What is VoIP?

If you’ve ever made a phone call over the internet rather than through a traditional landline, you’ve already used VoIP, short for Voice over Internet Protocol. For UK businesses, it’s fast becoming the go-to communication solution, offering cost savings, flexibility, and powerful features that traditional phone systems simply can’t match.

With the UK’s Public Switched Telephone Network (PSTN) already in a stop-sell phase since late 2023 and scheduled for full switch-off in January 2027, VoIP is no longer just an option; it’s the future of business communication. This guide will walk you through what VoIP is, how it works, its pros and cons, the costs involved, and how to choose the right system for your business.

How Does VoIP Work? 

Instead of transmitting your voice over traditional copper telephone wires (as with a standard landline), VoIP technology converts your speech into small packets of digital data and sends them over the internet. This allows calls to travel quickly, efficiently, and often at a fraction of the cost of conventional phone systems.

The process in simple terms:

1. You speak into your phone or headset.
2. The sound is converted into digital packets.
3. These packets travel over your internet connection.
4. The recipient’s device converts them back into sound.

This all happens in milliseconds, so it feels just like a normal phone call, only smarter and often cheaper.

Types of VoIP Services 

VoIP isn’t a one-size-fits-all solution. UK businesses can choose between different service models depending on their size, budget, and technical needs. The two most common options are Hosted VoIP and On-Premise VoIP. Understanding the difference is key to making the right decision for your organisation.

Hosted VoIP

• Managed by a third-party provider – All infrastructure, maintenance, and updates are handled off-site, so there’s no need for in-house technical expertise.
• Minimal setup – Ideal for small and medium-sized enterprises (SMEs) that want to get started quickly without large capital investment.
• Subscription-based pricing – You typically pay a fixed monthly fee per user, which covers calls, features, and support.

On-Premise VoIP

• Equipment hosted at your office – Servers and hardware are physically located on-site, giving your IT team direct control.
• Greater customisation and control – Perfect for businesses with complex requirements, multiple departments, or high compliance standards.
• Higher upfront costs – While the initial investment is larger, long-term costs can be lower for bigger organisations with dedicated IT support.

Key Features of VoIP Systems 

One of VoIP’s biggest advantages is the extensive range of features it offers, often included at no extra cost compared to traditional phone lines. Many of these capabilities, such as call recording, voicemail-to-email, and video conferencing, would typically require expensive add-ons or separate services with a conventional system, but come built-in with most VoIP packages.

Core features to look for:

• Voicemail-to-email – Listen to messages directly from your inbox.
• Call forwarding – Redirect calls to mobiles or other locations.
• Auto-attendant/IVR menus – Professionally route callers to the right department.
• Video conferencing – Built-in tools for virtual meetings.
• Call recording – Useful for training and compliance.
• CRM integration – Syncs call logs with customer records.

For many UK SMEs, these features would cost extra with a traditional PBX but are often bundled in with VoIP subscriptions.

Benefits of VoIP for UK Businesses 

• Lower costs – VoIP services are typically far cheaper than traditional phone lines, with reduced line rental fees and low-cost or free calls, especially for international and long-distance connections.
• Flexibility – Make and receive calls from anywhere with a stable internet connection, whether you’re in the office, working remotely, or travelling abroad.
• Scalability – Easily add or remove lines and users as your business expands, restructures, or operates seasonally, without costly infrastructure changes.
• Advanced features – Access tools such as call recording, voicemail-to-email, auto-attendants, and video conferencing, all included in most VoIP packages at no extra cost.
• Integration – Seamlessly connect your VoIP system with CRM software, helpdesk platforms, and other business tools to streamline workflows and improve customer service.

Cost Breakdown of VoIP in the UK 

One of the first questions UK business owners tend to ask is: “How much will VoIP cost me?” The good news is that VoIP can be tailored to suit different budgets, and in most cases, it works out significantly cheaper than traditional phone systems.

While exact costs vary depending on the provider, package, and features you choose, here’s a general guide to what you can expect:

• Monthly subscription: £8–£20 per user, often including unlimited UK calls and a suite of advanced features.
• IP desk phone: £40–£150 one-off purchase, though many businesses opt for a softphone app or headset instead.
• Headsets: £25–£80 depending on quality, noise cancellation, and comfort.
• Installation/setup: Frequently free with hosted VoIP packages, while on-premise systems may require a higher one-time setup cost.

💡Tip: Compare this to a BT landline, where line rental alone can exceed £20 per month, and that’s before you factor in per-minute call charges. For teams making frequent or long-distance calls, VoIP can deliver substantial savings over time.

Potential Downsides to Consider

While VoIP brings plenty of advantages, it’s important to be aware of its limitations so you can plan accordingly and avoid service disruptions.

• Internet dependence – VoIP relies entirely on your broadband connection. If your internet service goes down, your phone system will also be affected unless you have a backup connection or mobile failover in place.
• Power outages – Unlike traditional analogue lines that can still function during a power cut, VoIP phones need electricity to operate. Without a backup power source, such as an uninterruptible power supply (UPS), your service will be unavailable.
• Quality issues – Poor broadband speed, high latency, or unstable connections can result in lag, echo, or dropped calls. This is why having a reliable, high-speed internet service is essential for a smooth VoIP experience.

