20/02/2025

What is a VoIP Phone System, How Does It Work, & Why Get It?

Traditional phone lines are disappearing--here's what your business must do next.

Why are thousands of UK businesses switching to VoIP phone systems? The answer is simple: traditional phone lines are being phased out. Why? Because businesses need a more flexible, cost-efficient solution. If your organisation still uses analogue or ISDN telephony, you may run into higher costs, limited scalability, and potential service disruptions.

How does VoIP solve these challenges? VoIP phone systems use the internet rather than old infrastructure. This change leads to better call quality, lower costs, and greater mobility. Plus, they aren't limited by traditional landlines.

What's next? To prevent disruptions and take advantage of modern business communication, you should learn how VoIP works. It's essential to see what makes it unique and why it's the best choice for your business.

This guide provides the clarity to transition smoothly and keep your business connected in a world without landlines . . .

Why Are UK Businesses Moving to VoIP?

The transition to VoIP is more than just an upgrade--it is becoming a necessity. BT Openreach will phase out PSTN and ISDN networks by 2027. So, businesses must switch to digital options before these traditional services are withdrawn.

Key reasons for the shift include . . .

Regulatory Changes & The PSTN Switch-Off

Cost Savings & Operational Efficiency

  • Businesses that switch to VoIP can reduce telephony costs by up to 60% compared to traditional phone systems. This is because VoIP eliminates the need for separate landlines, reducing rental fees and maintenance costs.
  • Several VoIP providers offer unlimited calls to UK landlines and mobiles. This can cut costs for organisations that make many calls.
  • Cloud-based VoIP systems let companies manage calls from anywhere. This reduces the need for on-premise PBX hardware and simplifies IT infrastructure.

Scalability & Business Flexibility

  • VoIP allows businesses to grow or shrink easily. They can add or remove users as needed without the expense of new hardware.
  • As hybrid and remote work become the norm, VoIP keeps employees connected. They can now communicate from the office or wherever they work that day.
  • VoIP offers advanced features like call routing, virtual numbers, and cloud-based call logs. These tools help businesses easily adapt to their changing needs.

What is a VoIP Phone System?

A VoIP phone system is a digital solution for making and receiving calls. It allows businesses to use the internet instead of old landline systems. It works by converting voice signals into digital data packets. These are then transmitted over a broadband connection and reassembled into audio at the receiving end (more on that below). Unlike analogue PBX systems, VoIP offers lower costs, enhanced mobility, and scalability. This makes it a future-proof alternative for UK businesses preparing for the 2027 PSTN switch-off.

How Does a VoIP Phone System Work?

A VoIP phone system converts voice signals into digital data. It then transmits them over an internet connection and reconstructs them into sound at the recipient's end. VoIP is different from traditional landline calls in that it doesn't use copper wires or physical exchanges. Instead, it runs over broadband. This makes communication cheaper and easier to expand.

The process can be broken down into three key steps . . .

1. Voice Conversion

Transforming speech into digital data.

  • When a user speaks into a VoIP-compatible device, the system captures the voice signal and digitises it into data packets. This transformation is essential for transmitting sound efficiently over the internet.
  • The system reduces the size of these packets using compression techniques, such as G.711 or G.729. Smaller packets mean faster transmission and less bandwidth use. This helps businesses keep call quality high, even with many calls simultaneously.
  • Without digital conversion, voice data may be interrupted or lost, affecting audio quality. VoIP technology guarantees clear and reliable voice transmission, no matter where users are.

2. Data Transmission

Sending packets across the internet.

  • After conversion, data packets are sent via the business's broadband to the recipient's device. VoIP works differently from traditional phone lines. Instead of using physical circuit switching, it sends calls through the fastest and best internet paths.
  • Packet-switching technology divides voice data into packets. These packets take different paths and come together at the receiver's end. This process enables low-latency communication, minimising delays and improving overall call quality.
  • Many VoIP providers use Quality of Service (QoS) settings to keep calls stable. These settings prioritise voice data over other internet traffic. Businesses can also use dedicated VoIP broadband connections. This helps keep service running smoothly, even during busy times.

3. Audio Reconstruction

Converting data back into speech.

  • Once the data packets reach the recipient, they are combined in real time. This restores the original voice message with little delay. Advanced error correction algorithms compensate for packet loss, ensuring a smooth conversation.
  • Modern VoIP systems use high-definition (HD) voice codecs, which offer richer audio quality than standard phone calls. They also eliminate background noise and enhance clarity, making business communications more effective.
  • VoIP technology uses echo cancellation and jitter buffers. These help reduce issues like distorted voices and audio lag, allowing conversations to flow smoothly without technical interruptions.

Common Features of a VoIP Phone System

A VoIP phone system goes beyond basic call handling by offering businesses a set of powerful tools. These tools boost efficiency, simplify communication, and enhance customer experience.

Call Routing & Forwarding

Seamless communication anywhere.

  • VoIP allows smart call routing. This means incoming calls go straight to the right person or department quickly. This reduces wait times and enhances customer satisfaction.
  • Businesses can set up custom call forwarding rules. This lets employees get calls on desk phones, mobile devices, or softphones, depending on their availability. This feature is great for remote and hybrid teams. It ensures that every critical call gets answered.
  • Call routing options include . . .
  • Geographic Routing: directs calls based on where the caller is.
  • Time-Based Routing: adjusts calls according to business hours.
  • Skill-Based Routing: connects customers to the best-qualified team members.

Auto-Attendants & IVR Systems

Professional call handling.

  • An Interactive Voice Response (IVR) system acts as a virtual receptionist. It directs callers through a structured menu. This eliminates the need for a human operator and allows customers to reach their intended destination faster.
  • Businesses can create multi-layered IVR menus. These help callers with self-service options, FAQs, and direct transfers to the right departments. This improves efficiency for customer support teams and sales inquiries.
  • Many modern VoIP solutions have AI voice assistants that can understand natural language queries. This reduces manual work and improves caller experiences.

Voicemail-to-Email & Call Recording

Heighten your productivity.

  • Voicemail-to-email turns voice messages into digital audio files and writes them out as text. This allows employees to access voicemails from anywhere, improving response times.
  • Call recording is a crucial feature for compliance, training, and quality control. Businesses can keep recorded calls safe in the cloud. This ensures they have precise records for customer disputes or to comply with regulations.
  • VoIP platforms give you detailed call analytics. This includes information on call durations, response rates, and the busiest calling hours. This data helps businesses refine their communication strategies and enhance customer service performance.

Future-Proof Your Business with VoIP

Stay ahead of the UK's digital shift--make the switch now.

The transition from traditional landlines is not a distant possibility--it's happening now. As the UK phases out PSTN and ISDN, businesses must adapt to avoid service disruptions and unnecessary costs. A VoIP phone system gives businesses the flexibility, cost savings, and advanced features they need to compete.

Upgrade your business communications today. With Treken's expertise as a Gold 3CX Partner, we ensure a smooth, disruption-free migration to VoIP with full support every step of the way. Limited availability for consultations - act now!

Call 01202 612 333 today or contact us to discover how Treken can future-proof your communication system.