You’ve probably heard of VoIP, or Voice-over Internet Protocol, as an alternative to landline phones for personal and business use.

VoIP transfers sound as data using one of two protocol types: Session Initiation Protocol (SIP) or H.323. Unlike traditional phones, this method involves the movement of packets of information and introduces greater flexibility to voice communications.

What is VoIP?

The protocols supporting VoIP rely on high-speed Internet connections instead of telephone wires to transfer call data. Each time you make a VoIP call, data is sent over the Internet Protocol (IP) and decoded on the receiving end. Sound in these systems has improved significantly over the years, and is much clearer and more reliable than in early VoIP setups.

VoIP can be used with a desktop or mobile app, a headset, or a phone configured for VoIP technology. If you don’t want to upgrade to new hardware, you can get an analog telephone adapter (ATA) to convert a standard phone to VoIP. These three options make VoIP accessible to users around the world.

Reasons to Use VoIP

People choose VoIP for a variety of reasons, including:

  • Increased flexibility in communication.
  • Easier scalability for businesses.
  • Reliable phone service for frequent travel.
  • The desire to be free from a landline.

Personal vs. Business Use

Plans, pricing, and options differ between residential and business VoIP use. Personal plans tend to be more streamlined and offer a straightforward list of common features. Because of the standard nature of these plans, personal VoIP is usually cheaper than business VoIP.

Additional features and upgrades are offered in business plans to provide flexibility as companies grow. Business plans also provide more software and hardware options to meet the specific needs of diverse companies. These may include the ability to add additional numbers to a plan, fewer restrictions on unlimited calling, and the inclusion of international calling.

Pros/Cons of VoIP Use

Before deciding whether VoIP is the right option for you or your business, take a look at its advantages and drawbacks.

Pros

VoIP provides a range of special features beyond what traditional landline plans offer. In addition to common features like caller ID and call waiting, you can also get call transfer, call blocking, and voicemail. Business plans include even more options, such as call holding, call routing, and mobile apps.

Using VoIP costs less than regular phones, and may even be free if you stick with certain software options and don’t make international calls. Switching to business VoIP can save your company a lot of money every month while providing similar or better call service than your old communication network.

You can use VoIP software and phones to make calls from any location with a high-speed Internet connection, allowing people to reach you at the same number no matter where you travel without incurring roaming or long-distance charges. You’ll never miss a personal or business call if you have your VoIP phone with you.

Cons

Although relying on the Internet means VoIP doesn’t tether you to a phone line, it can also be a problem if you travel to a location with unreliable Internet connectivity or your power goes off at home. Traditional phones and cell phones are better options in these cases because you don’t have to worry about being completely disconnected from friends, family, or colleagues.

Security is one of the main concerns of VoIP systems. Digital information of any kind, including VoIP data, can be intercepted and manipulated by third parties. There are more points at which the security of conversations can be compromised than when using a traditional phone.

New VoIP equipment is required when making the switch from landlines, and the cost may be prohibitive for some companies. This can make it difficult to compete with other businesses already taking full advantage of the features VoIP has to offer.

Choosing the Best VoIP Software

Some VoIP options can be used from your personal computer or mobile device without the need for additional equipment:

  • Skype, a calling platform launched in 2003, starts at $2.95 per month for calls to the U.S. and Canada, and is free when calling from one Skype account to another.
  • Google Voice is free if you want to call within the U.S. and Canada, and specific per-minute international rates apply for other calls.
  • Vonage pricing starts at $9.95 per month for personal use and is one of the most popular VoIP options.

Software provides basic VoIP functionality but doesn’t include any hardware. If you want to use VoIP with a headset or traditional handset, you’ll either need to purchase one separately or search for a more comprehensive VoIP plan.

Finding a Reliable VoIP Provider

When you need a VoIP phone setup for your business, including hardware, you can try these providers:

  • RingCentral Office offers a wide variety of options, including unlimited conference calling, starting at $19.99 per month per user.
  • Jive Hosted VoIP puts your phone system in the cloud with plans starting at $19.95 per month and offers an extensive list of voice features to manage your call center.
  • 8×8 Virtual Office provides complete cloud-based virtual office solutions, including VoIP plans, starting at $24.99 per month.

VoIP providers work with your business to configure the best system for handling all your calls. Small businesses may be well served with a simple setup and minimal features until they begin to expand, but large enterprises often require a network of VoIP devices and rely on options like conference calling, extension dialing, voicemail to email, and call logging.

Switching to VoIP for personal or business use can give you more options than a landline at a lower monthly cost. VoIP has the potential to change the way you stay in contact in your personal life and your ability to maintain business connections no matter where you go. Consider the pros and cons, shop around for software and providers, and get started with the right VoIP option for your needs.