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How Much Does an Office Phone System Cost?


While very small businesses can subsist on a home office phone system, companies of seven or more employees should consider the move to a more sophisticated system designed for business use. The time and money spent in researching and purchasing a business phone system are quickly recouped by increased productivity and professionalism within the company. Today’s phone systems for small businesses offer auto attendant and conferencing features, as well as music on hold, customized greetings, advanced voicemail applications, and much more.

Considerations for a small business phone system

For office phone systems, the standard has been Private Branch Exchange (PBX), an analog system based on standard land lines and a main console or cabinet that dispatches calls and information to the phones in its exchange network. With so many affordable options available, take a moment to consider the following questions:
  • How many lines or extensions do you need for your office phone system?
  • What are your plans for business expansion?
  • What features and functions do you need for your office phone system?

Types of Office Phone Systems

A plethora of commercial phone system vendors saturate the market selling the most common configurations for modern office phone systems: Key System Unit (KSU), KSU-Less, Voice over Internet Protocol (VoIP) and Private Branch Exchange (PBX). These are discussed in detail below:
  • KSU-Less: For offices of fewer than 10 employees, a low-cost KSU-Less system is the best option. KSU-Less system functions are contained within the phone itself, which is then programmed to ring to appropriate extensions, play customized greetings, and hold and transfer calls. Unlike the larger configurations, KSU-less systems do not require professional installation.
  • Key System Units (KSU): KSUs use a central control unit to handle multiple calls simultaneously. Perfect for small- to medium-sized organizations of around five to 45 employees, KSU’s act as a hybrid between the cost effective simplicity of KSU-less and the robust features of a PBX.
  • VoIP or Voice over IP: These systems are gaining an edge in commercial enterprise, owing to their use of Internet streaming data to process voice calls, which practically eliminates long distance and even local calling fees.
  • PBX systems: Due to their higher up-front costs, tend to be cost prohibitive except for medium-to-large size companies with more than 50 employees. Operating from a central cabinet, a PBX can gracefully handle large call volumes, including transferring, queuing, forwarding, voicemail, and much more. A traditional PBX connects internal business phone lines, as well as connecting to the public switched telephone network (PSTN), while an IP-based PBX uses the Internet to perform all the same functions.

How Much Does an Office Phone System Cost?

  • VoIP handset typically costs around $125 to $275 per phone, plus a monthly service fee ($20 to $80 for unlimited data plans). The router may be purchased outright or bundled by the vendor into the overall cost. A new business-class router costs around $200 to $500. For example, a WAN (wide area network) router with 16 Ethernet ports costs around $400 - $500.
  • A complete PBX telephone system typically costs between $850 and $1,000 per employee. The most expensive part of the system is the cabinet, which ranges in price from $1,500 to $10,500. Due to scaling, costs per employee are lowered as the number of employees rises.
  • Prices for Key System Units vary significantly depending on the features your business requires, falling anywhere between $325 and $1,000 per employee on average.
  • KSU-less office phone systems range from $125 to $250 per phone on average, plus a one-time setup and installation fee.
  • Sample cost for a Key System Unit that supports six lines and 16 extensions: $400 to $500 new. For a system that supports eight lines and 24 extensions, costs range from $500 to $1,000 depending on the features chosen.
  • With KSU’s, PBX and VoIP systems, wiring and installation costs may apply, but are often bundled into the price of purchase. Be sure to confirm this with the vendor.

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