Ready to upgrade your business communication system? VoIP phone systems offer a cost-effective and flexible alternative to traditional telephone systems. But before you make the switch, it’s important to understand the costs involved. Here is a clear and upfront look at the key factors that determine the price of a VoIP system, including hardware, general costs per user, and hidden costs. We’ll provide you with all the information you need to budget accurately and make an informed decision for your company.
The Breakdown:
- VoIP phone systems can improve your bottom line and save you money.
- VoIP phone systems may require additional hardware such as internet capable phones.
- Cloud-based phone systems can provide more features at a fraction of the cost.
Average Cost of VoIP Phone System:
The average cost of your VoIP System will be dependent on three main issues:
- Company Size
- Features Needed
- Service Provider
The average cost per line/per month is around $15-$25, although you can find more expensive systems. However, that does not include other costs such as startup costs and maintenance.
| Cost Type | Description | Average Cost |
| Startup Costs | ||
| Hardware | VoIP phones, routers, and other necessary hardware | $100-$500 per user |
| Installation | Professional installation and setup | $500-$2,000 |
| Training | Employee training on the new system | $500-$1,000 |
| Ongoing Costs | ||
| Monthly Services | Monthly service fee for the VoIP system | $10-$50 per user per month |
| Maintenance | Ongoing maintenance and support for the system | Varies |
| Upgrades | Upgrades and additions to the system | Varies |
With VoIP, you’ll generally have two types of costs to consider – start-up costs and ongoing (monthly) costs. Your start-up costs will vary depending on how drastically you’re changing your telecom system. These costs for VoIP are almost always lower than those for traditional phone systems – for both small and large companies.
In terms of ongoing costs, you’ll want to account for things like add-on features (there are dozens these days) and the number of lines. Determining the features you need can help you determine the budget you need for a VoIP phone system.
VOIP Phone System Start-up Costs
Cloud vs. On-site Hosting Options:
While some VoIP customers opt for on-site hosting for their system, most will choose to use cloud-based systems. Cloud-based systems are much easier scaled and flexible, meaning adding lines when you gain employees is much quicker. These systems allow for remote and mobile access much easier as well. Your employees will just need to download the VoIP provider app on their phones and you’re good to go.
Also, most VoIP systems offer some customizability with their services that will fit most business needs. These systems are hosted in secure data centers, providing a high level of reliability and reducing downtime. On the other hand, on-site systems have limited capacity and require internal IT support for maintenance and upgrades. Each time you want to upgrade your system or improve it, you bear the brunt of that cost.
Equipment
Does your company already have telecom equipment that can connect with a VoIP system? If you’re not sure, a provider will be able to advise when you’re receiving a quote. Whether you already have compatible equipment or not, you’ll want to think through what type of equipment is the best fit for your workplace. You have several options here…
- Utilize equipment employees already have – smartphones, tablets, desktops, laptops – and direct your business line through them, purchasing only headsets for call privacy
- Install VoIP desktop phones
- Purchase VoIP handset (wireless) phones
Some businesses enjoy the flexible, on-the-go perks of just using a smartphone as their business phone system and do away with their desk phones. For other businesses, they need that dedicated desk phone for their company. Most companies have four options to choose from
| Conference phone | $300+ per unit |
| Desktop phone | $50+ per user |
| Handset phone | $55+ per user |
| Headset equipment | $20+ per set |
Bandwidth Speeds:
Something to keep in mind with VoIP is that you’ll see the best voice quality with high internet connectivity. Most businesses already have this in place, since multiple employees are sharing Internet connection on an everyday basis. But if you’re currently experiencing issues with your internet running slower at times, it would be smart to consider upgrading your bandwidth. While VoIP phone systems don’t need a ton of bandwidth, you’ll still want to make sure your Wifi system is prepared for the switch to internet phones. Here are some recommendations by the FCC on the minimum bandwidth needs for specific activities:
VoIP experts recommend broadband service of around 10 MBPS for good VoIP service. If you’re unsure about your current internet quality, you can always ask your current internet provider or check your router information. If you’re looking to upgrade to an even faster and more VoIP-compatible internet, look into cable- or fiber-based options for the best quality voice results.
