrastructure relies on extensive networks of copper wiring and switching equipment. While this ensures dependable performance, it also means that most telecom providers no longer invest in maintaining or upgrading these systems. Adding or removing landline service often requires physical adjustments to your location's wiring, making it less flexible and more time-consuming than VoIP.
Despite their decline in residential use, landlines remain essential in many business settings where reliability and security are critical. Their physical connections are less vulnerable to cyberattacks compared to internet-based systems.
These core differences between VoIP and landlines impact everything from costs to features, shaping how each system fits into your communication strategy and budget.
Cost Comparison
When deciding between VoIP and landlines, cost is often a key factor for both individuals and businesses looking for affordable communication solutions. Expenses to consider include setup fees, ongoing charges, and any hidden costs.
Setup Costs
VoIP systems typically have low upfront costs. Many providers offer cloud-based solutions, which eliminate the need for extensive hardware installations. As ClearlyIP puts it:
"VoIP systems usually require minimal initial set-up, with many services offering cloud-based solutions that eliminate the need for extensive hardware installations."
A professional VoIP setup can range from $100 to $500, depending on the complexity of the system. However, many providers waive setup fees if you commit to an annual plan. Basic VoIP-compatible phones start at around $35, while higher-end models can cost up to $300. On average, quality IP phones cost between $50 and $300 per unit, and premium headsets can add another $20 to $200 to your total investment.
On the other hand, traditional landlines come with significantly higher installation costs. Setting up a landline system often requires hardware like desk phones, PBX systems, and professional wiring, with total expenses sometimes reaching thousands of dollars.
Once the systems are set up, the differences in ongoing costs become even more apparent.
Monthly and Ongoing Costs
VoIP services generally cost between $20 and $40 per user per month, with discounts available for annual billing. For example, OpenPhone offers a basic plan starting at $15 per user per month when billed annually.
In contrast, landlines usually have higher monthly fees, often exceeding $50 per line, with additional charges for long-distance calls. These variable costs can make budgeting unpredictable, particularly as call volumes increase.
Here's a quick comparison of costs between the two systems:
| Category | VoIP System | Traditional Landline |
|---|---|---|
| Setup Costs | Low - minimal hardware, often plug-and-play | High - requires wiring, PBX, and professional installation |
| Monthly Service Fee | $20–$40 per user (flat rate) | $50+ per line, plus long-distance charges |
| Long-Distance Calling | Usually included or free | Charged per minute or by zone |
| International Calls | Discounted or included | Typically expensive |
| Maintenance | Minimal - handled by the provider | High - may need on-site technical support |
| Feature Add-Ons | Generally included (e.g., voicemail, call routing) | Often requires extra fees |
VoIP systems are especially cost-effective for international calls, slashing costs by up to 90%. Rates for popular destinations usually range from $0.01 to $0.05 per minute, though less common locations can cost up to $2 per minute.
Hidden fees are another factor to consider. VoIP services are subject to federal, state, and local taxes, with the average combined tax rate on taxable voice services around 26.8%. Landlines, on the other hand, often include regulatory surcharges and other variable fees.
Overall, VoIP systems can deliver 30–60% savings compared to traditional landlines. This cost efficiency is a major reason why 31% of businesses have adopted VoIP to cut expenses and improve productivity. To make an informed decision, request detailed, itemized quotes to compare costs line by line.
Next, we'll explore the key features that set these systems apart.
Feature Comparison
VoIP and landlines both support basic calling, but VoIP brings a host of additional features designed to meet the demands of modern communication.
Basic Features
Landlines cover the basics: voice calls, simple voicemail, and caller ID. That's about it.
VoIP, on the other hand, goes far beyond. It includes features like voicemail-to-email, mobile integration, video calling, screen sharing, and instant messaging. For instance, VoIP systems allow you to switch a voice call to a video conference or share documents seamlessly during a call. Landlines, being limited to voice-only communication, simply can't compete in this area.
Another standout feature of VoIP is the ability to send and receive SMS and MMS messages using your business phone number - something landlines can't do.
