What Is the Difference Between Phone Companies?

Why this is confusing

When a business owner says "I need to switch phone companies," he could mean five different things: the office line account, the employees' mobile plan, the internet provider, the PBX that answers customers, or all of these together. In the past it really was one thing — a single company held the line, the number and the service. Today the layers have separated, and each layer has different providers.

Understanding the layers saves costly mistakes: businesses that switch internet providers to improve their "phones," or that pay twice for the same service with two providers without knowing it. In this article we break the market into four types of providers, look at what each one really sells, and go over what to check before you sign.

Four types of providers

• Wired infrastructure operator — owns the cables that reach the building: copper, cable, or optical fiber. It mainly sells the "pipe": a phone line, internet infrastructure, and sometimes TV packages.
• Mobile operator — owns an antenna network and a spectrum license. It sells mobile lines, minute and data plans, and sometimes business services such as employee groups.
• Internet telephony (VoIP) provider — supplies phone numbers and calls over the internet connection you already have. It has no physical infrastructure at the customer's site. Sometimes it sells only a line or a SIP trunk, and you have to get the PBX elsewhere.
• Cloud PBX provider — supplies the whole system: numbers, extensions, IVR menus, queues, recordings and a control panel. It usually also configures the system for your organization and supports you after setup.

There are also internet providers that are not infrastructure operators: they sell the service over another operator's infrastructure. That is why many business bills show two providers for the same connection — one for the infrastructure and one for the internet.

What each type is suited for

In practice, most organizations need a mix: infrastructure and internet from one provider, mobile from a second, and business telephony from a third. That is not a complication — it simply means each provider does what it does best.

The key point: the customer who calls you doesn't know, and doesn't care, what infrastructure the call runs over. What they experience is the call flow — who answers, how long they wait, and what they hear while waiting. That is set by the PBX, not by the cable.

What a call's path looks like across providers

The diagram shows how the layers fit together. The caller dials from their mobile — that is a mobile operator's network. The call crosses the telephone network to your number, which is connected to the PBX provider. That is where all the decisions are made: who is calling, what time it is, which menu to play and which queue to send the call to. Finally the call reaches the agent — on a desk phone connected to the office internet, in an app, or on a mobile.

Each provider along the way is responsible for one segment. If the audio cuts out, the problem could be in the office internet, in the caller's mobile network, or in the PBX. A good provider helps you check where, and doesn't just say "everything is fine on our end."

What to look at when choosing a telephony provider

• Who answers when there is a problem. This is the most important question, and the easiest to forget while comparing. Do you reach a person who knows your system, or a general call center reading a script? When your customers can't reach you, every minute costs money.
• Resilience and backup. What happens when the provider has a fault? Are there additional servers that keep working? And what happens when you have a fault — the power or internet goes down at the office? Do calls keep reaching a mobile, or does the customer hear dead air? (See redundancy.)
• Flexibility. How long does it take to add an extension, change a message, open a new number, or close the line for the holidays? Can you do it yourself in a control panel, or do you have to open a ticket and wait?

Porting and pricing — two questions to ask in writing

Porting in both directions. The business number is an asset — it is printed on business cards, signs and ads. So before you move, check two things: that your existing numbers can be brought to the new provider, and that you can take them elsewhere if you decide to leave. In Israel, number porting is a subscriber's right, but it is worth knowing in advance how long it takes and who handles the request. Details are in the article on number porting.

Pricing models. Different providers price in different ways, and you can't compare prices without understanding the model:

• Fixed plan — a monthly amount that includes a set number of minutes or extensions. Predictable and convenient, but check what happens when you go over.
• Per minute — you pay only for what you talk. Suited to low or irregular usage.
• Per extension or user — a fixed price for each employee. Simple to calculate in a growing organization.
• Add-ons — extra numbers, recordings, international numbers, international calling packages, SMS. Sometimes they are in the plan and sometimes separate.

Tip: ask every provider for a quote on the exact same scenario — number of extensions, number of lines, estimated monthly minutes and international calls. Only then is the comparison fair.

Internet and telephony — not necessarily from the same provider

Many businesses worry that moving to a cloud PBX means switching internet providers too. That is not true. A cloud PBX works on any reasonable internet connection: the office phones connect through your existing router, and calls travel to the PBX servers like any other traffic.

What is worth checking on your existing internet connection:

• Upload bandwidth — not just download. Every call also has to send voice. See bandwidth.
• Stability — latency and jitter hurt a call more than low speed does.
• A suitable router — some home routers disrupt calls. Sometimes changing a setting is enough, and sometimes it is better to replace the router.
• Backup — in an office where the phone is critical, consider a backup connection, such as a cellular router.

