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What Is a VoIP Number and How Does It Work? – business.com – Business.com

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When choosing a business phone system and communication options, more users than ever are opting for VoIP numbers. Learn about the flexibility and advantages of VoIP numbers, how they compare to standard business phone numbers, and how to determine if a VoIP number is right for you. 

What is a VoIP number?

A Voice over Internet Protocol (VoIP) number is a dedicated phone number assigned to a user or customer. Unlike a traditional phone number, it’s not tied to a physical line. If you’re placing a call with a VoIP number, your recipients won’t know the call isn’t coming from a landline. 

Editor’s note: Looking for the right business phone system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Many VoIP providers offer standard features along with VoIP business phone numbers, including voicemail services and text messaging.

Some VoIP services are co-branded as cloud phone services. A company running a phone service based in the cloud owns or manages the hardware necessary for its offerings.

As remote work increases, more businesses opt for VoIP services because of the limitations of landline phones. With a VoIP service, an employer can assign a number to each remote team member, even if they work in multiple states or on several continents.

Did you know?Did you know? As of 2020, only 36.7% of American adults live in households with landline phones, and 62.5% only use cell phones for their communication needs.

How does a VoIP number work?

VoIP calls work over an active broadband internet connection, unlike regular phone numbers, which require copper wire infrastructure managed by local phone companies. Each regular number corresponds to a specific line in the area.

VoIP numbers eliminate the need for phone companies to link them to local infrastructure. A VoIP system takes analog audio signals and converts them to digital data sent over the internet.

FYIFYI: The term “broadband internet” refers mainly to cable internet plans, but business-grade broadband connections like fiber, dedicated internet and enterprise-grade 5G are also considered broadband internet.

Circuit switching vs. packet switching

Traditional phone systems use a process called circuit switching to connect phone calls between parties. When you dial a number, it gets routed to a switch operated by your local carrier to the person you want to contact. Several interconnected switches make that connection possible. Once the individual receiving your call answers the phone, a circuit opens; it closes only when one party disconnects.

VoIP services use an alternative to circuit switching called packet switching. Rather than maintaining a constant connection during a phone call, as circuit switching does, VoIP companies use data networks that send and receive data only as needed.

Packet switching doesn’t send information over a dedicated physical line. Instead, it uses networks with thousands of possible paths. Many VoIP service providers use data centers to ensure reliability.

How does packet switching work?

The computer sending the data breaks the content into packets; each packet has an address that tells the network devices where to send it. Each packet also has a payload, which could be part of an email, an MP3 file or another type of digital content. The sending computer transmits the packet to the nearest router. The router receives the material and passes it to another router closer to the recipient.

That process continues until the receiving computer gets all the necessary packets, all of which likely took numerous paths to get to their destination. Because packet switching sends data along the least congested routes, it’s a highly efficient option. Additionally, packet switching means several internet-based phone calls occupy the same amount of space as one call on a circuit-switched network, mainly due to data compression.

What are the different options for making VoIP calls?

You can use a VoIP number in several ways. The first option is to use an analog telephone adapter to connect a conventional phone to a computer and its internet connection.

Alternatively, you may invest in an IP phone with a handset, cord and cradle like a standard telephone. The main difference is that these devices have Ethernet ports rather than a place to hook up a landline phone connection. IP phones connect to an internet router and have built-in hardware and software to handle VoIP calls out of the box.

Finally, the most reasonably priced and accessible way to take advantage of VoIP calling is to use specialized software. Then, you only need to download an app, make sure you have a stable internet connection, and verify that your speakers and microphone work properly before trying to make or receive a call.

How do you get a VoIP number?

If you’re interested in getting a VoIP number, the first step is to research providers and see which ones most closely match your needs. We’ll highlight a few leading VoIP companies.

RingCentral

RingCentral offers several internet-based phone plans for customers. For example, RingCentral MVP is an option for businesses that works across all internet-enabled devices. It also allows for voice and video calls and text messaging.

Some of the company’s plans also include internet faxing capabilities and automatic call recording. Integrations with popular products such as Microsoft 365, Google Workspace and Slack help employees use VoIP services without a significant learning curve. 

Read our comprehensive RingCentral review for more information.

Ooma

Ooma offers a free mobile app that lets employees answer calls from a VoIP number while using their standard smartphones. The company also has a virtual receptionist tool that creates menus for incoming callers. Callers can select the most appropriate reasons for contacting a company and get routed to the appropriate department or team member.

