Business phone service has transformed dramatically over recent decades—so it’s critical to know your options if you’re thinking about switching providers or replacing your phone system.
Recent changes in carriers’ offerings have mainly been driven by the evolution of Voice over Internet Protocol (VoIP) technology. VoIP makes it possible to send phone calls over the Internet, as opposed to traditional phone lines.
VoIP service is technically complex, so you’ll need to understand the key elements of a solution before you begin evaluating providers. Additionally, there are reasons to explore other types of phone service besides VoIP even though most businesses are now migrating to VoIP service when they need a new system.
We’ve written this buyer’s guide to familiarize you with the major kinds of business phone service on the market today. Here are the topics we’ll explore:
Phone Service Types: POTS, VoIP, Cellular and PRI
Pros and Cons of Different Service Types
Finding the Right Service Type for Your Phone System
The Difference between SIP Trunking Service and Business VoIP Phone Service
The following graphic breaks down the basic types of voice service available in North America:
POTS offers one unique advantage over other kinds of voice service: POTS transmits voice information as an analog audio signal using electricity, so POTS lines supply power to both phones and voice service. This means that POTS will keep phones ringing even if the power gets knocked out.
That said, the FCC is currently overseeing the sunset of the traditional copper telephone network. If you’re currently using POTS, you need to be aware that copper phone lines will be dead for good in just a few more years.
VoIP is a technology that transmits real-time voice information as data using an Internet connection.
VoIP differs from other digital voice services in that the voice information isn’t just digitized, but also transmitted using Internet Protocol (IP). This means you can use broadband Internet access for both voice and data. Other kinds of digital voice service businesses need both Internet and voice service.
VoIP can be used with various types of Internet access, including:
You just need sufficient bandwidth for the calls. Just like streaming video, VoIP demands lots of bandwidth, as calls are streamed in real-time.
Cellular service only supported voice calling at one point, but it now refers to a family of services that also enable wireless data connections to the Internet.
On a smartphone, a voice call can be routed via the cellular carrier, which will rack up per-minute rates. However, the call can also be sent over a long-term evolution (LTE) data connection, so you only pay for the data used by the call—no per-minute rates.
This is a variation on VoIP known as Voice over LTE, or VoLTE. (While LTE refers specifically to 4G networks, a 3G or wireless Internet connection can also be used.)
Finally, T1 connections support a whole family of digital voice services:
The table below summarizes the advantages and disadvantages of each service type:
There are two basic elements of a communications solution: the hardware- or software-based phone system (also known as a Private Branch eXchange or PBX system), and the phone service that allows you to make and receive calls.
Some businesses don’t even have desk phones—just softphone applications installed on laptops that connect via the Internet to a phone system in the service provider’s data center.
VoIP-based systems are particularly flexible in this respect.
The table below shows the major phone system types and the voice services they work with. Definitions of each system can be found below the table:
|Cloud-based or on-premise IP PBX||✓||✓|
Similarly, employees can call out from their mobile devices using their work numbers, though some virtual PBX solutions have limits when it comes to outbound dialing; others treat it as an add-on capability. Virtual PBX solutions also offer a very limited set of basic phone system features like auto attendants.
As we’ve explained, calls between offices are free with business VoIP service because they don’t have to travel over the traditional phone network (known as the Public Switched Telephone Network or PSTN). This is also why services such as Skype offer free voice and video calls, but only to other Skype users.
In order to connect calls between VoIP numbers and numbers serviced by the PSTN in this country or internationally, you need a special service known as SIP trunking. SIP trunking is a complex network service, but it essentially acts as a bridge across which voice calls can travel between the Internet and the PSTN.
Confusingly, the term “VoIP service” can refer either to the delivery of phone system functions (call routing, voicemail, call recording etc.) over the Internet with a cloud-based PBX, or to SIP trunking service.
With an on-premise IP PBX, you’ll need a SIP trunking provider to connect calls, unless you’re planning to restrict communications to calls between offices.
Configuring SIP providers in Digium Switchvox
With a cloud-based PBX, you may or may not need a separate SIP provider.
Many cloud PBX vendors handle SIP trunking for their customers via their relationships with major carriers. This means that you only need to deal with one company for both your phone system and SIP trunking needs.
On the other hand, some businesses choose to go with separate companies: one for the phone system and one for SIP trunking. This setup makes sense if your SIP provider is offering you particularly good rates on calls, or if you’ve had good experiences with the providers’ uptime and quality of support.
You can connect SIP trunks from various providers to a phone system hosted in the cloud, just as you can with a phone system on your business’s premises.
Whether you have a cloud-based or on-premise IP PBX, you’ll need to make sure that your SIP trunking provider is compatible with your phone system (unless, of course, the same company is handling your hosted system and your SIP trunking).
The graphic below shows the different ways in which SIP trunking can be combined with VoIP systems:
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