What really sets VoIP apart is its integration with Unified Communications as a Service (UCaaS) platforms. This means you can access tools like video conferencing, screen sharing, and instant messaging all in one place, streamlining communication and collaboration for businesses.
But VoIP doesn't stop at the basics - it also offers advanced tools that can transform how businesses operate.
Advanced Features
VoIP systems take communication to the next level with advanced features like auto-attendants, interactive voice response (IVR), call recording, call queues, and call forwarding.
- Call recording is useful for maintaining quality standards and training purposes.
- Call queues help manage high call volumes by organizing incoming calls with hold music or announcements.
- Call forwarding ensures you never miss important calls, no matter where you are. While landlines offer some of these features, they're often limited in functionality.
VoIP also integrates seamlessly with tools like CRM software, email, and calendars. For example, when a customer calls, their details can pop up automatically, and call logs can sync with your business records, boosting efficiency and keeping everything in one place.
When it comes to security, VoIP outshines landlines by using encryption protocols like TLS and SRTP to protect call data. Analog landlines, by contrast, offer no such safeguards.
Another major advantage of VoIP is mobility. Employees can make and receive calls from anywhere with an internet connection, using the same business phone number and accessing all the system's features. Landlines, tied to physical locations, lack this flexibility - a significant drawback in today's era of remote work.
Here's a quick comparison of key functionalities:
| Functionality | VoIP Systems | Landline Systems |
|---|---|---|
| Basic Calling | Yes | Yes |
| Video Conferencing | Yes | No |
| Mobile Integration | Yes | No |
| SMS/MMS Texting | Yes | No |
| CRM Integration | Yes | No |
| Call Encryption | Yes (TLS & SRTP) | No |
| Auto-attendant | Yes | No |
| Call Recording | Yes | Limited |
| Remote Access | Yes | No |
Scalability and Setup
VoIP systems are designed to grow with your business. Adding new users, features, or locations is usually as simple as updating software settings. With landlines, expansion often requires physical installation and additional hardware, making it far less convenient.
The setup process is another area where VoIP wins. Most VoIP services can be up and running quickly - often with just an IP phone or a desktop app download. In contrast, landlines typically require technician visits, wiring, and more time-consuming installations. These differences become even more pronounced when businesses expand or relocate.
With such an extensive feature set, it's no wonder the global VoIP industry is projected to hit $472 billion by 2033.
Usability and Reliability
When deciding between VoIP and landlines, it's important to understand how each system performs in everyday situations. Both options have their own strengths and weaknesses, which can significantly influence your communication experience.
Call Quality and Reliability
Landlines are known for their consistent call quality, thanks to their dedicated infrastructure. On the other hand, VoIP relies on a strong and stable internet connection. With a high-speed connection, VoIP can deliver exceptional clarity, even surpassing landline quality, by using wideband audio codecs for high-definition sound. As business technologist Joe Manna puts it:
"With a reliable, high-speed internet connection, the audio quality is often indistinguishable from that of a landline."
However, VoIP's performance can falter under poor network conditions. Issues like jitter, packet loss, and delay can disrupt call clarity. Former tech support specialist Adam Moffett explains:
"The issues with voice are never caused by 'speed' as such. They're packet loss, delay, and jitter."
Here's a quick look at the recommended internet speeds for VoIP based on the number of active calls:
| Concurrent Calls | Recommended Speeds |
|---|---|
| 1–3 | 3 Mbps Up & Down |
| 5 | 5 Mbps Up & Down |
| 10 | 5–10 Mbps Up & Down |
To get the best VoIP experience, it's worth investing in business-grade routers, using wired Ethernet connections instead of Wi-Fi, and setting up Quality of Service (QoS) to prioritize VoIP traffic.
Another key difference is how these systems handle power outages. Landlines remain functional during outages, while VoIP relies on electricity and internet connectivity. For businesses, downtime can be expensive, with losses ranging from $8,000 to $74,000 per hour during interruptions. Severe weather-related outages in the U.S. have also doubled over the last two decades. To minimize risks, many businesses use uninterruptible power systems (UPS), backup internet connections, and automatic call forwarding to mobile devices. Providers like Nextiva even offer service uptimes of 99.999%, rivaling traditional systems in reliability.
