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What is a VoIP phone system? Benefits, types, FAQs, and more

What is VoIP phone

As technology evolves, communications solutions should also. Streamlining your communication and saving time on routine tasks is where a Voice over Internet Protocol (VoIP) phone system for your business can shine. But what is VoIP phone service? What types of VoIP phones exist and how do they work?

If your head feels muddled with confusing terminology, you’ve come to the right place. Here, we’ll outline the VoIP basics you need to know to prepare your business for communications success. Let’s get started.

What is a VoIP phone system?

A VoIP phone system allows you to make voice phone calls using a wireless internet connection instead of traditional plain old telephone service lines (POTS). VoIP is available in the form of either hardware or software programs. Software-based IP phone systems are compatible with any internet-enabled supported device, from your iPhone to your laptop computer. That makes them, hands-down, one of the top solutions for doing business on the go.

VoIP phone systems also require minimal equipment to get up and running. Their superior call quality over traditional phone systems gives them a cutting-edge service. Additionally, premier VoIP providers like OpenPhone offer extra features you won’t find with standard telephony services, including the ability to set business hours, share phone numbers with teammates, and easily forward your voicemails to email.

What are the types of VoIP phones?

If you’re making the leap to VoIP, you’ve got some decisions to make. There are several different kinds of VoIP phones you can choose from, depending on your business needs, budget, and other requirements. To completely integrate your new internet phone system into your workplace, you need to ensure your setup works for you and your team. 

Here are the main types of VoIP phones:

Hard phones

Hard phones are probably what come to mind when you imagine traditional phone systems. But there are several different kinds of hard phones to explore.

Desk IP phones

Desk IP phones are generally connected to computers to maximize connection strength, since they’re usually anchored to one location anyway. Most desk phones allow you to view caller ID and other features on a small screen. Desk phones work as standard phones, in call centers, or as receptionist phones. They’re a versatile option, combining the best of traditional and VoIP telephony.

Wireless phones

Otherwise known as handsets, wireless phones allow you to move around during your voice calls. They don’t tether you to a specific wire or computer. As a result, wireless phone connections can be spotty if you happen to wander out of reach of a strong WiFi connection. Their convenience is worth it in some office settings, however. Wireless phones allow you to take a phone call from wherever there’s a hotspot — they may be a good fit for office pacers or teammates constantly bouncing around from colleague to colleague.

Conference phones

If you plan to host multiple people on a conference call, it’s best to have the proper tools for the job. Conference calls can get especially confusing with multiple people on the line. A phone set specifically designed for conference calling can help mitigate these issues by electronically balancing the line. That way, everyone can hear and speak to each other without issues. However, for hybrid and remote working teams, they’re far less convenient than more modern business phone options. 

USB phones

USB phones are quite aptly named. To use a USB phone, you plug it into your device using a USB cable. These are a popular option to help stabilize your softphone connection.


The opposite of hard phones are softphones. But what is VoIP phone software and how does VoIP work? You can install a softphone on a device by downloading a VoIP provider’s software application. This application gives you access to a virtual phone number that can be used like a normal phone but isn’t tied to any particular geographic location.

Softphones are OpenPhone’s bread and butter. They allow you to get the most from your device capabilities. You can also easily juggle multiple softphone numbers without actually having to juggle multiple phones. Softphones on our platform let you easily call and text from your computer or smartphone, but they work remarkably well in nearly any circumstance (as long as your WiFi connection is strong).

Softphones are an excellent, affordable way to connect your teammates and clients. We’ll explore more of their advantages, so keep reading.

How do VoIP phone systems work?

Diagram showing how VoIP phone systems work

Rather than transmit your voice data through copper wires like POTS lines do, VoIP phone systems take a different approach. VoIP systems break your voice data down into digital signals known as “packets.” The system then compresses these packets and sends them between IP addresses via your VoIP provider.

Once the voice packets reach their final destination, they’re uncompressed and the person on the other end of the line hears your voice.

