VOIP Vs Landline vs PBX: Phone Systems for New Businesses?

The Facts About Business VoIP versus Landline and Traditional PBX Systems

Not that many years ago, you would call your local telephone company and have them install landline phone service for your business that equaled a significant investment. Before 1984, most of the telephone system was under the control of AT&T, and your phone equipment was likely made by Western Electric, a subsidiary of AT&T. Court settlements in 1982 resulted in the divestiture of the largest monopoly that ever existed in America, changing the landscape of business and home telephones. Nowadays, with the advancement of high-speed internet, Voice Over Internet Protocol (VoIP) is the new standard for clear low-cost telephone services for businesses like yours. Here are some details to consider for VoIP, landline, and PBX phone systems for business.


Plain Old Telephone Service (POTS)

This is the regular landline system that used to be the most common way of getting telephone service. It has been around longer than electrical service to homes. This is why the poles outside lining the street are still called “telephone poles.” The wires are still there, but that gigantic infrastructure is fading fast and being replaced by internet-based and cellular telephony products and services. Land-based phone lines are quite expensive, and fewer subscribers are using them. AT&T just got a bill passed by the General Assembly to begin the process of ending this legacy telephone service in Illinois. Nationally, this service seems to be discouraged based on the exorbitant pricing charged for a legacy service.


Private Branch Exchange

This is the equipment that turns your business phone into a full-featured system. It used to require really big phones with mechanical buttons and a lot of square feet dedicated to the cables and control systems. Today’s systems are streamlined, state of the art, and reliant on software rather than any proprietary hardware. A small computer can run the entire phone system of a large corporation. It can operate your business voicemail, auto attendants, interactive voice response (IVR) systems, route calls based on customer menu selection and so much more. Asterisk, by Digium, is the open-source software behind most of the major corporate and government phone systems from small establishments to giant call centers worldwide. It is one example of why business Voice Over Internet telephony is so affordable in comparison to traditional POTS.


Voice Over Internet Protocol

This is telephone service over existing broadband internet connections. To get an idea of the power of this service, imagine your regular POTS lines coming into your business. They are literally physical pairs of wires for each telephone number. If you have five lines of service, you have 10 physical pairs of wires to connect each line. Using your business's high-speed internet service, you can have as many incoming and outgoing “lines” that you need. The system is also instantly scalable. If you need to add lines to make or take calls, there is no need to change the physical infrastructure of the wires coming into your business. For example, the old way of adding lines to initiate a customer support section to your small business required physically dropping new cables from the telephone poles to your business. Now, the new lines, or numbers, can be added instantly and even from a remote location with business-class reliability and call clarity.

The true power, scalability, reliability, and bottom-line savings on telecommunication costs go to VoIP. With the POTS phone lines being declared a legacy product, there really is no competition between the two. Voice over internet also allows you to have a full-featured PBX without the traditional huge investment in hardware as the functionality is now all software controlled.

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