Is VoIP Cheaper Than a Landline for Business?

VoIP vs Landline: The Cost Comparison

The short answer is yes — VoIP is almost always cheaper than a traditional business landline in the UK. But the magnitude of the saving depends on your current setup, how many lines you have, and what you are paying for legacy infrastructure. This guide works through the comparison with real figures.

What Traditional Landlines Cost

A traditional business phone system has several cost components that are easy to overlook individually but substantial in aggregate:

• PSTN line rental: A basic BT business line costs approximately £18–£30 per month per line.
• ISDN2 channels: BT ISDN2 provides two channels per basic rate interface at approximately £25–£45 per month per interface.
• ISDN30 channels: ISDN30 (used by larger businesses) costs approximately £8–£12 per channel per month, with a minimum of 8 channels, plus a monthly rental of £50–£100.
• On-premise PBX maintenance: Annual maintenance contracts for physical PBX hardware typically cost £500–£3,000 per year depending on system size and age.
• Call charges: Traditional landline tariffs vary significantly. Business calls to UK mobiles are often 5–15p per minute on standard tariffs.

A typical 10-user business with ISDN30 (10 channels), a maintenance contract, and standard call tariffs might spend £600–£900 per month on telephony.

What VoIP Costs

The same 10-user business on a mid-tier hosted VoIP plan (£12–£18 per user per month) would pay £120–£180 per month. This includes:

• Cloud PBX with all features (call recording, auto-attendant, analytics)
• Unlimited UK landline and mobile calls
• Mobile app for each user
• Online management portal
• No hardware maintenance contracts

The saving in this example is £420–£720 per month — a reduction of 60–80% on the monthly telephony bill.

Where the Saving Comes From

Elimination of Line Rental

VoIP runs over your existing internet connection. There are no separate phone lines to rent. The cost of bandwidth consumed by VoIP calls is negligible — each call uses approximately 100 kbps, which is a fraction of a typical business broadband allocation.

No Hardware Maintenance

A hosted VoIP system has no on-premise PBX hardware. The cloud infrastructure is maintained by the provider. Annual maintenance contract costs disappear entirely.

Lower Call Charges

Most hosted VoIP plans include unlimited UK calls (landlines and mobiles) in the monthly fee. Traditional business landlines often charge per-minute rates for mobile calls — on high-volume businesses, this alone can account for hundreds of pounds per month.

No Engineer Call-Out Fees

Changes to a traditional PBX — adding extensions, changing routing, updating features — often require a paid engineer visit. On a hosted VoIP system, all configuration is done online through the management portal. No engineer costs for routine changes.

When VoIP Might Not Save Money

There are scenarios where the immediate cost saving is smaller:

• Very small businesses (1–3 users): A single PSTN line at £25/month may be cheaper than a VoIP plan for one user. However, the feature difference is significant.
• Hardware replacement costs: If your business needs to replace all handsets with IP phones, the upfront hardware cost reduces the first-year saving. Softphone apps avoid this cost entirely.
• Connectivity upgrades: If you need to upgrade your broadband to support VoIP reliably, this reduces the net saving in the first year.

Even in these scenarios, the total cost over a three-year period almost always favours VoIP.

The PSTN Context

The cost comparison is somewhat academic given that the PSTN switch-off makes VoIP migration mandatory for all UK businesses. But the saving is real and material. Businesses that migrate proactively rather than waiting for a forced migration typically achieve better terms and a smoother transition.