Should your business invest in a VoIP phone service?

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published 24 February 2024

Time is almost up for the copper network that has enabled Britons to make and receive telephone calls for more than a century. In 2025, Openreach will switch off the UK’s analogue network. That means both businesses and homes will need to switch to a digital service before then if they haven’t already done so.

For small businesses, this represents an opportunity. Making the leap to digital could give you access to a range of new services, as well as improved pricing.

Digital telephone services, known as voice over internet protocol (VoIP) in telecoms industry jargon, are provided through broadband connections. Most businesses will already have access to broadband, but if yours doesn’t, your VoIP provider should be able to supply one specifically to support its phone service.

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How much will a VoIP service cost?

The good news is that this is a competitive market. But the best provider for you will depend on a range of factors: how your business uses its phone system, but also what features you need.

Typically, you will pay a monthly line-rental fee for your service, charged per user – anywhere from £10 to £50 a month per employee is common. You may also have to pay usage costs based on the calls your firm makes, particularly if you make many international calls. The other cost to consider is what you might spend on hardware – VoIP handsets, for example, although many employees simply use their existing computer headsets.

Providers will expect you to sign up for a contract but try not to tie yourself in for longer than necessary, particularly if you’ve not used VoIP before. Small businesses should be able to access 12-month deals. This will mean you don’t have to wait long to switch if you’re not happy with the first provider you choose.

Most providers offer several levels of service. You will pay more expensive rates if you want additional benefits. These vary enormously, but standard features include voicemail, call forwarding, call conferencing and call waiting. For businesses that take a large number of calls from customers, VoIP can be a useful way to keep them happy. You can access features such as hold music and messaging and automatic callbacks. You can also integrate your phone system with your customer relationship management (CRM) systems, as well as any data analytics technologies that you use. Flexibility is also important.

As your business grows, it’s useful to be able to add new employees to the system very easily. Many services provide BT plans to switch the analogue telephone network off next year a simple dashboard through which you can add users yourself. And because your ways of working may change, look for a provider that makes it easy for staff to access the system on different devices, including when they’re working remotely.

Voice over IP options for small businesses

With so many variables to consider, it’s difficult to come up with a single best-buy provider for small businesses. However, research published by the website Start-ups picked out seven providers in particular as a good place to start the search for your VoIP system.

The best all-around buy in the research is 8x8, but it also highlights Vonage, bOnline, Dialpad, GoTo, RingCentral and Nuacom as worth considering. Most of these VoIP providers will give small businesses free trials in order to give you an idea of what they offer and how they work.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.