VoIP technology has become widely adopted by consumers and businesses for various reasons. Some companies have transitioned to unified communications, while others are in the process of switching to VoIP. However, cost savings is the primary motivation for many organizations to consider upgrading to VoIP.
It is widely known that VoIP is more cost-effective than traditional landline systems. However, it is important to note that the cost savings may vary depending on the service provider and the initial investment required for the upgrade. Additionally, not every business may experience the same level of cost savings.
Traditional Phones Vs VoIP Call Cost
Traditional telephones use circuit switching, which connects two phones through a series of exchanges. The route remains the same for the duration of the call. On the other hand, VoIP uses the internet to connect phones or other portable devices and is known as packet switching. Data is split into packets with their own identifying information and sent across the network. The packets are reassembled at the receiving end to form the communicated data.
In the past, the call quality was not as good as traditional telephones, but technological advances have improved it to the point where it is comparable or even better. The PSTN (public switched telephone network) is a worldwide network operated by regional, local and national providers; it has limitations such as telephony features, maintenance costs, and the commercial attitude of monopolistic providers.
Why Are VoIP Calls Cheaper Than Normal Phone Calls?
Before delving into the cost comparison, it’s important to understand the technical reasons behind the affordability of VoIP calls. Like traditional phone calls, VoIP calls involve audio transmission between two parties.
However, VoIP calls transmit this audio through digital data packets over the internet. It means that the network equipment required for VoIP calls is similar to that used for other data types. Instead of requiring dedicated copper wires, VoIP calls utilize existing data networks, making them more cost-effective.
In other words, the cost savings associated with VoIP calls are similar to those of email, as they do not require the additional infrastructure and networks that traditional phone calls do. As you already pay for internet access, you can take advantage of this VoIP call cost-effective feature without extra expenses.
How Much Does A Single VoIP Call Cost?
Now that you understand the technical reasons behind VoIP’s cost savings let’s compare the costs between VoIP and traditional phone systems. One key difference is that with the PSTN, different rates apply for domestic and long-distance/international calls. At the same time, with VoIP, the vendor typically doesn’t consider the caller’s location or the person being called.
From a business perspective, a large portion of calls made is internal, meaning they are between employees of the same or different offices. For this reason, most internal calls never touch the PSTN and are, therefore, free with VoIP. It does not matter how long the call lasts, how many people are on the call, or where the participants are. All internal calls are free with VoIP technology.
How Much Does An International Call Cost With VoIP?
For calls made or received outside of the company network, there is generally a cost associated with the call as it travels over the PSTN at some point. However, since only a small portion of the call is on the PSTN, the cost per call is significantly less expensive than traditional landline rates.
Many VoIP service providers offer various pricing options for these types of calls. Some providers offer unlimited calling to specific countries for a flat fee, while others offer pay-as-you-go plans. It’s also possible to combine these options, depending on where most of your call traffic is going. For example, if most of your calls are to France and Germany, with occasional calls to other countries, you could opt for unlimited calling to just those two countries.
What About Taxes And Set Up Cost?
Businesses typically incur expenses for purchasing hardware and setting it up when using a traditional PBX office system. Additionally, businesses may pay additional fees for each line they purchase for users. However, switching to a hosted VoIP service eliminates these costs.
Hosted VoIP vendors generally charge a fee per user per month. Some providers include all business features in one package, while others offer different bundles at different price points. Business plans for VoIP can start as low as $20 per month. It can be difficult to predict the cost of upgrading to VoIP until you calculate the numbers, but businesses can expect savings of 40% or more in their monthly bills when switching to a hosted VoIP service.
Read More: Informational Tech Blog
In conclusion, VoIP technology has become widely adopted by businesses for its cost-saving benefits. VoIP uses the internet to connect phones and other devices compared to traditional landline systems, eliminating the need for dedicated copper wires and additional infrastructure. As a result, the cost savings associated with VoIP calls are similar to those of email. Businesses can expect 40% or more savings in their monthly bills when switching to a hosted VoIP service.
Additionally, it eliminates the need for purchasing hardware and setting it up and eliminates additional fees for each line purchased for users. However, it is important to note that the cost savings may vary depending on the service provider and the initial investment required for the upgrade. Not every business may experience the same level of cost savings.
I am Zoya Arya, and I have been working as Content Writer at Rananjay Exports for past 2 years. My expertise lies in researching and writing both technical and fashion content. I have written multiple articles on Gemstone Jewelry like Larimar Ring and other stones over the past years and would love to explore more on the same in future. I hope my work keeps mesmerizing you and helps you in the future.