What is VoIP, and is it right for a small business?

The short answer: VoIP (Voice over Internet Protocol) means making and taking phone calls over your internet connection instead of an old phone line. For almost every small business it's the right choice now, especially as the old copper phone network is being switched off. It's usually cheaper, more flexible and lets your people take work calls from anywhere.

How it works

With an old-style phone system, calls came in on physical phone lines to a box in a cupboard, which passed them to the desk phones. With VoIP, your phone system lives "in the cloud" with your provider. Calls travel over the internet to whatever device each person is using.

That device can be:

• A desk phone that plugs into your network, looks like a normal office phone and works the same way.
• An app on a mobile, so your business number rings on your mobile and you can call out showing the office number, not your personal one.
• An app on a computer, used with a headset.
• Microsoft Teams, if you already use it. With Teams Phone, people can make and take normal phone calls in Teams. It suits some businesses well, but it isn't the only option and isn't always the simplest.

Most people use a mix: a desk phone in the office and the app when they're out.

The useful features

VoIP systems typically include features that used to need expensive equipment:

• Call forwarding. Send calls to a mobile or another number when you're out.
• Hunt groups. Ring several people at once, or one after another, so calls get picked up.
• Auto attendant (call menus). "Press 1 for sales, 2 for accounts."
• Opening hours and holiday greetings. Calls are handled differently out of hours, at weekends and on bank holidays. See How do I change my phone greeting for bank holidays?
• Voicemail to email. Voicemails arrive in your inbox as audio files.
• Work from anywhere. People at home or on the road answer the same number as if they were at their desk.
• Easy changes. Adding a starter or changing who answers what is usually done in a web portal, not with an engineer visit.

And you can almost always keep your existing numbers. See Can I keep my business phone number?

What you need

• A decent internet connection. Each call uses only a small amount of bandwidth, but it needs to be steady. Full fibre or good FTTC is fine for most small offices. See FTTC, FTTP or leased line?
• A router that prioritises voice. Business routers can give calls priority over things like downloads and backups (often called QoS). Without it, calls can get choppy when someone uploads a big file.
• Decent Wi-Fi or cabling. Desk phones are best on a cable. Apps on mobiles work over Wi-Fi or mobile data. If the office Wi-Fi is patchy, calls will be too. See Why is my office internet slow?

Emergency calls and power cuts

This is the bit people forget, so it's worth being clear about.

• VoIP phones need power and internet. In a power cut or an internet outage, desk phones won't work. Old copper phones often did.
• Keep a mobile handy for emergencies, and make sure your people know to use it if the office phones are down.
• Register your address for 999 calls. Your provider holds the address that emergency services see when you dial 999 from a VoIP phone. Check it's correct, and update it if you move. Remember that someone calling from the app at home may show the office address.
• Tell your provider about anyone who relies on a landline for safety, for example lone workers or telecare. Providers have to offer a solution for vulnerable users, such as a battery backup.

Is it right for your business?

For most small businesses, yes. It's worth a closer look if:

• you're on old phone lines or ISDN, which are being withdrawn. See What does the PSTN switch-off mean for my business?
• people work from home or on the move and miss calls
• your phone system is old, out of support or expensive to maintain

VoIP is usually cheaper than old lines, because you pay per user and there's less equipment to maintain.

Common questions

Is VoIP call quality as good as a landline?

On a decent connection with voice prioritised, yes. Problems with VoIP are almost always down to a busy connection or poor Wi-Fi, which can be fixed.

Can I use my mobile as my office phone?

Yes. With the VoIP app, calls to your office number can ring on your mobile, and calls you make can show the office number. Your personal number stays private.

What happens if the internet goes down?

Calls can usually be redirected automatically to mobiles or another number until it's back. A 4G or 5G backup connection on your router can keep calls running too.

Do I need Microsoft Teams Phone?

No. It's one option and works well if your business lives in Teams. A standalone cloud phone system with apps and desk phones is often simpler and just as good.