VoIP or a traditional phone system: which is right for your business?

Is a traditional phone system still an option?

Not for long. A "traditional" system means an on-site phone system connected to analogue or ISDN lines from BT or another provider. Openreach closes those lines on 31 January 2027 (confirmed again on 24 September 2026), and lines that haven't moved go onto a temporary emergency service from £35 a month wholesale (Openreach, reported by ISPreview). New analogue lines haven't been sold since September 2023.

That doesn't mean your existing hardware is automatically scrap. Many on-site phone systems bought in the last ten to fifteen years are IP-capable and can be connected to SIP trunks, which are digital phone lines delivered over your internet connection. If the system is supported, does what you need and has years of life left, keeping it on SIP can be sensible. If it's out of support, needs an engineer for every change, or can't give people calls on their mobiles, it's usually the moment to replace it.

So the useful question in 2026 isn't "VoIP or traditional?" It's "which way of doing VoIP suits us?"

Hosted, SIP trunk or on-premise: how do they compare?

The crossover point matters. With a hosted system you pay for every user, whether they take 50 calls a day or two a week. With SIP trunks you pay for simultaneous calls, and a team of 30 rarely has 30 people on the phone at once. That's why, for most businesses, SIP becomes the cheaper option at around 30 users. The exact crossover depends on how many users you really need and which features they use. If most of your team needs call recording, queues or contact centre tools, hosted can stay cheaper well past 30.

What are the real benefits of VoIP for a small business?

The brochure benefits are true, but the ones owners notice day to day are more specific.

Calls follow people, not desks. A site manager can answer the office number on a mobile app. Someone working from home can take a call on their laptop. When nobody picks up, the call goes to a hunt group (a set of phones that ring in turn), a colleague or voicemail that's emailed to the team, rather than ringing out.

You can see what's happening. Call reports show how many calls you missed, when your busy hours are and how long people wait. For a small business, missed calls are often lost enquiries you never knew about. Most cloud systems show this on a dashboard or wallboard, and you can record calls where you need to.

Changes take minutes. Adding a starter, changing out-of-hours routing for a holiday or setting up a new auto-attendant is done online, not booked with an engineer.

You can look bigger than you are. An auto-attendant ("press 1 for accounts") and queues let a team of eight answer like a team of eighty. Local numbers for other cities can ring through to your Glasgow office.

It works with Microsoft Teams. If your staff live in Teams, Teams Phone puts calls, chat and meetings in one app, managed alongside Microsoft 365.

Costs are predictable. You pay a monthly amount per user or per channel, instead of line rental, maintenance contracts and call-out charges. With legacy line rental roughly doubling through 2026 as Openreach raises wholesale prices (Openreach, July 2026), the gap is widening.

What does VoIP need to work well?

VoIP is only as good as the connection and network behind it. Each call uses roughly 100kbps in each direction, so bandwidth is rarely the issue on a modern connection. What causes poor quality is a busy or unreliable line, WiFi that drops out, and a network that doesn't prioritise voice traffic. The checklist is short:

• a business connection with enough upload capacity: full fibre or a leased line for bigger offices, SoGEA as a minimum
• a backup connection (a second line or a 4G/5G router) if losing calls for a day would hurt
• a firewall and switches set up to prioritise voice (quality of service)
• a check of anything else on your phone lines, such as alarms, lift phones and card terminals, before the old lines are ceased

Which option suits which business? Three illustrations

Example 1: a 12-person charity office. Most staff need a direct dial, a mobile app and access to a shared helpline queue with call recording. Fully hosted is almost certainly the cheapest and simplest option at this size.

Example 2: a 35-person construction firm. Ten office staff need queues and reporting. The other 25 are site managers and estimators who mainly need their calls to reach them on their mobiles. This is near the crossover, and SIP trunks with 3CX may well come out cheaper. It's worth pricing both.

Example 3: a 70-person business across three sites with a four-year-old IP phone system that's still under support. Connecting it to SIP trunks now and replacing it at the end of its life could be the lowest-cost route, as long as the system can be managed remotely.

These are illustrations, not quotes. In each case the answer comes from counting users, features and simultaneous calls.

What we see. Indigo supports three platforms, 8x8, 3CX and Microsoft Teams Phone, so we don't have to push everyone onto the same system. Every phone review we do prices both a fully hosted option and a SIP option, so you can see the crossover for your own numbers. We also supply and monitor the broadband and leased lines the calls run on, so call quality problems don't bounce between suppliers. SWG3, Falkirk Football Club and Wonderworld Group all run hosted telephony from us alongside their IT and connectivity. Hosted telephony →

What to do next

1. Count your users properly: who needs a phone licence, who only needs to take calls on a mobile, and who needs recording, queues or contact centre features.
2. Check your current system: age, support status and whether it's IP-capable. That tells you whether keeping it on SIP is realistic.
3. Check your connection and backup. See Leased line vs business broadband.
4. Get both hosted and SIP priced for your business. Ask for a free phone system review, sent within 2 working days.
5. Plan the switchover around the 31 January 2027 deadline. Start with the free PSTN switch-off check.