VoIP vs Landline Cost Comparison Australia

For most Australian businesses, VoIP is 40-60% cheaper than a traditional landline when you factor in line rental, call charges, hardware, and features. This guide provides a detailed cost comparison based on real Australian pricing from Telstra, Optus, and leading VOIP providers. We include setup costs, monthly running costs, hardware, and the features you get (or do not get) at each price point. By the end, you will have a clear picture of total cost of ownership over 1, 3, and 5 years, and you will understand why the PSTN copper shutdown means this is no longer a choice between equals.

Quick Verdict

VoIP wins on cost for virtually every Australian business. A traditional landline with Telstra or Optus costs $50-90/month per line in line rental alone, with call charges on top. A hosted VoIP service costs $15-30/user/month with most or all domestic calls included. When you add features that landlines cannot match (auto-attendant, ring groups, voicemail-to-email, call recording), the value gap widens further. The only scenario where a traditional landline might still make sense is a single-line home office with minimal calls, and even then, VoIP is usually cheaper.

Monthly Cost Breakdown: Landline vs VoIP

Let us compare the actual monthly costs for a typical Australian small business. All prices are in AUD and based on publicly available rates as of early 2026.

Traditional Landline Costs (Telstra/Optus Business)

Hosted VoIP Costs (Australian Providers)

Side-by-Side: What a 5-Person Business Actually Pays

Here is the realistic monthly bill for a 5-person business with moderate call usage (each person making roughly 30 minutes of calls per day, split between local, national, and mobile). Notice the landline cost is for 2 lines shared across 5 people. Traditional landlines are priced per physical line, not per user. Two lines means only two people can be on calls simultaneously. If a third customer calls, they get an engaged tone. The VoIP setup gives each of the 5 users their own extension, and multiple simultaneous calls are standard. For a deeper look at what to watch for in VoIP pricing, see our VoIP cost guide.

Total Cost of Ownership: 1, 3, and 5 Years

Monthly costs tell part of the story. Here is the full picture including setup and hardware, calculated for a 5-person business.

Setup and Hardware Costs (One-Time)

Total Cost Over Time

The landline range is wide because it depends heavily on call volume and whether you install an on-premise PBX. A business with high call volumes and a PBX system is at the top of that range. A business with minimal calls and no PBX is at the bottom. VoIP costs are more predictable because calls are typically included. Over 5 years, a 5-person business saves between $5,000 and $16,000 by switching to VoIP. That is real money for a small business.

The PSTN Shutdown: Why This Is No Longer Optional

Australia's copper PSTN network has been progressively decommissioned as the NBN rollout reached each area. Telstra's legacy copper services are being retired. If your business is in an NBN-connected area, your traditional copper landline has either already been disconnected or is scheduled for disconnection.This means the cost comparison above is partly academic. Traditional copper landlines are no longer available in most of Australia. If you are still on a "landline," you are likely already on VoIP without knowing it. Your ISP modem has a green phone port (ATA) that converts your analog phone into a basic VoIP service. You are paying landline prices for a VoIP connection that your ISP controls, with none of the features or flexibility of a proper hosted VoIP service.This is the hidden cost of doing nothing. You are not saving money by staying on the ISP ATA. You are paying comparable or higher rates for a worse service. Every missed call because your single line was busy, every customer who called after hours and got nothing, every time you could not transfer a call or check a voicemail from your phone - that is the real cost. For a full breakdown of the copper shutdown timeline and what it means, see our PSTN shutdown guide.

Hidden Costs on Both Sides

Neither option is completely transparent on pricing. Here are the costs that often surprise businesses on each side.

Hidden Landline Costs

Mobile call charges. Landline plans charge per-minute for calls to mobile numbers. At $0.35-0.55 per minute, a 10-minute call to a mobile costs $3.50-5.50. If your business calls customers and suppliers on mobiles regularly (and most do), this can add $50-200/month per line that is not visible in the headline price.

Feature add-on stacking. Voicemail, call waiting, caller ID, hunt groups - each is a separate monthly charge on a traditional landline. A business adding basic functionality can pay $20-50/month in feature charges on top of line rental.

