8th June 2021

The Basics of Telephone Systems: Analog vs. VoIP

A lot of people go through their busy lives using technology without understanding how it works. They do not have time to sit down and try to figure out the ins and outs of complicated devices. However, suppose you are making decisions about telephone equipment for your business. In that case, you may find you need at least some basic understanding of what options are available and how each system works.

A quality telephone system is a must for any business. Our goal is to supply you with the basic understanding of telephone systems needed to find the best communications solution for your company. 

This article will compare two of the major phone systems available in today’s market: analog and VoIP.

But first, a little background.

A Brief History of the Telephone

Analog phone systems are built on standard copper wires and POTS (plain old telephone services) and have been servicing businesses since the early 1900s. This wired network turned into what is now the Public Switched Telephone Network (PSTN). According to Toolbox:

The first phones were wired into a local exchange that was wired together with trunks. As phone networks grew, so did the demand for clear voice calls. Equipment and network configurations had to determine the growing capacity to deliver high quality of service. Network operators took on the assignment of building phone networks and services to consumers. The Bell Telephone Company was the first company to be incorporated into the PSTN.1

In the 1960s, phone service began to move toward digitalization when automated switching replaced manual switching by telephone operators. Toolbox further states:

Digital phone systems are mainly used in business applications as home, and private users most often elect to switch to mobile phones rather than using VoIP.  A typical digital phone system comes with a certain number of lines, with the option of adding more as a business grows. Direct line, extensions, key entry recognition for inbound calls, and internal paging are some to the typical features associated with a digital phone system.2 

The Three Types of Telephone Service Systems

1) Analog

An analog phone system is what is called the traditional landline, which a local telephone company installs. This system is often referred to as POTS and is the same service we have known for more than a century.

This system transmits sound using electrical impulses over a copper wire that connects to the telephone service provider. Calls can only travel wherever wires have been installed and are subject to bad weather and costly long-distance charges.

Many businesses that use analog phones set up a Private Branch Exchange (PBX). A PBX allows users to communicate within the company and the outside world.

2) VoIP

Voice over Internet Protocol (VoIP) uses an existing internet connection to place phone calls. This system is also called “digital phone service” or “hosted phone service” and works by changing sound into data packets sent to a VoIP provider. The provider then directs the call to the PSTN.

The only equipment needed for a VoIP system is a computer, laptop, or cell phone. Because of super-fast internet connections, phone calls happen in milliseconds. You can additionally integrate tools and softwares like auto dialer with your VoIP system to reduce the connecting time with potential clients. Moreover, add-on applications can also provide features like voice broadcasting or robo dialer that can be switched to live agents if demanded by a customer (check it out here for more information).

3) SIP Trunking

Session Initiation Protocol (SIP) trunking is a more complex system that provides phone communication over an existing PBX from a VoIP provider. SIP trunking requires advanced technical skills to operate. If your company has an existing PBX and you wish to add the scalability and reliability of the cloud, this system might be the best solution for you. 

However, for this article, we will not be discussing SIP trunking any further. If you want more in-depth information on this subject, click here.

Now, let’s compare the analog phone system to the VoIP system.

Comparison of Analog and VoIP Phone Services

The Benefits of Analog 

In some cases, an analog phone system may be the best solution for your company. Landlines offer:


Our country has millions of miles of copper wires that have been installed over the past 140 years. This massive telecommunications infrastructure was built for reach-and it works.

No Bandwidth Required

Five percent of the country’s population has little or no access to broadband. While this percentage seems low, in actual numbers, that is 16 million people. A digital phone service for a small office will require at least 100 Kbps per line, which is more bandwidth than is available in certain regions.


Analog phones are cheaper than IP phones. These more affordable phones are often used for common areas such as lobbies, employee break rooms, and waiting rooms. Also, they can be installed in areas that are not used often, like maintenance closets, warehouses, and field offices.

  • Low and easy maintenance
  • Simple to use
  • Minimal setup required

The Disadvantages of Analog

  • Low scalability without the addition of a PBX
  • Expensive long distance fees
  • Inevitable service disruptions due to bad weather or equipment breakage, or failure

The Benefits of VoIP

Approximately 30 percent of today’s businesses use VoIP phone systems. The vast majority of these companies have less than 50 employees. Here is why so many small businesses have chosen VoIP:

Increased reliability

With VoIP, you will have calls without busy signals or static. You can adjust your call flow. Should you experience an internet or power outage, you can redirect calls to your cell phones.

Greater flexibility

VoIP technology allows you to work almost anywhere-from your home or a vacation spot. Your work number is private, secure, and goes wherever you go.

Lower costs

To use VoIP, all you need is a computer or a mobile device. There are no installation fees and no bulky equipment to purchase. And monthly service rates are low.

Premium business features

VoIP has superior business features that include:

  • Auto attendants
  • Automatic call routing
  • Call forwarding
  • Call recording
  • Text messaging
  • Video conferencing

Better sound quality

Quick installation

The Disadvantages of VoIP

Emergency calls

Emergency 911 services could be curtailed because responders may not be able to find the physical location of the call.

Security threats

VoIP is susceptible to the same security threats that are inherent to the internet.

Internet failure 

Internet failure or power outages will crash all communications.


Both the analog and VoIP phone systems require the help of professionals to install. However, in general, analog systems need more configuration than cloud-based systems. On the other hand, the initial outlay of money is probably less costly than a VoIP system. As you make your final decision, consider the following:

  • Are you looking to control costs?
  • Do you see your business expanding in the near future?
  • What features does each system support?
  • How can your company save time and increase productivity?
  • How can you provide the best experiences for your employees and customers?

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1,2 Analog vs. Digital Phone Systems

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