VoIP, also known as Voice over IP (Internet Protocol), allows you to send and receive calls over the Internet instead of through a traditional phone company landline. To deliver this phone system to their customers, VoIP providers use a dedicated or shared IP PBX or Internet Protocol Private Branch Exchange in the cloud. The virtual PBX manages your VoIP service, routes your calls and allows you to personalize the service to your specific needs.

Related: VoIP Call Routing

If you plan to convert to a VoIP phone system for business, one of your top questions is probably about cost. Costs vary depending on your particular phone service setup, which we'll review below!

VoIP Phone System Cost

The main advantage to switching to a VoIP phone system is price. Typically, VoIP provides less expensive local and international calls than a traditional phone line. There is much less hardware involved, and the solution increases access to call reports, call recordings and forwarding settings. Reviewing your current setup will help guide you to the right VoIP phone system solution and affects your price for VoIP services.

What is Your Current PBX Setup?

If you’re interested in VoIP phone services, the first step is to decide whether or not you want to integrate with your current PBX setup or establish a separate Cloud PBX system.

  • On-premise PBX: Your onsite PBX requires regular updates and maintenance for which you are responsible. Current hardware typically supports IP phones and the call server supports IP signaling and network routing.
  • Hosted / Cloud PBX: Your provider hosts and manages your PBX as a service from a remote location or in the “cloud.” The benefit is that maintenance and upgrades come with the service from your provider.
  • Hybrid PBX: Some providers (AVOXI is one) can integrate with your on premise PBX hardware or your Hosted PBX to provide VoIP services for your local and toll free virtual numbers. This integration may require VoIP gateway hardware in rare cases. Most integrations are complete with a SIP trunk or IP address forward.

How Does Pricing Vary Based on PBX Setup?

While there are numerous VoIP providers, the type of PBX you have greatly affects the overall cost of your VoIP service. Let's take a review what costs should look like with each PBX setup below.

On Premise PBX:

Capacity and available ports on your PBX server determine whether or not you have a system sufficient to handle VoIP services. Typical costs for an on-site PBX system range from $500 to $1000 per user, and upgrading hardware or adding features is expensive and often requires outside services to implement. Typically, to configure and manage an on premise PBX requires a dedicated technical employee or an outsourced technical vendor.

On the plus side, newer PBX systems generally have an IP port or CTI (computer-telephony integration) to install VoIP services into the business phone system.

Your virtual phone numbers come from a VoIP provider and have separate monthly subscription services along with usage charges.

Hosted PBX:

With a hosted PBX, cost savings apply as there are no hardware, installation, or maintenance costs associated with a hosted system. Most Hosted PBX providers include configuration, training and operational support, allowing a non technical employee to administer your system. Business-class phone features are typically standard, and some providers charge for add-on features.

IP phones and softphones work with IP PBXs-- all you'll need is a computer, internet connection, and headset and you're ready for a call!

There are a variety of plans on the market including bundled packages, unlimited plans and monthly subscriptions. Prices typically range from $14.99 USD and up depending on the level of service, with discounts are available for paying for paying yearly instead of monthly.

Hybrid PBX:

A hybrid solution is often possible, integrating with an on premise (and frequently outdated analog) PBX. Integration with an analog onsite system usually requires a gateway or IAD (Integrated Access Device) connected to a port on your PBX server. A gateway solution allows you to continue with a current phone system while adding additional capabilities with new VoIP numbers—especially useful for international calls while using the on premise for local, traditional call traffic.

IADs vary in price from the base price of the hardware to monthly subscription charges. For example, your cost can include a non-recurring charge of approximately $100 to $375 for hardware and setup, and you may have charges that range from $120 to $450 monthly. In some instances, the charges include free minute bundles for the US and Canada. For AVOXI, price varies based on number of ports and associated minute bundles.

Other Factors Affect VoIP Phone System Cost

When making the decision to switch to a VoIP phone system, there are a few other costs to keep in mind.

  • A VoIP phone system depends on reliable Internet service. Make sure that your service and Internet technology (routers) can handle this type of telephony system. High speed (over 10Mg) cable or fiber based Internet service is preferred. Wireless or satellite Internet access can make it challenging to support voice quality.
  • Make sure that your current phones are IP ready and can handle VoIP calls. If not, factor the price of replacement phones into your start-up costs or determine if softphones serve your needs.

As cloud technology expands, VoIP phone service provides an extremely cost-effective, secure and reliable telephony solution for businesses of all sizes. If you're looking for an affordable, simple solution, AVOXI's Hosted PBX system AVOXI Genius starts as low as $4.99/month. For even more features, businesses can upgrade for $24.99/month!

Contact an AVOXI VoIP specialist to discuss your requirements and get a quote based on your needs.