VoIP vs PBX- A detailed comparison(15 key differences)


VoIP vs PBX? Which one is better?

Choosing a phone system can be a tricky affair. This is so because of the cost, maintenance, ease of use, and scalability. All these have lasting effects on your business, staff, and customers.  

In this article, we will compare VoIP and PBX phone systems as well as their advantages and disadvantages so that you can choose the one that suits your business.

Sounds good?

Let’s get started.  

What is VoIP?

VoIP, Voice over Internet Protocol, allows users to make phone calls via the internet. The technology converts the audio from calls into ‘digital data’ packets and sends them over the internet in real-time.

VoIP transforms virtually any device into a telephone if the device has a means to speak and listen. Since its inception, it has grown in popularity and fast becoming the preferred choice for business communication.

Advantages and disadvantages of VoIP

Low setup costsStrictly relies on the internet
Low rates for local and international callsEmergency calls have limited location tracking
Easy to setupConnection issues may cause latency and jittering
Can be used in different locationsWeak internet connection causes poor voice quality
Has additional featuresIt is prone to viruses and hacking since its internet dependent
Can boost productivityIt is system dependent
You can choose options and solutions that suite your needsConsumes data and bandwidth
It is scalable 

Further reading: Advantages of using a VoIP app

What is a PBX

A PBX, or Private Branch Exchange, is a private phone network that is used within a company.

The PBX is installed by a team of technicians and routes all inbound and outbound calls. It does so by connecting all phones, or extensions, in each office to each other and a few outside lines.

Calls made from extensions are routed by the PBX to the Public Switched Network (PSTN). Likewise, calls from the PSTN are routed to the desired extensions via the PBX.

Further reading: What is a PBX phone system?

See the diagram below, to see how the PBX works.

Advantages and disadvantages of a PBX

Easy to useVery costly to setup
Doesn’t require an internet connectionRequires skilled personnel to install and/or modify the system
Can be used during a power outageTakes up a lot of space at a company’s premises
You only pay for what you needQuality broadband required
Remote programming by providerThe business owner is responsible for maintenance

How to choose a business phone system

As a business, it is very important to choose a phone system that is suitable for your business. The main decision you have to make is, what kind of system you want and where you want the equipment hosted.

When choosing a phone system, you need to considered the best business phone service in terms of industry, budget, employee count, office locations, and customer base.

Here are the types of phone systems businesses can choose from.
• Virtual phone system
• Landlines
• VoIP
• Cloud and on-premises systems

Further reading: Virtual business phone system

And these are the factors you will need to consider when comparing the business phone systems.
• Cost
• Reliability
• Security
• Mobility
• Scalability
• Support
• Features

Before taking a decision on which phones system to use, you need to consider your budget, whether your business is growing, and if you have an IT staff which can maintain the type of phone system you want to choose.

So, when you choose a phone provider for your business, it is important to find a service that not only has the features and tools you want in a phone system but also offers the level of customer support to keep customers happy and engaging.

Contact YOOTOK, one of the best business phone provider which will offer the best business phone system services for you and your business daily communication.

VoIP & PBX – A detailed comparison

Scalability-Multiple phones can use same VoIP plan
-You can add extensions online by yourself
-You must add extra phone lines
-You will need assistance from skilled technician
Setup costs-Low costs
-Softphones and hard phones extensions can be used
-Cost per user can cost $20- $50 per month
-High costs
-Additional cost for physical phones
-PBX server can cost at least $3000
Maintenance costs-Are the responsibility of the VoIP provider-Responsibility of the business owner
Flexibility-Staff can use system from different locations-Staff can only use the phone system while in the office
Mobility-Staff can access phone system from the office and on the go-Staff need to be in the office to make and receive calls
Security-High risk of hacking and containing viruses -Encryption helps to ensure information is safe-There is no risk of hacking because system is not connected to internet
Internet reliance-Requires the internet to function
-Voice quality is dependent to internet connectivity
-Does not require the internet to function
Running costs-VoIP providers follow a subscription model-The running costs of on-site PBX depends on your setup
Emergency calling-Does not have a clear connected location-Also does not have a clear connected location
International calls-International calling rates are much lower-Ridiculous minutes rates for international calls

VoIP vs PBX Infographic

How to upgrade from a PBX to VoIP

Upgrading to VoIP for businesses has become a norm recently because VoIP is a more convenient phone system to use. Upgrading from PBX to VoIP would be a solution for most business to make their business daily communication active and up to date.

If you’ve taken the decision to upgrade from your old PBX system to VoIP, this is what you will need in place during the migration.

Expert support– You will need to be ready to work with telecoms professionals to ensure that it all goes smoothly.
Check your dates– Take the time to make sure that your VoIP package is ordered to arrive in advance of your PBX expiration to avoid being out of service for any amount of time.
Order enough hardware for what you need– You may take the time to consider if the number of phones you have in operation is enough to suit your business’s requirements.
Allow for the possibility of disruption– Whenever there’s something new that needs to be installed, there is always a chance that there could be some disruption to the office space.
Make time for employee training– You should educate your office users on how to get the most out of the new VoIP.


1. Is a VoIP system connection as good as a landline?

Some users are concerned about the sound quality of a VoIP system, but, technology has come so far that it’s virtually impossible to tell the difference between landline and internet-based calls.

2. Is VoIP better than a PBX?

PBX is reliable, secure, and offers high call quality, but both the initial setup and maintaining the system is costly. VoIP is very flexible and scalable, plus the cost of maintaining the structure is much lower than with traditional lines.

3. What does PBX and VoIP stand for?

PBX stands for Private Branch Exchange and VoIP stands for Voice Over Internet Protocol.

4. Do I need a PBX for VoIP?

No, You do not need a PBX system in place to use VoIP effectively.

5. Are PBX systems still used?

End users are keeping them as the “backbone” and supplementing them with the IP-based solutions.

To sum up

The PBX vs VoIP decision comes down to your needs and objectives. Each has its place in the workplace.

One thing is undeniable though, more and more businesses are migrating to VoIP. The low startup costs, abundant features, and flexibility make VoIP a firm favourite for large and small businesses.

To find out more, read our VoIP Buyers Guide.