How can small businesses use phone equipment without spending too much?
It’s a common question that crosses the minds of business owners from time to time. And Internet Protocol phone, or IP phones, are the answer.
These physical office devices use Voice over IP (VoIP) technology to transmit calls instead of relying on traditional phone lines. As enterprises worldwide embrace digital transformation, IP telephony is becoming the standard for efficient communication.
The global VoIP market, valued at $132.47 billion in 2023, is projected to reach $326.27 billion by 2032. This growth is driven by improved communication infrastructure, the adoption of mobile VoIP, and the increasing demand for cost-effective, feature-rich solutions.
For businesses, IP phones deliver the familiar calling experience with key advantages, which we’ll cover in this article.
What is an IP Phone?
As previously discussed, an IP phone is a business telephone that uses Voice over Internet Protocol technology to make phone calls over the internet.
Unlike traditional landlines, which rely on traditional phone lines, or softphones, which operate through software on computers or mobile devices, IP phones are physical desk phones that connect directly to the internet via Ethernet or Wi-Fi.
In essence, they convert voice into digital signals that are transmitted through your internet connection.
RELATED: Softphone Benefits for Business That Will Make You Ditch Landlines
How does an IP Phone work?
An IP phone revolutionizes voice communication by connecting straight to a VoIP service, another VoIP device, or a VoIP gateway. A Wi-Fi-enabled IP phone also connects wirelessly to the internet, offering the same independence from PCs and software.
This setup gives businesses location flexibility, allowing them to use numbers anywhere with internet access. It also offers scalability, making it easy to add or remove lines without the need for additional wiring.
And the best part? It comes with advanced features like call forwarding, voicemail, Interactive Voice Response (IVR), and more!
Click here to check out the Most Popular IP Phones!
How does an IP Phone System work?
But how exactly does it convert your voice into calls over the internet? Here’s a step-by-step breakdown:
1. Converting analog to digital
When you speak into an IP phone, it captures your analog voice signals and instantly converts them into digital data packets.
2. Internet transmission
These digital packets are then sent over your high-speed internet connection to a VoIP service provider, which routes the call to the recipient – whether they’re using another IP phone, a mobile, or a landline.
3. Voice reconstruction
At the receiving end, the digital packets are reassembled and converted back into clear audio signals, allowing the other person to hear your voice in near real-time.
IP Phones X VoIP Phones: What’s the difference?
While the terms “IP Phone” and “VoIP Phone” are often used mutually, there are subtle technical distinctions between them. Let’s take a closer look:
| Feature | IP Phone | VoIP Phone |
| Form Factor | Physical hardware | Hardware or software (desktop and mobile apps) |
| Deployment | On-premises or hybrid | Cloud-based or hybrid |
| Core Technology | Uses SIP (Session Initiation Protocol) or proprietary protocols | Include any device or software capable of making calls over the internet |
| Use Case | Ideal for office environments | Best for remote teams and global collaboration |
RELATED: What is the cost of VoIP for small business?
Which one should you choose?
If your business already has an on-site phone infrastructure, IP phones offer reliable, plug-and-play functionality for daily office communication.
For businesses prioritizing mobility, scalability, and cost-effectiveness – especially those with remote teams – VoIP phones provide ultimate flexibility without the need for physical hardware.
Why Would Someone Use a VoIP phone?
While it works anywhere with internet access, VoIP phones are ideal for remote/hybrid teams, with 5G and high-speed internet enabling reliable HD voice quality. It also easily scales as your business grows.
Businesses are upgrading to enhance both internal and external communication, and startups and enterprises alike benefit from VoIP solutions.
The bottom line is: with proper internet bandwidth, VoIP delivers equal or better call quality than landline phones.
Can I use an IP phone as a normal phone?
The good news is, you can definitely use a VoIP phone as a regular phone! Basically, VoIP phones work just like traditional phones. But instead of connecting through a telephone line, they connect through the internet so you can use your phone number.
IP Phones have the same look and feel like that of a traditional phone system. It comes with a receiver, keypad to make calls and a button to hold and transfer calls.
Apart from this, there is not much need for the business to further train and educate their employees on how to make use of an IP Phone. Everything is the same as the traditional phone.
The only difference is the addition of advanced functionalities, which makes them a better alternative to analog phones thanks to VoIP phone systems or IP PBX systems.
Types of VoIP business phones
VoIP technology offers a variety of phone options tailored to different business needs. Whether you prefer the feel of a traditional desk phone or the convenience of software-based calling, there’s a VoIP solution that fits your setup.