The advantage of keeping them separate: if you want to switch internet providers tomorrow, the PBX numbers, extensions and settings stay exactly as they are. You connect the new router, and the phones work again.

Common mistakes when choosing a provider

• Comparing only the price per minute. The real difference is in service, flexibility, and what happens when something breaks.
• Signing without checking outbound porting. A provider that is hard to leave is a provider that doesn't have to improve.
• Forgetting the mobiles. An employee who answers from a personal mobile gives the customer his private number. A SIM extension or an app keeps the business number.
• Buying a system that is too big. A call center with dozens of features isn't needed by a business with five employees. It is better to pick a provider that starts simple and adds features when you need them.

Questions to ask every provider — before you sign

Ask these questions of every provider, of every type, and write down the answers. A serious provider answers them willingly; a provider who dodges any of them is telling you something important.

About service:

1. When there is a fault at two in the afternoon — whom do I call, and who answers? A person who knows my system, or a general call center?
2. What happens when the internet or power at my office goes down? Do customers hear dead air, or do calls reach a mobile?
3. Where are the servers, and how many are there? If one server goes down — which one takes over?
4. Who sets up the system at the start, and who changes settings afterward? Do I do it myself in a control panel, or open a ticket and wait?

About numbers:

1. Can you bring over my existing numbers, and how long does it take?
2. If I leave — can I take the numbers elsewhere? Is there any condition or cost?
3. Is the number registered in my name or in the provider's name?

About money:

1. What exactly is included in the monthly price, and what is counted separately: minutes, channels, extensions, recordings, SMS?
2. What happens if I go over the plan — per-minute billing, blocking, or an automatic move to a larger plan?
3. Is there a commitment period? What is the exit penalty?
4. Is there an installation fee, and what does it include — equipment, setup, training?

About the technology:

1. Which devices are supported, and must I buy from you or can I bring my own?
2. How do we work from a mobile — an app, a SIM extension, or just forwarding?
3. Is there call recording, and how long is it kept?
4. Is there a call log that I can export myself?

A small tip: send the questions by email and ask for a written answer. A verbal answer in a sales meeting is forgotten; a written answer remains even when the contact person changes.

Red flags

• "The number stays with us." A provider that refuses to commit in writing to outbound porting is holding you hostage. In Israel, porting is your right, but a provider can make it difficult — in process, cost and time.
• A per-minute price that sounds too good. Ask what else is on the bill: extension fees, number fees, recording fees, "service" fees. The real price is the total at the bottom of the invoice, not the number in the ad.
• No control panel, or there is one and you aren't given access. Every small change — a holiday message, a new extension — becomes a service ticket with a wait time.
• "We never have faults." Every system has faults. The question is how they are handled. A provider who won't tell you about at least one fault and what was learned from it isn't learning.
• A quote that asks nothing about you. A serious provider will ask how many calls you get at peak, how many employees, whether you have branches, and what happens after working hours. A quote that arrives before the questions is a generic quote.
• A long contract with equipment "as a gift." The equipment is built into the monthly payment and the exit penalty. Calculate the cost over the entire period.
• Support only during office hours — when your business also works in the evening, on holidays, and at the end of Shabbat.
• You can't talk to an existing customer. A provider who believes in its service will let you ask someone who has worked with it for a year.

One flag alone is not a reason to rule out a provider. Three together are.

The four types side by side — full table

The table in the previous section answered "what you get." This table answers the questions that come up after setup: who configures, what happens in a fault, how you leave.

Two rows are worth lingering on. "When there is a fault on your side": only in the last column do the numbers keep ringing when the office is dark. And "How you leave": with a cloud PBX you also leave the settings behind — the menus, queues and recordings — so it is worth asking in advance whether they can be exported.

Example: one business, three invoices, and what turned up when they were broken down

A bakery with two branches asked for help because "the phones are expensive." On the table were three monthly invoices: one from an infrastructure operator, one from an internet provider, and one from a company that had installed a small PBX at the main branch years ago. No one at the bakery could say what each one covered.

• At the infrastructure operator: two phone lines for the main branch, one line for the second branch, and another line — for a fax that was thrown out two years ago.
• At the internet provider: a business plan for each branch, and at the second branch also a "telephony service" that no one had activated.
• At the PBX company: a monthly service fee on a PBX whose settings no one had changed since installation, because there was no one to call.

The result of the breakdown: the fax line and the duplicate telephony were dropped immediately. Both branches were connected to a single cloud PBX with one published number and routing by branch. The physical lines were canceled after porting, and two invoices remained: internet for each branch, and one PBX. Their lesson, and that of most businesses: before switching providers, understand what you are paying for today.