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How Much Does a VoIP Phone System Cost?

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Recently, we refreshed information in our post, “How Quickly Can You Convert to Cloud VoIP?” If you plan to convert to a business VoIP phone service, the next question is about cost. Here’s our update on how much a VoIP phone system costs. Options for implementing VoIP services are expanding—now you have three options: hosted, on-site and hybrid. Costs vary depending on your particular setup. AVOXI reviews what to consider and the associated cost factors.

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.

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.  A few questions about your current setup helps 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 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) 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 affects the overall cost of your VoIP service.

  • On premise PBX:
    • Capacity and available ports on your PBX server determine whether or not you have a system sufficient to handle VoIP services.
    • Upgrading hardware is expensive. Typical costs for an on-site PBX systems range from $500 to $1000 per user.
    • 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.
    • Typically to configure and manage an on premise PBX requires a dedicated technical employee or an outsourced technical vendor.
    • If your company has 40 or more employees, an on premise PBX may be a viable option. Just factor in the cost on ongoing maintenance and upgrades.

Adding features to your phone systems frequently incur additional charges and often require outside services to implement. Your virtual phone numbers come from a VoIP provider and have separate monthly subscription services along with usage charges.

  • Hosted PBX:
    • Cost savings apply as there are no hardware, installation, or maintenance costs associated with a hosted system.
    • Provider handles upgrades and maintenance.
    • Business-class phone features are typically standard. Some providers charge for add-on features.
    • IP phones and softphones work with IP PBXs. A computer and headset get you ready for calls.
    • Supports remote access and remote employees as long as there is an Internet connection.
    • Most Hosted PBX providers include configuration, training and operational support, allowing a non technical employee to administer your system.
    • There are a variety of plans on the market including bundled packages, unlimited plans and monthly subscriptions. Prices range from $14.99 and up depending on the services and geographies. Typically voice usage charges are extra. Discounts are available for paying for a year versus by month.

Compare cost, coverage, and services with select VoIP providers to determine the best fit for your business needs. Exact pricing depends on your specific requirements.

  • Hybrid PBX:
    • A hybrid solution is often feasible to integrate 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.
    • 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, plus 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.
    • 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.
    • Alternatively, your VoIP provider may forward virtual numbers to a SIP address or phone number. An analog PBX will likely need an IAD/gateway to accept the SIP address.

Request your VoIP service provider to walk you through what works best for your business requirements. The overall costs depend on your business needs. Not all VoIP providers offer the full array of options to integrate VoIP services into current systems. Be specific in what you require, where you make calls, where you receive calls, and bandwidth for Internet connectivity.

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 is challenging to support voice quality.
  • Not all phones are created equal. 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.

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