Below are the two main types of VoIP business phones:
Purpose-build hardware (SIP Phones)
Physical IP phones include familiar office models, cordless handsets, and specialized conference units.
These devices are designed specifically for VoIP calls and systems using Session Initiation Protocol (SIP), offering a reliable, tactile experience similar to traditional telephony.
RELATED: 5 Benefits of SIP Trunking
Software-based softphone
For businesses seeking maximum flexibility, softphone applications transform computers and mobile devices into fully functional VoIP endpoints.
These software solutions replicate all calling features while eliminating the need for dedicated hardware.
Check the most popular softphones on our Wiki page!
Benefits of IP Phones
Switching to IP phones doesn’t just modernize your business communications. It also brings a host of advantages that can boost efficiency, save money, and improve the way your team connects.
Here’s why IP phones are a smart choice:
- It allows cost-savings
- They are similar to traditional phones
- Ip phones have more features for less hardware
- It allows for unified communications
Cost-savings
One of the biggest bonuses of IP phones is how much money they can save your business:
- No need for expensive landline infrastructure
- Lower costs for long-distance and international calls
- Flexible pricing that scales with your company’s growth
Similar to traditional phones
IP phones keep the familiar look and feel of standard office phones, with receivers, keypads, and call buttons right where you’d expect them. That means your team won’t need much (if any) training, but they’ll still enjoy the benefits of digital features behind the scenes.
| Note: Remember that you can still use your analog phones with an IP network. However, you will need an adapter in order to transform those phones into devices compatible with VoIP/IP technology. Learn more about Analog Telephone Adapters. |
More features, less hardware
IP phones use your existing internet connection, so there’s no need for extra copper wiring or complicated setups. This not only cuts down on hardware costs but also unlocks powerful features like advanced call routing, built-in messaging, and customizable interfaces.
Unified communications
With VoIP technology, voice, video, and SMS messaging all work together in one system. That means your team can jump between voice calls, video conferencing, and file sharing without skipping a beat, something old-school telephone systems just can’t offer.
RELATED: Learn all about the VoIP.ms and Microsoft Teams integration
Challenges of IP Phones
IP phones come with a lot of great benefits, but like any technology, they also have a few things to consider. The most important? A strong and stable internet connection.
To keep your calls crystal-clear and reliable, your business network needs to be ready to handle voice traffic along with your other online activity. A little planning upfront ensures your system runs smoothly without issues.
Upgrade Your Business Phone System with VoIP.ms
Looking to modernize your business communications? Switching to IP phones is a smart move.
It’s a cost-effective way to boost your phone system’s performance while adding powerful features that support your team’s day-to-day operations and future growth.
With minimal hardware and easy setup, VoIP phones offer the flexibility today’s businesses need. You’ll enjoy lower phone bills, better call quality, and a familiar phone experience your team can start using right away.
Ready to make the switch? Get to know our VoIP Phone Services!
IP Phone FAQ
Have more questions you don’t see answered here? Talk to our Sales Team!
Do VoIP phones have a monthly fee?
It depends on the provider, not on the hardware. At VoIP.ms, we offer a flexible pay-as-you-go model – no contracts, no hidden fees. You only pay for what you use, which makes it an ideal solution for growing businesses.
Click here to learn more.
What is an IP Phone System?
An IP Phone System is a modern business phone setup that uses VoIP to make calls over the internet. These systems can include desk phones that connect via Ethernet or Wi-Fi, providing a reliable and cost-effective telecommunication solution for companies of all sizes.
When should I consider switching to an IP phone system?
If you’re looking to cut costs, improve call quality, or support remote and hybrid teams, it’s time to consider an IP phone system. Businesses often make the switch when they want to upgrade their communication tools to be more scalable, flexible, and efficient.
Business VoIP offers great opportunities for companies of all sizes to do just that, since they offer important features like conference calling, instant messaging, call transcription, call recording and other add-ons vital for improving customer experience and business operations.
How to set up a VoIP system?
Setting up a VoIP system is easier than you think:
- Test your internet connection
- Choose your device (softphone or IP desk phone)
- Pick a VoIP provider
- Select the features that matter most to your business
- Get your phone number (or port the one you have to your new provider!)
- Run a quick test, and you’re ready to go!
Need help? Follow our step-by step guide!
How to choose the best provider?
To find the right provider for your business, consider the following:
- Transparent pricing and flexible plans
- Key features that match your communication needs
- Reliability and call quality
- Number portability (can you keep your current number?)
- Customer support that you can count on
VoIP.ms offers all that – and more – to help your business stay connected, no matter where your team is. Click here to learn more.