Voice-over-internet-protocol (VoIP) services operate as a standalone phone service, allowing users to access advanced call management features and more advanced integrations at higher price points. Virtual phone systems also let you make and receive calls using mobile devices, but while they often cost less, they lack high-level features and typically require an existing line to forward calls.
- VoIP: Best for midsize and larger teams that want powerful features like video calling, file sharing, and advanced auto-attendants
- Virtual phone: Solo workers, freelancers, and very small teams looking to save money and want a dedicated business line for customers to call
VoIP vs Virtual Phone Systems at a Glance
Features | VoIP | Virtual Phone |
|---|---|---|
Best For | Midsize-to-large teams | Solo workers, freelancers, and tiny teams |
Price Range | $19.99 to $59.99 per user, per month | $10 to $30 per user, per month |
Automated Attendant | ✔ | ✔ |
Advanced Features | ✔ | N/A |
Software Integrations | ✔ | Sometimes |
Supports Multiple Simultaneous Phone Calls | ✔ | ✔ |
Supports Video Conferencing | ✔ | N/A |
Does Not Require an Existing Phone Line | ✔ | N/A |
Advanced Analytics | ✔ | N/A |
Advantages | Runs independently, advanced features, unlimited scalability | Affordable, basic features, easy to use |
Disadvantages | Expensive, overkill features for small teams | Limited features, requires an existing line, difficult to scale |
Takeaway: VoIP platforms go above and beyond your basic business phone system. On top of calling and texting, VoIP systems typically provide video conferencing, file sharing, team messaging, call queuing, and advanced integrations. VoIP system features are essential for large teams to collaborate effectively, but they often demand substantially higher costs than virtual phone services (sometimes as much as three to five times more). Virtual phone services require you to bring an existing line, but they offer streamlined services, basic features, easy-to-use platforms, and more affordable monthly prices. These are perfect for smaller teams with limited scopes.
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When to Use a VoIP System
If you have a midsize team and consider your company to be established, explore what a VoIP service offers when you are thinking about your calling needs. Most VoIP systems provide a complete set of communication tools, which means you can consolidate your mobile apps, video conferencing channels, and team chat tools into a single platform.
However, VoIP services run entirely over your network, so you’ll need to ensure your internet connection can handle the predicted call volume. We recommend taking our VoIP speed test to measure the overall health of your network. For more details on how many lines your setup can support, we recommend looking at our VoIP speed test guide.
VoIP Pros & Cons
| PROS | CONS |
|---|---|
| Advanced features add additional channels and call management control | Expensive setup and monthly pricing, especially compared to virtual phone solutions |
| Doesn’t require an existing line to forward calls from | Overkill feature sets for smaller teams with more limited needs |
| Unlimited scalability for growing your teams and communications program | |
VoIP Pricing
VoIP services range in size and complexity, and this impacts the price. For example, you can use RingCentral for just $19.99 per user, per month for two to 20 users on an annual plan. If you scale your plan to add more users and functionality, then you could end up paying as much as $49.99 per user, per month. Check out RingCentral for yourself with its free 15-day trial.
Why VoIP Is the Better Choice for Established Companies
Larger teams need additional lines, licenses, and extensions to ensure agents and customers can make calls whenever they need to. More members and teams also mean you’ll have diversified use cases, and some individuals will likely need video conferencing, file sharing, and team messaging features. VoIP platforms provide the perfect all-in-one solution that’ll satisfy everyone.
When to Use a Virtual Phone System
A virtual phone system is a perfect option if your business just needs a dedicated phone line with minimal features. Most don’t come with video conferencing and team messaging abilities, but they’ll provide texting, calling, voicemail, mobile apps, auto-attendants, and more. Plus, they can cost substantially less than VoIP systems, a make-or-break factor for small teams on a budget.
Virtual Phone Pros & Cons
| PROS | CONS |
|---|---|
| Affordable setup and monthly pricing costs (some are even free for limited uses) | Lacks advanced features like video conferencing, team messaging, and file sharing |
| Provides the basic features most small businesses need | Difficult to scale to larger teams and businesses |
| Easy-to-use tools that keep communications quick and simple | Requires an existing phone line to forward calls from |
Virtual Phone Pricing
Virtual phone services come at different price points. For example, Grasshopper, one of our top picks for virtual phone services, offers plans starting from $26 per month for one number and three extensions. And Grasshopper’s Small Business plan is just $80 per month for five phone numbers and unlimited extensions, making the effective per-user cost less than $16 per month.
Why Virtual Phone Is the Better Choice for Smaller Teams
Smaller teams often have tighter budgets and fewer use cases. In most situations, a virtual phone service will provide everything that you need. Unless you need more advanced features like customer relationship management (CRM) integrations, call management control, and video conferencing, then a virtual phone service will cover your communications program just fine.
Frequently Asked Questions (FAQs)
Can I use a VoIP system on my smartphone?
Yes. Most leading VoIP systems offer apps for iOS and Android devices.
Can I transfer my number from a virtual phone system to a VoIP service (& vice versa)?
Yes. Your service provider will usually walk you through this process during the transition and onboarding stage. Transferring a number is routine practice, so don’t worry too much about the logistics—your new customer support team will help you out.
What number does someone see when I call them with my virtual phone system?
When you call someone with a virtual phone solution, the call will get forwarded from an existing line, such as a landline or mobile phone. However, the person you are calling will see your virtual phone number on their caller ID.
Bottom Line
VoIP and virtual phone systems are the new standards for modern-day business communications. They’re less expensive than traditional landline-based services, and they also provide greater flexibility, advanced features, and integrations.
If you are in the market for a new VoIP system, we suggest looking at RingCentral, our best overall pick. The system comes in a wide range of pricing plans, has a robust feature set, and is incredibly easy to use.