Second and third line costs. If you need more than one person on a call simultaneously, you need another line. Each additional line is another $45-65/month in rental. A 5-person business might need 2-3 lines at $100-195/month just in rental before calls.

Break fees on contracts. Many business landline plans have 12-24 month contracts with early termination fees of $200-500+ per line. If you decide to switch mid-contract, you are paying to leave.

Hidden VoIP Costs

Handset costs upfront. Unlike a $30 analog phone from Officeworks, VoIP desk phones start at $80-150 for entry-level models (Yealink T31P, Grandstream GRP2612). Mid-range models with colour screens and more line keys cost $200-350. This is a one-time cost, but it is higher than analog phones. That said, many VoIP providers offer handsets on rental or include them with longer contracts.

Internet dependency. VoIP runs on your internet connection. If your NBN drops, your phones go down. A mobile hotspot or 4G failover router ($200-400) is worth considering as insurance. This is not a cost you have with copper landline (which was powered from the exchange).

Per-minute international rates. Some VoIP plans advertise "unlimited calls" but the fine print says "unlimited local and national." International calls are often charged per-minute at $0.05-0.50+ depending on the destination. If your business makes regular international calls, check the international rate card before signing up.

Number porting timing. The port itself is usually free or low cost, but the 5-10 business day waiting period means running two services simultaneously. Budget for one month of overlap. For a comprehensive look at VoIP costs that catch businesses off guard, see our hidden costs of VoIP guide.

Feature Comparison: What You Get for Your Money

Cost is only half the story. The feature gap between landline and VoIP is where the real value difference becomes clear. The feature that matters most for small businesses is simultaneous call handling. On a traditional landline, one line equals one call at a time. If both your lines are busy and a third customer calls, they get an engaged tone and call your competitor. On VoIP, multiple concurrent calls are standard, and overflow routing ensures no call goes unanswered. For a business losing even one customer per month to an engaged tone, the VoIP system pays for itself. For more detail on how VoIP compares to traditional phone systems overall, see our VoIP vs traditional phone guide.

What Most Businesses Get Wrong

Mistake 1: Comparing line rental to VoIP subscription without including call charges. The most common error in VoIP vs landline comparisons is comparing the landline line rental ($50-65/month) to the VoIP per-user fee ($25-35/month) and calling it a small difference. But the landline cost does not include calls. Once you add local, national, and mobile call charges, the landline total is often $80-150/month per line. The VoIP subscription typically includes all domestic calls. The real gap is much wider than the headline numbers suggest.Mistake 2: Thinking "I already have VoIP" because your ISP gave you a phone port. If your NBN modem has a green phone port and you plug an analog phone into it, you are technically using VoIP. But you are using the most basic, restricted version possible. Your ISP controls the SIP credentials, you cannot add features, you cannot scale, and you are paying close to landline prices for what is essentially a locked-down VoIP service with no business functionality. Moving to a proper hosted VoIP service with a provider like Maxotel gives you full control, all the features listed above, and usually costs less than what you are paying your ISP.Mistake 3: Delaying the switch because "the phones still work." This is the cost-of-inaction trap. Yes, your current setup still makes and receives calls. But every engaged tone a customer hears, every after-hours call that goes nowhere, every time you cannot transfer a call or check voicemail from your mobile - that is revenue and customer goodwill you are losing. The PSTN is already shut down in most areas. The question is not whether to switch, but how long you will keep paying more for less. For an honest look at what the copper shutdown means for your business, see our PSTN shutdown guide.

Switching: What the Process Actually Looks Like

Switching from a landline (or ISP ATA) to hosted VoIP is simpler than most businesses expect. Here is the typical timeline:Week 1: Choose a provider and plan. Compare 2-3 Australian VOIP providers. Ask about included calls, 1300/1800 support, handset options, and setup assistance. A good provider will ask about your business before recommending a plan, not just push the most expensive option. You can request a free recommendation to shortcut this step.

Week 1-2: Order handsets. If you are using desk phones (recommended for office environments), order your handsets. Entry-level Yealink T31P or Grandstream GRP2612 models are $80-150 each and perfectly adequate for most small businesses. Your provider may offer pre-configured handsets that arrive ready to plug in.

Week 1-2: Submit number port request. Your new provider submits the porting paperwork to your current carrier. This is the longest part of the process. Keep your existing service active until the port completes.