The multi-ring feature is ideal for people who want to cover all their bases to ensure they don’t miss calls. It sends incoming call notifications to several devices simultaneously, such as your office phone and your smartphone with the Ooma mobile app installed.

Read our in-depth review of Ooma for more information. 

Dialpad

Dialpad is another option that doesn’t require specialized hardware. It works on smartphones and other devices with Wi-Fi connectivity. This company lets you choose a new number or keep your current one. That flexibility is ideal for business owners with established numbers and those who want a fresh start with a new one.

Dialpad’s custom routing rules let you send incoming calls to the appropriate person, and the system supports text messaging. There’s also an after-hours transcription feature. If calls arrive outside previously set active hours, they automatically go to voicemail that will also be available to read as text.

For more information, read our comprehensive review of Dialpad.

8×8

An 8×8 plan gives you many of the services associated with traditional phone calls, such as call waiting and parking, hold music, and caller ID. Analytics features also help you see how your company uses its VoIP numbers, identifying useful trends within your customer base. For example, a sentiment analysis feature allows you to spot patterns in how callers feel.

8×8 uses patented technology to route calls to the nearest data center. There’s also a specific app to help people get stuff done while using 8×8. It includes a straightforward user interface to let employees switch between voice and video calls or text messages, depending on their needs.

To learn more, check out our complete 8×8 review.

TipTip: These are just some of the best business phone systems that offer VoIP numbers. Research all available options to determine if a VoIP phone number is worth your time and money.

How much do VoIP numbers cost?

All VoIP number providers list their plans and associated features on their websites. Some options start at about $20 per month, but the cost goes up depending on what features you want.

The inclusion of international calling capabilities could also affect the total cost. Some of the lowest-tier subscriptions only allow calling within the United States and Canada. However, paying more facilitates communication with people from more countries.

The number of employees who need VoIP numbers is another factor that influences costs. For example, a certain amount per month might give you 10 numbers, while a higher monthly fee would give you more.

If cost is a major concern for your business, narrow your focus to find providers that offer free trials of their services. While some features will likely be disabled during a free trial period, you’d learn enough to determine whether a particular service fits your needs and budget.

What are the benefits of using a VoIP number?

These are some of the top benefits of using VoIP numbers: 

  • Low costs. Many business owners are drawn to the low costs associated with VoIP numbers. Because VoIP providers offer price transparency about base rates and extra expenses, it’s easy to set a budget for your overall communication costs.
  • Accessibility and flexibility. VoIP’s increased accessibility and flexibility are also significant perks for business owners. Whether employees are in their office or on another continent, they can use the same number to make and receive calls as long as there’s a stable internet connection.
  • Superior quality. A VoIP number also generally offers superior quality to landline calls. Many companies even provide high-definition calls and take up less bandwidth than you’d probably expect. 
  • Scalability. VoIP technology supports scalability. Customers can sign up for subscriptions that allow more users as needed, instead of investing in expensive hardware and dedicated lines.
  • Efficiency with mobile apps. Many VoIP services help you switch between numerous communication methods without leaving the app. This convenience helps keep productivity levels high and means that workers can always get in touch with each other when needed.

FYIFYI: A recent Research and Markets report forecasts that the global VoIP market will surpass $102 billion in total value by 2026, resulting in a 3.8% compound annual growth for the 2021-26 period.

Is a VoIP phone number secure?

Many business owners wonder about the security of using a VoIP phone number, especially if they often discuss confidential matters during calls. Although VoIP is not a hack-proof technology, the good news is that it has gotten more secure over the years.

VoIP companies often have website sections devoted to their security practices. Data encryption is one of the best and most widely used ways to keep your data safe, whether it’s a phone call or a text message sent through a VoIP-enabled app.

Aim to do business with a VoIP company that shows it takes security seriously by specifically detailing security measures on its website or within other branded content. 

TipTip: Keep in mind that security is also your company’s responsibility. Consider doing a cybersecurity risk assessment to pinpoint areas with room for improvement.

Are you ready to get a VoIP number?

There’s no right answer when deciding on a VoIP number. Your decision depends on numerous factors, including your current and anticipated business needs.

Consider getting input from other people at your company before finalizing your decision. For example, if your organization has a call center team, those employees would have valuable input about what’s needed and whether it’s a good time to change your communications systems.

Implementing a VoIP system isn’t an overnight decision. Take your time, learn about the available options, and weigh these factors against your company’s current and future needs.  

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