Business Phone Systems: VoIP vs Traditional Lines for Small Business

Zac Tassone

Published 23 October 2026

For most small businesses in Australia, VoIP is now the better choice for a business phone system. Since the NBN replaced most of the old copper phone network, many “landlines” already run over the internet anyway, and a proper VoIP system adds features such as call forwarding to mobiles, a phone app for staff and easy number changes as you grow. The key is getting a reliable internet connection and a plan for power and internet outages.

This guide explains how VoIP for small business compares with traditional lines, what the NBN changed, and what to check before you choose a system.

Reviewing your phones and internet? We can help you choose and set up the right phone system as part of our managed IT services, or start with a free IT Health Check.

What is VoIP?

VoIP stands for Voice over Internet Protocol. Instead of carrying calls over a dedicated copper phone line, VoIP turns your voice into data and sends it over your internet connection. Calls can be made from desk phones, computers, or an app on your mobile, and they still connect to normal landline and mobile numbers.

A VoIP business phone system is usually delivered in one of these ways:

• Hosted or cloud phone system: the provider runs the phone system in the cloud and you simply plug in phones or install apps. This is the most common option for small businesses.
• Microsoft Teams Phone: adds calling to normal phone numbers inside Teams, which suits businesses already using Microsoft 365. Microsoft lists Teams Phone Standard as an add-on at AU$15.00 per user, per month, ex GST on an annual commitment, plus a calling plan or connection to a phone provider. Prices can change.
• SIP trunking: connects an existing on-premises phone system to the phone network over the internet.

What the NBN changed for business phones

Before the NBN, most business phones used copper lines from the old telephone network, which carried their own power and worked even during a blackout. As premises moved to the NBN, those copper phone services were largely switched off, and phone services moved onto the NBN.

In practice, this means many small businesses that think they have a “traditional line” are already using a digital or VoIP service through their NBN connection. It also means some old assumptions no longer hold, particularly around power outages.

The Australian Communications and Media Authority notes that most services connected to the NBN will not work during a power outage, so you may not be able to call 000 from them. It recommends having another way to contact emergency services, such as a charged mobile phone. If you have medical alarms, lift phones, security monitoring or EFTPOS terminals that rely on a phone line, check how each one connects.

VoIP vs traditional lines: the comparison

Cost

VoIP usually costs less to run. Calls to local, national and mobile numbers are often included or charged at low rates, and you avoid paying for separate physical lines. Hardware costs are lower too, because there is no on-site phone system box for cloud services.

Flexibility

This is where VoIP clearly wins. Staff can answer the business number from a desk phone, a laptop or their mobile app, whether they are in the office, at home or on site. Adding a new staff member means adding a user, not installing a line.

Features

Most VoIP systems include features that used to need expensive equipment:

• Auto attendants (“press 1 for sales, 2 for accounts”)
• Ring groups and call queues
• Voicemail to email
• Business hours and after-hours routing
• Call recording, where legally appropriate and disclosed
• Integration with Microsoft 365, Teams or your CRM

Reliability

Traditional copper lines were simple and very reliable, but they are largely gone. VoIP depends on your internet connection and power. With a good connection, a quality provider and a backup plan, VoIP can be very reliable. With a poor connection, call quality suffers.

Call quality

Call quality on VoIP depends on your internet connection, your network equipment and how traffic is prioritised. When set up correctly, it is as clear as a traditional line, and often clearer.

What to check before switching to VoIP

Your internet connection

Voice calls use relatively little bandwidth, but they are sensitive to delays and dropouts. Check the speed, especially upload speed, and the stability of your connection. Business-grade NBN plans often come with better support and service levels, which matters when your phones depend on it.

Your network equipment

Your router and switches should support quality of service (QoS), which prioritises voice traffic over large downloads. Old or consumer-grade equipment is a common cause of choppy calls.

A backup plan

• Use a 4G or 5G backup connection that takes over automatically if the NBN drops
• Set calls to divert to mobiles if the office goes offline
• Consider a small battery backup (UPS) for your router and NBN equipment
• Make sure staff can use the mobile app as a fallback

Number porting

You can usually keep your existing business numbers when moving to VoIP. Porting takes some planning, so allow time and avoid switching during your busiest period.

Emergency calls

Confirm how 000 calls work on your chosen system, including what address information is provided for staff working from home.

Security

VoIP accounts are a target for toll fraud, where criminals make expensive calls through a compromised system. Use strong, unique passwords, multi-factor authentication on admin portals, and restrict international calling unless you need it. Our guide to strong passwords and authentication covers the basics.

Which option suits your business?

• Small offices and hybrid teams: a hosted cloud phone system or Teams Phone usually gives the best mix of cost and flexibility.
• Businesses deeply invested in Microsoft 365: Teams Phone keeps chat, meetings and calls in one place. Our Microsoft 365 services can help you plan it.
• Businesses with a recent on-premises phone system: SIP trunking may let you keep the hardware until it is due for replacement.
• Sites with critical line-dependent equipment: check alarms, lifts and EFTPOS carefully and plan dedicated backup connections.

We do not sell a single VoIP brand. We can help you choose and set up a system that suits your team, check your internet and network are ready, and make sure it is secured properly. If you are planning other changes as you grow, our IT roadmap for growing businesses shows where phones fit in.

Frequently asked questions

Will my VoIP phones work during a power outage?

Not without backup power. Most NBN services stop working when the power goes out. A battery backup for your router and NBN equipment, plus diverting calls to mobiles, keeps you reachable.

Can I keep my business phone number if I switch to VoIP?

In most cases, yes. Existing numbers can usually be ported to a new provider. Plan the timing and keep your old service active until the port is complete.

How much internet speed do I need for VoIP?

Each call uses only a small amount of bandwidth, but stability matters more than raw speed. A reliable NBN connection with good upload speed and properly configured network equipment is the key to clear calls.