Can VoIP really reduce business telephony costs?

Small businesses are constantly seeking to cut costs and become more efficient. This guide to VoIP from and purchasing adviser Indirectchannel explains how using voice over internet protocol (VoIP) can save money.

Since the luxury of negotiating bulk telephony rates is not available to small players, keeping costs down can be an uphill struggle.

What is VoIP?
VoIP is a technology that allows you to make voice calls using a broadband Internet connection instead of an analogue phone line.

According to studies released in 2006, over 60 per cent of small firms in the UK spend in excess of £300 a month on fixed-line calls and £400 a month on mobile phone calls.

Research also shows that small and medium-sized enterprises (SMEs) that switched over to VoIP experienced on average a 23 per cent reduction in overheads and a 13 per cent fall in IT expenses.

While the numbers may vary significantly depending on the size of your company, increased competition will continue to drive down prices.

VoIP providers
Popular UK providers that can meet the internet telephony needs of a small business include Skype, Call Union, PlusTalk, Vonage and Tesco. The greatest benefit of using these packages is that, where two locations are equipped with the same service, the calls will be free.

Initial charges vary according to the provider. For example, Vonage charges £7.99 monthly rental with a £9.99 set-up fee and £8.99 for equipment delivery. Calls are free to all landlines in the UK and Ireland.

Skype, the first IP telephony company, still offers the lowest prices for overseas calls to non-users, making it a useful choice for businesses with international clients.

Calls through Skype to fixed phones in the USA, France and Australia cost 1.2p a minute, and calls to landlines in India cost around 8.7p a minute.

WIth Skype, you pay a £2.24 monthly subscription and calls to landlines in the UK and Ireland are charged at about 1p per minute.

You can buy a USB cordless phone for less than £15 and also have incoming Skype calls forwarded to your mobile phone.

A standard BT landline – not a VoIP service – costs £10.50 a month plus £124.99 for installation of the phone line. Call charges vary depending on your payment plan.

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

Related Topics