Training
VoIP trainers can show your employees how to operate their new equipment, route business calls to their smart-devices, connect their headsets to their desktop or laptop, add new users when hiring and on-boarding, and how to utilize all the features your company is paying for. The add-on training price will vary across different VoIP providers. This is something you can negotiate with providers when signing up. Some providers may offer this training for free.
VOIP Phone System Ongoing Costs
Cost per User
In terms of company size, no matter how many employees your business needs to accommodate with VoIP, it can be done. One of the top perks of VoIP companies typically enjoy is its easy scalability. Adding more lines when your business grows and hires is a piece of cake. Of course, the more employees you want to add to the plan, the larger the monthly cost. However, as with many business services, you’ll be rewarded for buying in bulk - signing up a large number of lines usually means discounts and lower rates.
On average you can expect to spend anywhere from $10-$50 per user/per month. This will be dependent on features and the number of users.
Some plans will allow you to pay per usage rather than line – meaning, you pay for the time you spend on the phone monthly, regardless of how many users you have. This might make sense for businesses with fewer employees in industries that use the phone infrequently. Make sure you ask your provider about different options.
Subscription and Features
As with traditional phone plans, your VoIP provider will offer different tier packages depending on your business’s needs and desired features. The highest tiers will have the largest selection of features – including call recording, video conferencing, voicemail transcription, integration with external mobile systems and CRM’s, and so on. Lower-tier packages will typically give you all your telecom basics – calling, voicemail, mobile app connectivity, as well as customer support – but you’ll be limited in what you can use your system for. Of course, each provider has their own tiers and different features included in each, so make sure to analyze your different options before choosing a provider. To look through a fuller list of VoIP features, read here.
Hidden Costs of VoIP
Hidden Costs of VoIP and rewrite:
There can be some drawbacks of VoIP phone systems that we haven’t mentioned yet, this includes:
- Data or security leaks
- Phones going offline if the wifi goes down
- Choppy internet connections
What you’ll want to think about – generally – is the risk of using the internet for any business assets and what it could mean for your company’s daily functioning. For most customers, this isn’t a big concern as business Wifi systems have improved dramatically. Customers also find the savings from VoIP costs to be worth it. Not only that, but putting in safety measures to avoid leaks or phishing attacks can help ensure that your VoIP system stays strong for years to come! If you need to improve your WiFi, you'll want to talk with your service provider before using a VoIP system.
Overall, VoIP technology is rapidly improving and businesses across the U.S. and elsewhere are quickly adapting it. Studies across the board show you will save money from making the switch. For example, VoIP provider Kunnect recently came out with a study that demonstrated the cost savings for a mid-size company with all expenses (start-up and ongoing) considered, as well as productivity gains compared to their previous phone system. They found that the average amount saved per year was $5,000, even after start-up costs were factored in. in terms of productivity, they estimated almost $500 in gains per user, totaling almost $25,000 a year for ~50-person company. Add that onto your annual revenue and see what you’re missing out on!
FAQ about VoIP Business Phone Systems
If you're interested in a VoIP phone system, the best next step is to research top providers. We're here to help! Compare Nextiva vs. RingCentral and Vonage vs. RingCentral. Also consider top mobile VoIP providers such as Grasshopper.
Visit us here to get started on price comparisons and find out exactly what you can expect to pay for your company’s specific needs. Our goal is to find you the best telecom service, increase your ROI, and ultimately make your business happier! Remember that for the best buying experience possible, we recommend comparing just 3-5 different suppliers and what they have to offer (don't over-complicate the decision by comparing too many options!) and prepare for your call with these tips to get the most out of your phone call with each supplier.
Looking to analyze VoIP for your particular industry? Check out why VoIP is a winning option for call centers, restaurants, and more.