What’s The Difference Between An IP And A Digital Phone?

At Direct Voice and Data we’re often asked what the differences between an IP phone and a digital phone really are; and which is best – especially where businesses are looking to upgrade their current phone system.

As with most things in life there are pros and cons to either option, so we’ll try and set out the differences here.


How they work

The direct descendant of analogue phones, digital phones convert the analogue voice signal into a digital signal, transport the signal across the connected line, then decode that signal into sound at the other end. It means that what was said at one end is what you hear at the other.

This is because digital signals utilise unique communications protocols such as DCP (Digital Communications Protocol) to control the transmission of the signal.

On the other hand, IP phones use the IP (Internet Protocol) in the same way as we use the internet.

The data is transmitted as “packets” of information via private data networks or the public internet. IP Technology can only be used internally – by IP handsets deployed on your internal data network – or extend to external traffic over a private data connection or the public internet. Once the data reaches its destination the “packets” are reassembled in the right order to reconstruct the voice transmission.

Internal data networks are a minimum of 100Mpbs – usually 1Gbps – therefore transmitting voice over this network will normally work well without any quality issues.

However, if you are using IP technologies externally, you MUST ensure that the data connection is suitable for voice traffic. Where this is not the case (due to slow internet connections) the “packets” might not be reassembled correctly – if some don’t make it to the destination for instance – and this can lead to voice quality issues. Increasing bandwidths will generally resolve this.

Digital phones are run with proprietary encoding that allows them to only interface with the PBX (Private Branch Exchange) that they were manufactured to support.

Where IP phones are “proprietary” (to communicate with a specific platform or provider) they have a greater ability for customised feature programming on that platform and often yield a higher call quality.

How they are powered

Digital phones use very little power – most of which comes through the line itself – typically through a power module built into the PBX. This makes them much more power efficient than IP phones.

IP phones require more power than their digital counterparts and, since they do not derive power from the PBX, each phone requires either a separate AC plug or POE (Power over Ethernet) network switch. This means that overall power consumption of an IP system is greater than that of a digital system.


Digital phones can be delivered either on traditional copper wiring or structured network cabling (e.g. Cat5 or Cat6), but because the digital phone is the only device that can utilise a single connection it means each digital handset requires a socket. Also, as a PC or other networked device must run over structured cabling, 2 cabling points per desk must be provided (one for the digital phone and one for the computer).

As IP Phones cannot run over traditional copper wiring they MUST be deployed on structured cabling. This may mean the initial deployment may be more expensive to ensure sufficient structured cabling points for phones. However since most IP phones have the ability to “piggyback” or “daisy-chain” to another device, a single cable connection can support both the IP phone and the networked device (e.g. PC).

There are a few technical considerations to review when deploying an IP setup over an existing network, but this is something that our specialists will be able to help with when designing a solution.

Shared Bandwidth

Digital phones do not require any bandwidth on the network (LAN) or on the internet. Depending on how a Voice Over IP network is configured, the IP phones may share their network with the computer network. Whilst this should be feasible internally, it is possible that over-usage of either could result in a deteriorated voice quality. This is a specific consideration if you are using IP traffic externally (over an internet connection).

Although it may seem that digital phones might be more cost effective, there are a number of reasons why IP phones could be better for a business.


Because the port on a PBX which the phone is programmed to is specific to the terminated location, a digital phone needs to be reconfigured if an assigned user moves from desk A to desk B.

An IP phone is programmed with the user information on the device itself, and keeps that information, wherever that user is deployed. This allows greater mobility where companies need to frequently reassign employees to other physical or remote locations.

IP phones are connected back to the system over a local area network (LAN) within the building, or a wide area network (WAN), which includes remote connection to another office, home user or workspace.

This means that wherever a user can connect remotely to the network ideally an IP phone should be installed at that location. By operating as though it is located within the same offices, an IP phone allows for seamless remote working.

When an IP phone is connected remotely the business receives the same user information as from a locally installed phone (i.e. you can see when the remote user is on the phone and/or perform the same call management as for office based users).

Cost of calls

Using the technologies described above, it is possible to connect locations over a WAN or virtual private network (VPN) and as such reduce costs to these locations – whether that be a second office or permanent home workers.

So what should I do?

Deciding the best system for your business may depend on a number of factors and the experts at Direct Voice and Data can help you make the right choices for your existing and future telephone requirements.

Direct Voice and Data offers individually structured support plans to suit your business’s specific requirements. To find out more about how we can help, please call the Direct Voice and Data team on free phone 0800 84 999 84