This technical foundation sets the stage for VoIP's standout features: portability and remote access.
Portability and Remote Access
One of VoIP's biggest advantages is its flexibility. Unlike landlines, which are tied to a specific location, VoIP allows you to make and receive calls from anywhere with an internet connection. Whether you're working remotely, traveling, or managing multiple offices, VoIP keeps you seamlessly connected. It also works across various devices - computers, tablets, smartphones, and dedicated IP phones - making it easy for employees to switch between devices while keeping the same business number.
Another major perk is scalability. Adding users, features, or even new locations usually requires only a software update, avoiding the costs of physical installations. Many providers also offer easy number portability for smooth transitions when switching services. Plus, advanced disaster recovery features, like automatic call rerouting during network disruptions, help ensure minimal downtime.
When it comes to security, landlines don't offer any form of data protection. VoIP, however, uses encryption protocols to safeguard call data. Since VoIP operates over the public internet, it's essential to choose a provider with strong security measures in place.
Best Choice for Home and Business Users
When deciding between VoIP and landlines, it all comes down to your needs, budget, and priorities. Communication habits have changed significantly - 59.2% of U.S. households now rely entirely on wireless services, just 6.5% stick solely to landlines, and 40% use a mix of landline and wireless options. Let's dive into how these systems cater to the demands of both home and business users.
VoIP for Home and Business
VoIP stands out for its affordability and advanced features, making it a strong contender, especially for remote work and modern communication needs. Approximately 31% of businesses have adopted VoIP due to its ability to enhance productivity while keeping costs low. For home users, VoIP plans can cost under $20 per line, which is notably cheaper than traditional landline services.
One major advantage of VoIP is its flexibility. Cloud-based VoIP systems allow you to easily add users, features, or even new locations through software updates. In contrast, expanding a landline setup often involves expensive hardware upgrades and on-site installations. Beyond basic calling, VoIP offers features like video conferencing, auto-attendants, call analytics, and integration with tools like CRM software, email, and calendars. These capabilities are especially appealing for businesses navigating hybrid work models or scaling operations.
While VoIP delivers modern features and cost savings, some users still value the traditional dependability of landlines.
Landline for Home and Business
Even in an increasingly digital world, landlines hold their ground among certain users. Many small businesses in the U.S. continue to rely on landlines for their unmatched reliability, viewing them as critical to their operations.
The biggest strength of landlines is their dependability. As Valley Telecom explains:
"One of the biggest advantages of landline phone service is its reliability. Unlike mobile phones, landlines are not affected by network congestion or dead zones. Additionally, in case of power outages, a landline phone can still be used, as long as the phone line is functioning properly."
This reliability is particularly valuable in areas with inconsistent internet access or for users who prefer simplicity over the advanced features VoIP offers. Landlines also have an edge in emergency situations, as they automatically provide location information to emergency services without requiring updated E-911 details.
For those concerned about security, landlines offer a layer of protection against hacking and digital threats because they operate on a dedicated, isolated infrastructure. Businesses in more traditional industries - or those serving customers who expect landline accessibility - may find it strategically important to maintain this service. However, landlines come with higher installation costs and lack the scalability that growing companies might need.
Skype Alternatives for VoIP Calling
With Microsoft planning to shut down Skype on May 5, 2025, many users are searching for reliable VoIP alternatives. While Microsoft Teams is available, it may lack the straightforward phone-calling features that some users need. Below, we explore cost-effective VoIP services that cater to both personal and business users.
Google Voice is a popular choice, offering free calling and texting within the U.S. and Canada, though it comes with a $20 porting fee and is only available to users in the U.S. If you're looking for an affordable option, MagicJack provides a U.S. number with unlimited calling and texting across North America for just $5 per month. For those needing international coverage, Quicktalk offers a plan at $9 per month, including one phone number and unlimited calling and texting to 36 countries - a great option for global communication.
