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Analog Phone Systems vs. Digital: Which Is the Right Choice?

This article was updated on April 17, 2024

There was a time when every home had a rotary phone — often mounted on a wall and usually with a coiled cord that stretched from room to room (and then never unstretched) — and every office used an analog business phone system. Today, digital is dominant, especially in the business environment. Let’s take a look at cloud-based, internet-delivered telephone service and how it stacks up against traditional copper-wired phone service.

Photo of a woman in an office talking on a corded landline while entering notes into her laptop

What Are Analog Phone Systems?

At its most basic, analog technology involves taking audio signals — usually the human voice — and converting them into electronic pulses that are transmitted over copper wires. The pulses are translated back into audio signals at the other end of the transmission.

Analog lines, also known as POTS (Plain Old Telephone Service), have been around for decades and are fine for things like standard phones, faxes, and modems. The landline phone connects to a location’s phone jack or into an on-site PBX (Private Branch Exchange) system that manages the routing of inbound and outbound calls.

But this technology has limitations on the amount of data that can be transmitted — and businesses today need to move a lot of data to enable employee collaboration and customer connections.

What Are Digital Phone Systems?

In digital technology, your voice signal is broken into binary code — a series of 1s and 0s. This code is sent to its destination, where another device reassembles all those numbers into the original signal.

Digital phone systems employ two transmission methods — voice over internet protocol (VoIP), which, as the name implies, sends your voice over the internet, and digital signals transmitted via cable or fiber optics.

How Are Digital Systems Different From Analog?

There are a number of factors that set analog and digital voice systems apart. Let's take a quick look at the differences, and then explore how they stack up in more detail.

Analog Systems 

Digital Systems 

Equipment:

On-premises hardware and phones connected to the local telephone service via “twisted pair” copper wires

Equipment:

Digital phones or softphones, a router and modem, broadband internet

Costs:

Can require large initial investment; business is responsible for maintenance and other ongoing costs

Costs:

Involves less on-site equipment; updates are automatic

Reliability:

Very reliable, susceptible to downed, cut, or degraded telephone wires

Reliability:

Very reliable, requires strong, consistent internet, cable, or fiber optics

Features:

Limited features, normally call hold, mute, and redial

Features:

Dozens of features, especially in conjunction with unified communications

Analog vs. Digital: How They Stack Up

1. Equipment

Business analog phone systems include on-premises wiring, handsets, and other equipment that are connected to the local telephone company via “twisted pair” copper wires. There are two general points to remember with analog systems: One assigned phone number is associated with each line, and that line can handle one conversation at a time.

In contrast, VoIP service uses the broadband internet connection that most businesses already have on hand, while basic digital service transmits over cable or fiber optic technology. VoIP is less expensive than analog or digital because data is sent over the existing internet infrastructure, which reduces the cost of installing new or separate phone lines.

VoIP requires less hardware and cables than traditional telephone systems, which translates into a less cluttered workplace and reduced implementation costs.

2. Costs

In general, both VoIP and digital phone service are more cost-effective than a traditional phone line. VoIP services cost less than digital phone service but require a high-speed broadband internet connection to work their best. If you don’t have broadband Internet, digital phone service is more cost-effective than VoIP.

Set-up costs can be a different story and depend on your current situation. For example, if you have an on-premises analog system, there are costs you might face switching to VoIP, including buying digital phones or softphones, a router and modem (that you likely already have for your existing internet set-up), VoIP headsets, sufficient internet bandwidth, and a monthly provider subscription. But you also have ongoing maintenance, updates, and other costs with an on-premises system that you won’t have with VoIP.

VoIP phone systems are relatively easy to install. And even if you have an existing analog phone system in place, you can use VoIP adapters to enable service. Landlines require physical connections and therefore need cable installations — digging up dirt, running cables through office buildings, etc. This not only requires more installation time, but can also limit the number of active phone lines in your office depending on the number of cables and junctions involved. And if you need a phone system in more than one location, e.g., at multiple storefronts or office sites, then landlines require a physical connection at each location.

For VoIP and UCaaS services like Vonage offers, maintenance is often the provider’s responsibility. The software that VoIP phone systems use lives in the cloud, so there’s no need to pay for on-site hardware. Long-distance or international calls are another area of potential cost savings. (This can vary on a case-by-case basis — check with phone service providers for details.)

3. Reliability

Both analog and digital systems are reliable when you consider call quality — analog is often described as having a richer tone, while digital offers superior clarity and less background noise — and performance.

The basic requirement of a phone is that when you pick it up, it works — and both analog and digital options check that box. The notion of reliability can be expressed as uptime, and the gold standard for uptime is 99.999%, which Vonage consistently delivers*.

VoIP does have one disadvantage compared to analog landlines: It requires a strong internet connection and constant power supply. If your business loses power or internet, it will hurt your ability to answer calls. But that can be mitigated if your VoIP provider gives you the ability to accept calls on a mobile device working with a hotspot, and if you have a back-up power supply. In contrast, landlines don't require either internet or power — although phone lines can be cut or downed due to a storm or other incident, which often takes longer to repair than a lost internet connection.

4. Features

Analog systems offer very basic features like mute, hold, and redial. A digital solution expands on those features, adding call forwardingcall blockingcaller IDthree-way conversation capabilities, and more to the mix. And combining VoIP with unified communications opens the door to even more features that boost productivity, collaboration, and customer engagement, including a mobile app and desktop appcall recordingvirtual receptionistsvoicemail to emailclick-to-dialteam messaging, and team video meetings.

Which System Is Right for Your Business?

The simple answer is, it depends. The best phone system is the one that best suits your needs, your current and future situation, your budget, and other factors. How many employees do you have? Are they on-site, remote, or hybrid? What kind of features are you looking for?

Generally, if you go with the right provider, VoIP and UCaaS offerings can be a smart choice. Roughly a third of small and medium-sized businesses currently use VoIP to power their communications. Plus, as more companies switch to VoIP and UCaaS platforms, they report experiencing a 20% increase in productivity, among other benefits.

Vonage understands that communication with customers drives your success. That’s why we created an easy-to-use, easy-to-implement unified business communications solution that offers a wide range of collaboration and CX tools, plus the flexibility, mobility, and scalability you need.

If your business is still relying on traditional, wired communications, or if you’re looking for a better digital solution, then learn more about what Vonage’s VoIP and Unified Communications can do for you.

Stock photo of woman, a small business owner who is on her cell phone and typing notes into her laptop.
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*

The 99.999% claim is based on Vonage's average up-time and/or availability.

Scott Rigdon bio
By Scott Rigdon Sr. Content Writer

Scott creates effective and engaging blog articles, web pages, email sequences, and other content for Vonage. His journalism degree, editing experience, and advertising background give him a unique perspective on content structure and strategy. When he's not working, Scott enjoys reading, movies, and helping his wife restore their mid-century home. Oh, and sandwiches.

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