What is an IP Phone System? How it works

For decades traditional analogue phone systems have been used by businesses. While the technology in the handsets and the PBX (private branch exchange) has improved, the underlying technology is still the same.

Copper lines and a dial tone are what connect an analogue phone system to a PBX that would then use telephone wires to connect to the service provider.

IP phone systems have been around for quite a while, however, in the last decade, the technology has improved and now they are considered a much more suitable purchase than their analogue counterparts.

An IP phone system uses the Internet to send and receive data and connects via a router and modem. This applies to the system and any device or handset on the system.


What this means is that a greater range of devices can be used for communication with most IP phone systems having applications for desktop computers and mobiles. Since all the data is synced and stored in the Cloud, one device can simply pick up where the last device is left.

What is the difference between VoIP and IP telephony?

In recent years, service providers such as in2tel have started to use the terms VoIP and IP telephony interchangeably but that has not always been the case.

IP telephony describes any system that uses Internet-based telecommunications, this could include fax machines as well as other systems.

VoIP (Voice over Internet Protocol) is more specific and refers to the technology used to make and receive calls over the Internet.

What do I need to use an IP Phone system?

More recently hosted IP systems have meant that businesses require very little investment upfront. No longer do you need a VoIP gateway and an on-premise PBX server?

These days, all you need is a reliable Internet connection with decent speeds and a robust business network setup.

To find out if you have a suitable Internet connection, you can read our article about the required broadband speeds for VoIP.

What are the benefits of an IP phone system?


While analogue handsets are relatively inexpensive, the cost of support, configuration, and upgrades soon builds up.

The provisioning of analogue phones is a slow and painful process, with a rewire needed to simply move the location. IP handsets come with preprogrammed provisioning, meaning that you can simply connect to a router anywhere in the world and the handset will be usable. The handset will remember the user, their settings, and their history.

Desktop and mobile applications now come with modern IP phone systems. These applications allow employees to connect to the phone system via any IP-enabled device. This could be a mobile, tablet or desktop computer, allowing for remote working, or work from home policies.


An IP phone is more like a computer than a typical analogue phone. Due to the Internet connection, this type of phone can sync with the business phone system with ease, updating contacts, settings, and history without the need for manual input. This makes an IP handset much easier to manage from a user level and the person managing the phone system.

While analogue phones can have an extensive feature set, IP phone systems generally have a greater range without the need for additional hardware.

Check out the extensive list of features on our hosted IP phone system, in2pbx.

Integration with other business systems

These days businesses are used to different systems communicating with each other. It makes life a lot easier for everyone.

This capability is made a lot easier through IP-enabled devices that can communicate with each other over an Internet connection. IP phone systems are no different.

Most business uses Customer Relationship Management (CRM) software. Depending on the two providers most IP phone systems can integrate with the main CRM providers such as ZohoHubSpotSalesforce, and Microsoft Dynamics.

For example, the user can call the customer from the CRM interface. When the call is made, the record will automatically be stored in the CRM along with any other information.



One of the main benefits of an IP phone system is the cost benefits. No longer is the expensive infrastructure required to own a modern phone system. IP phone systems can be acquired for a very little upfront cost.

Not only do you save on infrastructure but the costs of calls are much cheaper. With an IP phone system, you generally pay per user, per month, which can save up to 60% over a comparable business landline plan.

Then are the hidden savings, that come from employees being able to use mobiles and desktops as phones, saving the need to buy additional desk phones for hotspots and environments where employees are on the move.

Could you save by switching to an IP Phone system?

If you are interested in finding out how much of a saving you could make by switching to our hosted IP phone system in2pbx, drop us a message in the live chat and an agent will be able to quickly answer your query.

If you prefer to speak to someone over the phone call for free on 1800 91 1800.

Alternately, email us at sales@in2tel.ie.