VoIP vs Landline: Which Should You Choose? 

How to Choose a VoIP Provider in the UK 

Selecting the right VoIP provider is a crucial decision that can directly impact your call quality, system reliability, and the level of customer support you receive. The right choice ensures smooth day-to-day communication, while the wrong one can lead to frustrating downtime, poor audio, and missed business opportunities.

Key factors to compare: 

• Pricing model – Per user vs. per minute.
• Features included – Avoid paying extra for essentials like call recording.
• Support – UK-based support during your business hours.
• Ofcom compliance – Especially for emergency call routing.
• Reviews – Check other UK businesses’ experiences.

Common mistakes to avoid: 

• Choosing solely based on the cheapest price.
• Ignoring your internet speed requirements.
• Overlooking the importance of training and support.

UK-Specific Considerations 

When implementing VoIP in the UK, there are a few important factors to keep in mind to ensure a smooth transition and long-term reliability:

• Broadband speed – Aim for at least 10Mbps download and 1Mbps upload per line to maintain clear audio and minimise call drops. If your business uses other data-heavy applications, you may need higher speeds or a dedicated VoIP connection.
• Regulations – UK VoIP providers must comply with Ofcom requirements, including the ability to make 999 emergency calls. Be sure your chosen provider meets these standards and clearly explains how emergency services are handled.
• Number portability – In most cases, you can keep your existing business number when switching to VoIP, avoiding the need to reprint marketing materials or inform customers of a number change.
• Future-proofing – With the UK set to phase out PSTN lines entirely by January 2027 and the stop-sell already in place since late 2023, moving to VoIP now ensures you’re prepared well in advance and avoids last-minute disruption.

How to Switch to VoIP 

Making the move to VoIP can be straightforward with the right preparation. Following a clear step-by-step plan will help you avoid downtime and ensure your team gets the most from your new system.

Steps to get started: 

1. Check your broadband speed – Test your internet connection to ensure it meets VoIP requirements. A stable, high-speed connection is key to clear calls and reliable service.
2. Choose a provider – Compare pricing, included features, scalability options, and customer support. Look for UK-based providers with a proven track record.
3. Select equipment – Decide whether you’ll use IP desk phones, headsets, or a softphone app on your computer or mobile device. The right setup depends on your team’s work style.
4. Migrate your number – Arrange to keep your existing business number for brand consistency and to avoid confusion among customers. Your provider should handle most of the process.
5. Train your team – Provide basic training so staff can confidently use new features like call forwarding, conferencing, and voicemail-to-email.

Future of VoIP in the UK 

VoIP technology continues to evolve rapidly, and the future holds even greater potential for UK businesses looking to enhance communication and reduce costs. As digital infrastructure improves and new innovations emerge, expect to see:

• AI-powered call analytics – Advanced tools that analyse conversations in real time, helping businesses improve customer service, identify sales opportunities, and streamline call handling.
• Tighter integration with business software – Seamless connections between VoIP systems, CRM platforms, and collaboration tools like Microsoft Teams or Zoom will make workflows more efficient.
• Improved call quality – Ongoing upgrades to the UK’s broadband and mobile networks will lead to clearer audio, faster connections, and fewer dropped calls, even in remote areas.

With the PSTN switch-off set for January 2027 and the stop-sell having begun in late 2023, now is the perfect time for UK businesses to adopt VoIP. Acting early allows you to benefit from the latest features, avoid last-minute migrations, and stay ahead of competitors still relying on outdated phone systems.

Conclusion 

VoIP is no longer a futuristic concept; it’s a practical, cost-effective, and future-ready solution for UK businesses of all sizes. With the right provider and a stable internet connection, you can enjoy crystal-clear calls, flexible working arrangements, and a rich set of features that make communication easier, smarter, and more affordable than ever before.

By making the switch now, you can streamline operations, reduce overheads, and prepare your business for the upcoming PSTN switch-off in January 2027. Since the stop-sell has already been in place since late 2023, don’t wait until you’re forced to change; start exploring your VoIP options today, compare providers, and position your company ahead of the competition.

Summary Points 

• VoIP sends voice calls over the internet instead of traditional phone lines.
• It offers lower costs, more features, and greater flexibility for UK businesses.
• A reliable broadband connection is essential for quality calls.
• UK PSTN lines will be phased out by January 2027, with the stop-sell already in effect since late 2023, making VoIP a smart long-term choice.
• Switching is simple with the right provider and planning.

FAQs

Q1: Can I keep my existing business number with VoIP?
A1: Yes, most UK VoIP providers allow you to port your existing number.

Q2: Is VoIP cheaper than a landline?
A2: Generally, yes, especially for long-distance and international calls.

Q3: Will VoIP work during a power cut?
A3: Not without a backup power source, unlike traditional landlines.

Q4: Do I need special equipment for VoIP?
A4: You can use IP phones, headsets, or even your existing smartphone with the right app.

Q5: Is VoIP secure?
A5: Yes, if you choose a provider that uses encryption and follows security best practices.