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How Much Does a VoIP Phone System Cost?

What Is VoIP?

VoIP and Voice over IP are common abbreviations for Voice Over Internet Protocol. VoIP systems use special equipment to route voice and multimedia information over the Internet rather than using an analog phone line. Over the past decade, businesses have been migrating from traditional telephone systems to Internet telephony due to its efficiency and low cost. The cost to add extensions is lower with VoIP than  for PBX or Key Systems, long distance charges are reduced by as much as 80 percent with broadband telephony, and calls between VoIP users are generally free. On top of that, IP-based communications significantly reduce infrastructure costs because voice and data are run over a single network.

VoIP Business Phone System Features

The central device is a modest sized dedicated server (often called an IP PBX) running on accompanying software. With less physical infrastructure, VoIP still provides all of the features and functions you need and expect from a traditional PBX phone system including:
  • Auto attendant
  • Caller ID, call waiting, call forwarding, conference calling, video conferencing
  • Call monitoring and call recording
  • Voicemail/Voicemail-to-email
  • Web-based management
  • Easy system expansion and integration with other business systems
  • Remote location access to phone system features

VoIP Phone System Considerations that Affect Your Budget

  • A major factor in determining overall VoIP phone system costs is choosing between a hosted or on-premise phone system. A hosted system costs less up front, but involves a higher monthly fee, as the system’s central hardware is stored and maintained by the provider. In contrast, an on-premise system costs more up front, but typically provides savings over the long term on maintenance costs.
  • Once only cost effective for medium and large businesses, today even the smallest enterprises enjoy the benefits of this technology thanks to the dropping costs of tech hardware. For companies with multiple locations, remote branches, or telecommuters that are currently connected on a Local Area Network (LAN) or Wide Area Network (WAN), VoIP offers significant cost savings by allowing users to share all phone system features across all locations.
  • IP phone system costs vary considerably depending on selected optional features, as well as your current telephony infrastructure and data network. Installation and wiring make up a significant portion of costs. Any existing IP phones can potentially be used with a new system, but analog phones require an adaptor. VoIP systems involve a monthly service fee. Bear in mind that while initial costs may be substantial, most companies see cost savings in the long run as administrative services, long distance, and interoffice calls are less expensive.

How Much Does a VoIP Phone System Cost?

  • A Cisco Smart Business Communication System UC500 Series call processing unit costs around $2,000 to $2,300 (note: this cost is for the unit only). This system supports up to 104 phones in multiple locations, integrated voicemail, automated attendant, music on hold capabilities, and much more.
  • An Aastra AastraLink Pro 160 Small Business IP PBX call processing unit costs approximately $750 to $900 (note: this cost is for the unit only). This system supports up to 50 extensions, auto fax detection and routing, visual and standard voicemail, call forward, three-way conferencing, and much more.
  • A new Cisco SPA525G2 5-Line IP Phone with color display, 32-button attendant console, and Bluetooth connectivity typically costs $250 to $300. Many phone system vendors bundle phones into the entire package costs, and price negotiation is often possible.
  • Unlimited data plans tend to be the most popular among offered monthly plans, ranging from around $30 to $100 per month for business IP PBX.
  • Average costs per line for hosted IP PBX with an 800 number, auto attendant, and other features is generally $30 to $50 per month.

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