A VoIP Cost Comparison vs Normal Calls

VoIP is everywhere. Consumers and businesses alike have embraced the new technology for a variety of reasons. Some organizations have moved on to unified communications, others are in the process of switching to VoIP. But every company has – at least once – considered upgrading to VoIP even if they’re not yet ready to do so.

Perhaps the biggest reason and the greatest motivator to use VoIP is cost. Sure, the technology offers a great many benefits not available with older systems. But the first push to consider it is usually due to cost. Almost everyone knows that VoIP is much cheaper than regular landlines.

But you may not know why it is so cheap or exactly how much your business can save with VoIP. Sometimes, the capital investment required to upgrade to new technology can outweigh the smaller reductions in the monthly bill. Added to this is the fact that not every business will get similar cost savings even if they are using the same service provider.

Why is VoIP Cheaper Than Normal Phone Calls?

Before you get into the actual numbers, you should understand the technical reasons behind why VoIP calls are so cheap. VoIP calls are functionally similar to regular calls i.e. your voice is sent to the other person to listen and vice versa.

However, VoIP systems transmit the voice calls over the Internet in the form of digital data packets. As far as your network equipment is concerned, there is not much difference between packets containing voice and those that have other types of data. Instead of dedicated copper wires between you and other callers, VoIP calls use the existing data networks.

In other words, VoIP calls are cheap for the exact same reason that email is. They don’t need a separate network or infrastructure solely for voice. Such systems rely on networks that are already used for other purposes. After all, you are already paying your ISP for Internet access. So now you know that cheap/free VoIP calls are not just a marketing gimmick.

How Much Does It Cost to Make a Single VoIP Call?

Now that you know it’s more than a sales tactic, it’s time to compare the actual costs between VoIP and normal systems. First, consider the cost of domestic calls. With the PSTN, most people are used to the different rates for domestic versus long-distance/international calls. But VoIP technology doesn’t care about your or your caller’s location.

For the most part, the vendor only cares about whether the call travels over the Internet or touches the PSTN at any point. Most vendors calculate the cost of a VoIP call based on different criteria.

From a business perspective, a large volume of your calls will likely be internal. That is calls between employees of the same office and between different offices. Barring a few departments like sales or customer service, internal calls make up the bulk of call volume. This means that internal calls never touch the PSTN at any point. Hence why these calls are free.

It doesn’t matter how long the call lasts or how many people participate in the call. It doesn’t even matter if the participants are scattered across multiple locations throughout the world. All your internal calls – employee to employee – are free with VoIP!

The Cost of International VoIP Calls

For incoming or outgoing calls that leave the company network, there is generally a cost because the call travels over the PSTN at some point. However, only a small portion of the call touches the PSTN. So the cost per call is significantly less expensive than your typical landline rates.

In fact, most VoIP service providers offer a choice of unlimited calling to specific countries for a flat fee or pay-as-you-go plans. You can even combine the two depending on where most of your traffic goes. For instance, suppose most of your call traffic is to France and Germany, with occasional calls elsewhere. You might want to purchase unlimited calling for these two countries only.

What about Other Costs – Taxes, Fees and Set up?

With a traditional PBX office system, businesses are used to purchasing the hardware and setting it up themselves. You may also pay set up fees for each line you buy for users. You can forget about all of these expenses if you switch to a hosted VoIP service.

Most hosted VoIP vendors charge a fee per user per month. Some throw in all business features for one price while others offer specific bundles at various price points. Business plans can start as low as $20 per month. It can be hard to estimate the cost of upgrading to VoIP until you actually run the numbers. But expect to see a savings of 40% or more in your monthly bills!