This whole exchange occurs repeatedly and in a matter of milliseconds. Glitches may occasionally occur in the form of jitter or other disturbances. Most of the time, though, any VoIP connection issues are due to poor internet connection rather than inferior VoIP service. That’s why it’s especially important to invest in strong broadband internet before setting up a VoIP phone system.

The strength of your internet service can single-handedly determine whether VoIP is a viable option for your business communications setup.

What are the advantages of using a VoIP phone system? 

When you sign up with a VoIP service provider, you’ll want to know what value you’re getting for your money. Some of the chief advantages of using VoIP phone systems are:


A key advantage of a VoIP phone system is that it’s easy to scale up alongside your business. Adding new users doesn’t mean purchasing fancy new hardware or installing new phone lines. 

You can expect a slight increase in your monthly bill, or perhaps you’ll need to purchase a new mobile phone if you don’t plan to use an existing one. With OpenPhone’s VoIP service, your teammates can use their personal cell phones without experiencing disruptions in work-life balance (thanks to our business hours features).

No matter how much growth your business experiences, a solid VoIP service will be by your side through it all.

Low cost 

The price for regular phone service keeps skyrocketing each year. AT&T has even been accused of raising prices more than 150% over the course of a decade. That’s because the cost to maintain outdated infrastructure continues to rise. Telephone companies aren’t too eager to invest in this dying form of telephony, either.

The UK is poised to completely eliminate this infrastructure within the next couple of years, and the US and other nations aren’t far behind.

Instead, take advantage of the top alternative to POTS lines: VoIP. Because VoIP phone systems route calls through your internet connection, you can avoid ridiculous fees.

You’ll be responsible for paying a monthly bill to your VoIP phone service, which is usually determined by the number of users and call volume. All in all, VoIP is a much more cost-effective solution than traditional analog telephone service.


It might surprise you to learn that IP telephony has superior call quality when compared to its competitors. What is VoIP phone’s advantage? The copper wires used by traditional telephony tend to exhibit connectivity issues, especially as they age.

With an adequate internet connection, your VoIP call quality will always be a clearer alternative when it comes to voice and video calls.


Business doesn’t just happen in the office anymore. Work-from-home arrangements and international business have made it crucial for companies to implement more flexible communication plans. As long as you have the necessary internet bandwidth, you can chime into company discourse from anywhere on the planet with the help of VoIP technology.

Users can connect to VoIP phone systems via both mobile devices and desktops, making it a versatile communications option. You’ll never again have to worry about missing incoming calls because you stepped away from your office phone for a couple of minutes.


VoIP phone system providers like OpenPhone have a dazzling array of features you won’t find with traditional telephony. There are the standard call forwarding and voicemail features, but beyond that, it’s a whole new ballgame.

Enjoy instant messaging with your teammates, shared phone numbers and address books, and customizable business hours.

How do the types of VoIP phones compare

As we discussed earlier, there are several types of VoIP phones. When it comes to the best solution for your business, you’ll need to weigh the pros and cons of each phone type against your business needs.

In our experience, you’ll need a pretty compelling reason to justify buying clunky desk phones when streamlined mobile options are so much easier and forward-thinking. If you plan on hosting a lot of conference calls where a large team sits inside a conference room, conference phones could be a worthwhile investment.

And if your WiFi connection isn’t up to par as you make the transition, the wired connections of ethernet cables and USB phones could prove useful.

Each use case is highly personal. But we recommend first trying out an entirely mobile setup (with desktop access included) to fully take advantage of the perks of VoIP telephony. OpenPhone’s VoIP system works beautifully with this setup.

How to get a VoIP phone number

Are you ready to sign up for a VoIP service and start using your new VoIP phone number? First, you’ll need to choose a provider. Some businesses like using Google Voice and other similar, free apps when first starting out. But these aren’t sustainable business choices. They simply don’t offer the functionality and customer support that OpenPhone does. Plus, OpenPhone makes it easy to sign up for a VoIP phone plan.

Here’s how to get a business phone number with OpenPhone in three easy steps:

1. Create an OpenPhone account

Opening an OpenPhone account is simple. Choose an email login or sign in with your Google account.

