What is a VoIP Phone?

In recent years, the popularity of Voice over Internet Protocol (VoIP) phones has skyrocketed, revolutionising the way businesses communicate.

This boost in adoption can be attributed to the numerous advantages offered by VoIP technology, such as cost savings, scalability, and enhanced flexibility.

VoIP’s popularity has also increased since the phasing out of traditional landlines in the UK. By December 2025, the public switched telephone network will be switched off and landlines will no longer work. So, understanding what VoIP phones are and how they function has become crucial for business operations.

In this article, we’ll delve into the world of VoIP phones, shedding light on their features and benefits. So, if you’re curious to explore the next frontier of telecommunication, keep reading to discover what lies ahead.

If you’re ready to explore the top providers in the industry, take a look at our guide to the best business VoIP providers in the UK.

What are VoIP Phones?

Before we dive in, you may first be wondering what is VoIP?

VoIP phones, also known as Voice over Internet Protocol phones, are communication devices that allow phone calls to be made and received over the internet.

While traditional phone lines rely on analog signals, VoIP phones convert voice data into digital packets and transmits them through internet networks. This digital communication provides high-quality calls, more features, and a lower cost when compared with traditional phone systems.

VoIP phone systems are best suited to businesses looking for a cost-effective phone solution packed with advanced features, such as call queuing or AI technology. Whether it’s a small startup, a growing company, or a large enterprise, VoIP phones can offer you the flexibility and scalability to meet dynamic communication needs.

As VoIP phones are digital, they can be integrated with other software, such as a CRM system, to provide a smoother experience for your customers and a more streamlined process for your agents and business.  As VoIP runs over the internet, its systems can be used on smartphones, tablets, and computers.

For an even more digital experience, you can opt for a VoIP provider with a softphone app, which allows you to install a phone on your desktop or smartphone, think Zoom or Skype. Check out our guide to the best softphone apps for businesses.

The Advantages of using VoIP phones

Using a VoIP phone for your business offers numerous advantages, and we’ve highlighted our top reasons why you should consider this technology:

• Cost-effectiveness:

VoIP uses your existing internet infrastructure to transmit voice calls, eliminating the need for separate phone lines. This makes it cost-effective because   you no longer need to maintain or rent traditional landlines.

VoIP often includes features that would usually incur additional charges with traditional phone systems, such as call forwarding and virtual receptionists.

Plus, VoIP can be used on devices such as a desktop computer or tablet, so there is often no need to purchase additional hardware.

• Flexibility and scalability:

One of VoIP’s key advantages is the ease of adding or removing phone lines as and when needed. Traditional phone systems require physical installation and wiring, whereas VoIP lines can be effortlessly added or removed as it’s a cloud-based phone system.

Some VoIP providers also offer virtual phone number apps, giving your business the flexibility to offer a professional service from anywhere in the world.

VoIP phones can be used anywhere with an internet connection, whether that’s in the office, at home, or while on the move. This level of flexibility allows businesses to maintain consistent communication.

• Integration of features:

VoIP phones provide a wide range of features including call forwarding, call routing, and voicemail. It also integrates well with other communication tools such as CRM (customer relationship management) and email systems. This integration of features provides more streamlined workflows, as voicemails can be forwarded to email inboxes and caller information can be automatically aligned to CRM systems, leading to more efficient customer interactions.

• Improved productivity and collaboration:

VoIP includes features like call routing and virtual extensions, which increase communication efficiency. While call routing directs calls to specific individuals or departments based on predetermined rules, virtual extensions allow your business to give extensions to employees who are located off-site.

VoIP phone systems allow for video conferences and screen sharing, which encourage real-time digital collaboration and productive remote meetings. VoIP phones also combine voice, video, messaging, and other communication channels into one platform, enhancing teamwork and streamlining communication.

For a more specific look at the benefits of VoIP phones, have a look at our dedicated page on the Benefits of VoIP Technology.

The Disadvantages of using VoIP phones

Despite all the benefits of using VoIP phones, there are some disadvantages, including:

• Dependence on Internet connection:

VoIP phone calls depend on a stable internet connection for reliable and high-quality communication. A poor internet connection can lead to call quality issues like choppy or distorted audio, echo, delays, or even dropped calls.

For optimal VoIP performance, a stable and high-speed internet connection is vital. Voice packets can be transmitted smoothly over a reliable connection, providing clear and uninterrupted conversations.

Bandwidth limitations or a busy network can also affect call quality, leading to a frustrating user experience. If your internet network starts experiencing issues, your call quality and even your ability to make and receive calls may be negatively impacted.

• Power and network outages:

Power outages can significantly impact VoIP phone systems as they rely on electricity to power the internet connection and devices used for communication. When you lose power, you’ll lose the ability to use your VoIP phone system. To mitigate this, you can opt to install a backup power source, such as a generator, to ensure you don’t lose connection to the system.

If that option is too pricey, you can also ensure you have alternatives, such as a mobile phone, in case something happens to your main VoIP phone system. Network redundancy and failover systems are vital for uninterrupted service, as they allow automatic switching to backup connections or alternative routes in the event of power disruptions.

If you do face connectivity issues or a system fault, check out our guide to reporting telephone system faults for businesses.

• Security and privacy concerns:

As the VoIP process involves voice data being transmitted over the internet, unauthorised individuals can intercept and manipulate it if the right security measures aren’t in place. It’s important to implement encryption protocols to ensure your voice calls remain confidential.

With security a concern, it is vital to choose a VoIP provider that prioritises security and regularly updates its protocols to address emerging vulnerabilities. Some security measures that help safeguard sensitive data include regular security audits, patch management, and user education.

How VoIP Phones Work

VoIP phones work by converting analog voice signals into digital packets that are transmitted over an IP network. The VoIP phone system architecture usually consists of three main parts: endpoints (VoIP phones), a signalling system (IP PBX or VoIP server), and a transport network (typically the internet).

When a call is initiated, the signalling system handles call setup by sending signalling messages to establish a connection between two endpoints. Once established, voice data from the call is encoded using codecs (compression/decompression algorithms) to reduce bandwidth requirements.

The encoded voice packets are then transmitted over the IP network using protocols such as Real-time Transport Protocol (RTP). The transport network ensures the reliable delivery of packets to the recipient’s VoIP phone. At the receiving end, the voice packets are decoded, converted back to analog signals, and played through the speaker.

The choice of codecs and the quality of the underlying network infrastructure significantly impact call quality in terms of clarity, delay, and reliability. So, selecting appropriate codecs and maintaining a strong network infrastructure are crucial for ensuring high-quality VoIP phone calls.

Why has VoIP become a crucial technology for UK businesses?

The PSTN network will be switched off by December 2025, which means businesses are being forced to choose alternative phone systems. While this may seem like a hassle, it does mean that more businesses will be able to get their hands on advanced features and reduce costs.

Traditional landline systems tend to be pricier than VoIP phone systems – and they provide fewer advanced features. As we approach the December deadline for the 2025 PSTN network shutdown, if you’re currently using a landline, you might experience quality issues or even dropped calls.

PBX telephone systems are another option for businesses, but  they can be expensive to set up and run.

VoIP providers offer useful features that are built-into the price, like video conferencing, virtual receptionist, and autodialer. These features make it much easier to collaborate and maximise agent productivity and time.