Is VoIP Cheaper Than a Landline for Business?

If you are weighing the move, our business VoIP pillar covers the wider picture; this post focuses purely on the money.

How do VoIP and landline costs actually compare?

The short answer is yes — VoIP is almost always cheaper than a traditional business landline in the UK. The size of the saving hinges on your current setup: the number of lines, your call volumes, and what you spend maintaining on-premise hardware. A 10-user business often halves its telephony bill or better.

The table below sets out the typical monthly cost components for a representative 10-user business. Figures are illustrative ranges based on common UK tariffs, not live quotes.

That points to a monthly saving of £420–£720 for a typical 10-user site — a reduction of 60–80% on the telephony bill in this example.

What does a traditional landline really cost?

A traditional business phone system carries several costs that are easy to overlook individually but add up fast: line rental, channel costs, PBX maintenance, and per-minute call charges. Together these are what VoIP strips out.

• PSTN line rental: a basic BT business line costs approximately £18–£30 per month per line at typical UK 2026 rates.
• ISDN2 channels: approximately £25–£45 per month per basic rate interface (two channels).
• ISDN30 channels: approximately £8–£12 per channel per month, minimum eight channels, plus £50–£100 monthly rental.
• On-premise PBX maintenance: annual contracts typically run £500–£3,000 at market rates as of 2026, depending on system size and age.
• Call charges: business calls to UK mobiles are often 5–15p per minute on standard tariffs.

The UK's legacy voice network is also on borrowed time. According to Openreach, the analogue PSTN is being retired by 31 January 2027, after which these line types stop being sold or supported.

What does business VoIP cost instead?

The same 10-user business on a mid-tier hosted VoIP plan from £5.95 per user per month would pay from £59.50 per month. That single per-user fee bundles in the features a legacy system charges extra for, with no hardware contract attached.

A typical hosted plan includes:

• Cloud PBX with full features — call recording, auto-attendant, call analytics
• Unlimited UK landline and mobile calls
• A mobile and desktop app for every user
• An online management portal for moves, adds and changes
• No on-premise hardware and no maintenance contract

A hosted phone system replaces the box in your comms cupboard with software you manage from a browser.

Where does the VoIP saving actually come from?

The saving is not a discount on like-for-like — it comes from removing whole cost categories. Four things disappear: line rental, hardware maintenance, per-minute call charges, and engineer call-out fees. Each is a fixed line item on a legacy bill that VoIP simply does not have.

No more line rental

VoIP runs over your existing internet connection, so there are no separate phone lines to rent. The bandwidth each call consumes is negligible — roughly 100 kbps per concurrent call, a small fraction of a typical business broadband allocation.

No hardware maintenance

A hosted system has no on-premise PBX to insure, patch or repair. The cloud infrastructure is maintained by the provider, so annual maintenance contract costs vanish entirely.

Lower or inclusive call charges

Most hosted plans bundle unlimited UK landline and mobile calls into the monthly fee. On a legacy system, mobile-terminating calls billed per minute can quietly cost hundreds of pounds a month on a busy site.

No engineer call-out fees

Adding extensions, changing call routing or updating features on a traditional PBX often means a paid engineer visit. On VoIP, you make those changes yourself in the portal — no call-out charge for routine work. If you run multiple numbers or trunks, SIP trunking consolidates them onto one connection and cuts the per-line overhead further; at market rates as of 2026, SIP trunking typically costs 50–70% less than ISDN over a three-year term.

When might VoIP not save you money?

There are narrow scenarios where the immediate saving is smaller — chiefly very small offices, businesses that must buy new handsets, and sites needing a broadband upgrade first. Even then, the total cost over three years almost always favours VoIP once one-off costs are absorbed.

• Very small businesses (1–3 users): a single PSTN line at around £25/month may undercut a one-user VoIP plan on headline price, though the feature gap is large.
• Hardware replacement: if you need to replace every handset with IP phones, the upfront cost dents the first-year saving. Softphone apps on existing devices avoid it entirely.
• Connectivity upgrades: if your broadband needs upgrading to carry voice reliably, that reduces the net first-year saving.

Does the PSTN switch-off change the maths?

The cost comparison is increasingly academic, because the PSTN switch-off makes VoIP migration mandatory for every UK business regardless of the saving. Openreach is retiring the analogue network by January 2027, so the question is no longer whether to move but when. The saving, however, is real and worth claiming early.

Ofcom, the UK communications regulator, tracks the migration from analogue to digital voice as part of its market reporting. Businesses that move proactively — rather than waiting for a forced migration in their exchange area — typically secure better terms, keep their choice of provider, and avoid a rushed cutover. Our guide to the PSTN switch-off sets out the timeline and what to do first.