2. Choose your phone number

You can enter the area code or toll-free area code you wish to use. Our system will let you know if it’s available so you can pick a specific number.

3. Customize your business settings

One of our favorite OpenPhone features is the ability to customize your business settings, from auto-recording settings to auto-attendant. No two businesses look alike and neither do the business settings of any two OpenPhone accounts.

How to configure IP phones locally and remotely

Depending on the VoIP setup you choose, you’ll find yourself configuring your IP phones either locally or remotely.


Setting up an in-office or at-home VoIP phone system doesn’t have to be complicated. Your new phone system will probably look pretty similar to your old one if you opt for a hard phone setup. You’ll need a private branch exchange (PBX) installed before you can hook up your phones. (Hint: Make sure they’re IP or SIP phones compatible with VoIP.) 

After that, you may have to make a few final adjustments to your router and install your VoIP software before your system is up and running. Working with hard phones means you’ll probably be responsible for setting up, maintaining, and updating all equipment on-premises.


With VoIP softphones, things are easier. For starters, IP phones aren’t necessary. Some VoIP providers manage and host any equipment you use off-site, while others (like OpenPhone) keep everything (beyond the computer or phone you use) in the cloud.

You just need to download VoIP software in the form of a mobile or desktop application and you’re good to go. You can also complete future app updates with the tap of a button.

How do you set up a VoIP phone system?

Ready to take the plunge but don’t know where to begin? You can learn how to set up an office VoIP phone system in seven easy steps:

1. Test your connection

Make sure your bandwidth and broadband speeds are strong enough to accommodate WiFi calling. The Federal Communications Commission (FCC) recommends a minimum download speed of less than 0.5 Mbps for VoIP calls.

Try out a VoIP speed test to assess your upload and download speeds. If they aren’t adequate, you’ll need to upgrade internet service to enjoy a fully functional VoIP experience.

2. Choose your hardware

Choose between VoIP headsets, adapters, and softphones, depending on your business needs.

3. Narrow down VoIP provider options

With so many providers on the market, choosing a VoIP provider can be difficult. Focus on things like cost, features, user interface, and customer service (OpenPhone is a standout option in all of these categories).

4. Choose or port a business phone number

Once you’ve selected your VoIP provider, it’s time to choose a business phone number. You can select an area code and phone number from our database, and we’ll let you know if it’s available. Alternatively, you can choose to port an existing business phone number from another provider.

5. Ensure all of your hardware is set up

Remember that hardware you picked out earlier? Step 5 is to ensure your hardware is properly set up. Depending on the complexity of your setup, you may have to call in IT to help at this stage.

6. Configure your business phone settings

You’re now ready to add your business phone settings, from outgoing caller ID to auto-attendant to voicemail. Customize your settings to your heart’s content, but remember you can always change them at any time.

7. Add team members and get to calling

You’re nearly ready to begin making and receiving phone calls on your VoIP setup. But first, you’ll want to onboard team members by creating new phone numbers or adding them to an existing shared phone number.

Try out OpenPhone, the #1 VoIP phone system

What is VoIP phone: OpenPhone mobile app, Your team screen

If the above VoIP phone systems solutions sound optimal for your organization, why not try out business VoIP? You’ll enjoy all the benefits of a traditional landline (plus some additional features) with none of the hassle.

Testing out our advanced features firsthand is the best way to understand their value to small businesses. Sign up for a free trial of OpenPhone today to learn what the hype is all about — you’ll never go back to landline phones again.

VoIP phone system FAQs

Can you use VoIP as a normal phone? 

Yes, you can use VoIP as a normal phone. The only difference is that you need an internet connection to access the service, and you may be unable to receive certain text notifications like shortcodes

Are VoIP calls free? 

Depending on your VoIP provider, VoIP calls may be free or they may come with a charge. In the VoIP industry, standard practice is to pay a monthly or annual fee for all of your lines.

Why use a VoIP phone? 

VoIP phones can help lower your overall phone costs. A VoIP phone system like OpenPhone’s also makes it easier for your employees to telecommute, communicate internally, and collaborate on client accounts.

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