Lower your phone bill with VoIP

Voice over internet protocol (VoIP) services are a type of telephone system that convert your voice into a signal that travels over the internet, instead of across traditional phone lines. Using VoIP can be cheaper and more flexible than a traditional telephone system.

VoIP options

There are two main types of VoIP:

• Direct VoIP services create a direct connection across the internet between two people. Skype and Vonage are good examples. Direct VoIP often works out much cheaper than using a normal phone line for international calls, but usually involves placing a call via a headset connected to a computer.

• Integrated VoIP services allow people in your company to place VoIP calls using a telephone which behaves just like a normal phone, but which routes calls across the internet — so your staff don’t have to learn a new way of doing things. Integrated VoIP services also include functions like voicemail and can offer savings on most types of calls, depending on the package you opt for.

Physical or hosted VoIP?

Integrated VoIP services are most commonly used by businesses with more than one or two members of staff. They come in two flavours:

• With a physical switchboard. This type of VoIP service involves installing a switchboard into your premises. Physical switchboards cost money to buy and maintain. However, they do allow you to connect lots of phones to a smaller number of phone lines. So, for example, you could reduce your line rental costs by having ten phones in a building connected to three incoming telephone lines.

• With a hosted switchboard. This type of VoIP service is sometimes called hosted VoIP. The physical switchboard is replaced by software running on a network server. The network server is usually located off your premises and maintained by another company.

With hosted VoIP, you plug your phones into your computer network. When you make a call your voice signal travels down your internet connection. This means you don’t need any phone lines (reducing line rental costs), but you do need a fast broadband connection.

Once the number of phones in your business rises above a certain number (generally around 20), then a physical switchboard and the ability to connect many phones into few lines wins in rental cost. But beneath that number of phones, a hosted VoIP system will usually offer better value.

VoIP system costs

Because a hosted VoIP system relies on software running on a server, it offers a greater set of services than a physical switchboard ever could. It’s always up to date and your VoIP supplier will take care of maintenance.

Setting up a hosted VoIP system is usually cheaper and easier than installing a physical switchboard. However, it is dependent on your internet connection. If that goes down, so does your telephone system.

In either case, the cost of individual calls is decided by your service provider. If you have a physical switchboard, then they may be paid to a telephone company like BT. If you run a hosted VoIP system, you usually pay all of your charges to the company which provides the system.

It’s often hard to work out exactly how much line rental and call charges will cost you. Look for a company with a clear pricing policy and structure.

If you opt for hosted VoIP, you should be able to call people who are on the same network for free. This can translate into big savings if your business makes a lot of inter-office calls.

More about phone systems

• How VoIP works
• Unified messaging for your business