Week 2-3: Port completes, go live. Once the port is confirmed, your existing phone number starts ringing on your new VoIP system. Plug in the handsets, test calls in and out, configure your auto-attendant and ring groups. Total active effort: a few hours spread across 2-3 weeks.

Your Next Steps

Use this checklist to evaluate whether switching makes sense for your business and to plan the move:1. Pull your last 3 months of phone bills. Calculate your actual monthly spend including line rental, call charges, and feature add-ons. Most businesses are surprised by the total when they add it all up.

2. Count your lines and users. How many physical phone lines do you have? How many people need to make and receive calls? With VoIP, you pay per user, not per line. This is often where the biggest saving comes.

3. Check your internet connection. Use our bandwidth calculator to confirm your NBN connection can handle VoIP for your team size. Most connections above 10 Mbps download / 5 Mbps upload are fine for 5-10 concurrent calls.

4. Estimate your VoIP cost. Use our VoIP cost calculator to get an estimate based on your team size and call volume. Compare against your current phone bill total.

5. Check your current contract. Are you locked into a landline contract? Check the end date and any early termination fees. Even with a break fee, switching often saves money within 3-6 months.

6. Get quotes from 2-3 VoIP providers. Ask specifically about: unlimited calling inclusions, 1300/1800 number support, handset options, number porting timeline, and whether setup assistance is included.

7. Plan for overlap. Budget for one month where you are paying both your old and new service (during the porting window). This is a one-time cost that protects you from any disruption during the switch.

Is VoIP really cheaper than a landline in Australia?

Yes. When you include line rental, call charges, and feature add-ons, a traditional landline typically costs $80-150+/month per line for a business. A hosted VoIP service with unlimited domestic calls and full business features costs $25-35/user/month. For a 5-person business, the annual saving is typically $2,000-5,000+.

What happens to my phone number if I switch to VoIP?

You keep it. Number porting allows you to transfer your existing business phone number to your new VoIP provider. The process takes 5-10 business days in Australia. Your number, your customers' saved contacts, your Google listing - everything stays the same. Only the underlying technology changes.

Do I need to buy new phones for VoIP?

If you want desk phones, yes. VoIP phones connect via Ethernet (RJ45), not the old analog phone jack. Entry-level VoIP desk phones like the Yealink T31P cost $80-150 each. However, you can also use softphones (apps on your computer or mobile) at no hardware cost, which many small businesses prefer. Some providers include handsets with their plans.

What happens to my VoIP phones during a power outage?

They go offline. Unlike old copper landlines that were powered from the telephone exchange, VoIP phones need power at your premises. If the power goes out, so do your phones. Mitigation options include: a small UPS (uninterruptible power supply, $100-200) to keep your modem and phones running for 1-2 hours, automatic failover to mobile phones via your VoIP provider's app, or a 4G backup router.

Can I still call 000 on VoIP?

Yes. All Australian VoIP providers are required to support 000 emergency calling. However, VoIP 000 calls may not automatically transmit your exact physical address to emergency services the way a fixed copper landline does. Most VoIP providers let you register a service address for 000 purposes. Make sure this is configured correctly when you set up your service.

Is VoIP call quality as good as a landline?

On a decent internet connection (NBN FTTP, FTTC, or HFC), VoIP call quality is equal to or better than a traditional landline. VoIP uses wideband audio codecs that deliver clearer voice than the narrowband audio on copper PSTN lines. On poor NBN connections (especially FTTN with low upload speeds), call quality can suffer. Test your connection with a VoIP bandwidth calculator before committing.

Are traditional landlines still available in Australia?

In most NBN-connected areas, traditional copper PSTN landlines have been or are being disconnected. Telstra and other carriers have been progressively retiring copper services as NBN coverage reaches each area. If you are in an NBN area and still have a working landline, it is likely operating on a legacy service that is scheduled for shutdown. New copper landline connections are no longer available in NBN areas.

How long does it take to switch from landline to VoIP?

The total process takes 2-3 weeks from decision to go-live. The longest part is number porting (5-10 business days). Handset delivery takes 2-5 business days. The actual technical setup and configuration can be done in a few hours, often with assistance from your VoIP provider.