For businesses, Zoom Phone stands out with its enterprise-grade reliability. Plans start at $10 per month for U.S. and Canada metered service, $15 per month for unlimited domestic calling, and $20 per month for the Pro Global Select plan, which includes international options. Forbes Advisor highlights its value, stating:
"A user-friendly and affordable phone system with solid routing and AI features, Zoom Phone is a great value overall."
For teams seeking advanced communication tools, RingCentral is a premium option starting at $30 per user. According to Forbes Advisor:
"Bundling a feature‑rich phone system with chat and AI video meetings, RingCentral is a pricey but strong option for team collaboration and customer service."
Another affordable alternative is iPlum, which offers a secure mobile line for $8.99 per month (billed annually). This plan includes a U.S. or Canadian number with unlimited calling and SMS.
One important consideration: many VoIP services may not reliably support two-factor authentication texts, which could limit their compatibility with certain online services.
For a deeper dive into secure messaging, international calling, video conferencing, and team collaboration tools, check out resources on Skype alternatives. Whether you need a basic calling solution or a comprehensive business communication system, understanding your specific needs - like voice calls, number portability, and messaging features - will help you make the right choice.
Conclusion
When comparing VoIP to traditional landline systems, VoIP stands out as the better choice for most homes and businesses in 2025. The cost savings alone are impressive - businesses can typically cut their phone expenses by 30%–50% by using VoIP with an existing internet connection instead of sticking with traditional plans. Take GreenTech Logistics, for instance: they slashed their monthly phone bill from $1,200 to just $350. Similarly, Luna Travel Co. reduced their costs from $1,800 to $600 after making the switch.
Beyond affordability, VoIP delivers far more value through its advanced features. These capabilities go well beyond the basic functions of landlines and have become even more essential as remote work continues to shape how businesses operate.
VoIP also wins when it comes to setup and scalability. Traditional landlines often come with installation fees ranging from $150–$350, not to mention the hassle of physical infrastructure. By contrast, VoIP systems require minimal hardware and can scale effortlessly as your needs grow. This flexibility makes it an attractive option for businesses looking to adapt quickly without breaking the bank. That said, reliability remains a key consideration for any communication system.
Landlines, however, still have their place. In areas with limited or unreliable internet access, landlines offer a dependable alternative since they don't rely on broadband connectivity. For those in rural locations or anyone who needs a fail-safe during internet outages, keeping a landline as a backup can be a practical choice.
FAQs
How reliable is VoIP compared to landlines during power outages or internet issues?
VoIP systems rely on two key things to operate: a stable internet connection and electricity. If either of these goes down - say during a power outage or an internet disruption - your VoIP service won't work. That means no calls in or out until both are restored.
In contrast, traditional landlines are powered directly through the phone line itself, so they continue working even during a power outage. This makes landlines a more reliable choice in emergencies when electricity or internet access isn't available.
How much can businesses save by switching from landlines to VoIP systems?
Switching from traditional landlines to VoIP systems can slash business communication costs by 40% to 75%. This dramatic reduction comes from lower monthly phone bills and more affordable rates for both local and international calls.
With VoIP, you can also say goodbye to pricey hardware and dedicated infrastructure, which means setup and maintenance costs drop significantly. On top of the savings, VoIP brings advanced tools like video conferencing and call management features, boosting efficiency without tacking on extra expenses. It's a cost-effective and adaptable option for today's business needs.
Can VoIP systems work with tools like CRM software, and what are the advantages?
VoIP systems work effortlessly with tools like CRM software, offering some standout advantages. One major perk is automatic call logging and real-time data updates. This means every customer interaction gets recorded directly in the CRM, saving time and keeping customer records accurate and well-organized.
Another benefit is how these integrations boost productivity. Features like click-to-call let employees make calls straight from the CRM interface, eliminating the need to juggle multiple apps. This simplifies workflows and helps teams work more efficiently. Plus, having instant access to customer profiles during calls allows for a more tailored and engaging customer service experience, which can translate to happier, more satisfied customers.
