Is VoIP Cheaper Than a Landline for Businesses?

If you are weighing the move, start with the business VoIP pillar for the full picture, then use this page to pressure-test the numbers.

Is VoIP actually cheaper than a landline?

Yes — in almost every realistic business scenario VoIP costs less than a landline. PSTN line rental is a fixed monthly charge per channel before you make a call, while VoIP bundles inclusive calls into a single per-user fee. Once you account for line rental, ISDN channels and per-minute charges, the gap widens fast.

Here is the core comparison most UK buyers care about:

The landline column is shrinking by design. Openreach is withdrawing the PSTN, so paying to maintain legacy lines is paying to keep a service with a published end date.

How much can a business save by switching to VoIP?

Most UK businesses save 40–60% on total telephony spend after moving to VoIP, and some report reductions of up to 75% once inclusive calls replace per-minute ISDN charges (typical UK 2026 ranges). The saving comes from removing line rental, consolidating providers, and scaling users in software rather than via engineer visits.

A worked example makes it concrete. A 20-user business paying around £600 a month on ISDN line rental and call charges could expect to land in the £200–£300 range on a comparable hosted VoIP plan with calls included. Small businesses typically see 25–50% lower costs than the equivalent traditional setup.

Where the saving lands depends on three things:

• Call volume — heavy outbound callers gain most from inclusive minutes.
• Number of sites — multi-site firms stop paying per-line at every location. See multi-site VoIP for how that consolidates.
• Existing connectivity — if you already run business broadband or a leased line, VoIP adds no new line cost.

Are there any costs where a landline wins?

Rarely, and the exceptions are narrow. A landline needs no internet connection, so in theory a single-line, very-low-call-volume premises with no broadband avoids a connectivity cost. In practice almost every business already pays for internet to run email, Microsoft 365 and cloud apps, which makes that "saving" theoretical.

The honest position: for a one-line site that barely makes calls and has no internet, a basic landline can look marginally cheaper on paper. For everyone else — anyone with staff, multiple lines, or existing broadband — VoIP matches or beats the landline once inclusive calls are counted. And the comparison is academic anyway once the PSTN is gone.

What is the PSTN switch-off and why does it change the maths?

The Public Switched Telephone Network (PSTN) — the copper phone network behind traditional landlines and ISDN — is being retired. Openreach's published target for completing the migration is 31 January 2027, after which voice services move to IP (VoIP) by default (Ofcom).

This reframes the whole cost question. You are not choosing whether to keep a landline versus adopt VoIP — you are choosing whether to migrate on your own timetable or be forced onto it. As of 2025, 31% of UK businesses had already switched to VoIP (2025 UK data), and the majority of UK landlines have been upgraded to digital. Migrating early means you control the project, test the setup, and capture the savings sooner rather than scrambling against a deadline.

Do I need to buy new phones to switch to VoIP?

Not necessarily. VoIP softphones run on the computers and mobiles your team already use, at zero hardware cost. If you prefer physical desk phones, IP handsets range from around £50 for basic models to £150 for feature-rich units (typical UK 2026 prices) — a one-off cost, not the recurring PBX maintenance a landline system demands.

Many businesses skip handsets entirely. With Microsoft Teams Phone, most users make and take calls straight from a laptop or phone. If you already pay for Microsoft 365, running Teams as your phone system is often the lowest-friction route — Microsoft 365 Business plans start at £4.60/user/mo (Basic), £9.60 (Standard) and £16.90 (Premium) ex VAT on an annual commitment (Microsoft), with a Teams Phone licence added on top to enable external calling (Microsoft Teams Phone).

What hidden costs should you check before switching?

The headline per-user price is rarely the whole story. Poor communication already costs businesses real money — roughly 1 in 5 business leaders say they have lost a deal because of it (2025 UK data) — so the goal is a system that is cheaper *and* better, not a cut-price setup that drops calls.

Watch for these line items when you compare quotes:

• Number porting — moving existing numbers; usually a small one-off fee.
• Call bundles vs pay-as-you-go — confirm what "inclusive" actually covers.
• Connectivity quality — VoIP voice quality depends on your internet; congested broadband causes jitter.
• Security — VoIP is internet-facing, so it needs protection like any other service. Read VoIP security before you go live.

A genuine like-for-like comparison counts line rental, call charges, hardware, support and porting together — not just the sticker price per user.

Why does AMVIA recommend a hosted VoIP system?

For most UK SMEs, a hosted phone system gives the cleanest cost and lowest risk: no on-site PBX to maintain, predictable per-user pricing, and a setup that scales with headcount instead of engineer call-outs. It also aligns your voice estate with the same Microsoft tooling AMVIA already secures.

The differentiator matters here. With AMVIA you get one provider accountable for connectivity, voice and the security wrapped around it — Microsoft-certified engineers configuring it, and a security-first posture by default. That removes the finger-pointing that happens when telephony, IT and security all sit with different suppliers.