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Business telephone system costs will depend on three things: your business’ size, the type of phone system that you plump for, and the system provider you choose.
Generally, low-end hosted VoIP phone systems cost $10 to $25 per user, per month, while mid-range systems cost $25 to $40 per user, per month. High-end, enterprise-level systems can cost anywhere from $40 to $140 per user, per month.
This article focuses on the factors driving hosted VoIP system prices, from software features and deskphones to any hidden costs. We’ll also cover on-premise VoIP and analog telephone costs for comparison, though we recommend hosted VoIP as the most affordable, easy-to-set-up, and scalable option. Read on to learn how much it will cost your business.
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Quick Summary: How Much Does a Telephone System Cost?
Here are the costs you can expect for a telephone system in the US at a glance before we dive into the details down below.
Telephone System Costs by Business Size
Since telephone system costs for a hosted VoIP system can vary substantially, one of the easiest ways to understand costs is to break them down by business size.
Most hosted VoIP providers charge by user for each of their plans. Meanwhile, the more expensive that plan is, the greater the calling allowance, software features, and integration options, plus other improvements in functionality, that better suit larger businesses, too.
Consequently, it makes sense to judge telephone system pricing by business size. Let’s look into how much you can expect to spend for small, medium, and large business operations.
How much does a small business telephone system cost?
Small business telephone lines tend to have fewer features than the most complex setups, as well as need require fewer users to use them, too. Here are some prices you can expect:
Typical cost | Total for 10 users | |
---|---|---|
Hosted VoIP system software | $10 – $40 per user, per month | $100 – $400 per month |
IP desk phones | $50 – $400 upfront, per phone | $500 – $4,000 upfront |
▶ Read more: The best small business phone systems
How much does a medium-sized business telephone system cost?
Medium-sized phone lines have a few extra calling features, such as an auto-attendant, and you might need to have more staff using the phone system to handle greater calls. The table below details the prices you can expect for this size of system.
Typical cost | Total for 100 users | |
---|---|---|
Hosted VoIP system software | $25 – $40 per user, per month | $2,500 – $4,000 per month |
Call/contact center add-on | $10+ per user, per month | $1,000+ per month |
IP desk phones | $100 – $500 upfront, per phone | $10,000 – $50,000 upfront |
How much does a large business telephone system cost?
Large business telephone lines have the most features of the lot, often including advanced training features for calling like call whisper as well as extra reporting tools. Naturally, large businesses will be taking and making more calls, too. Below are some typical prices for systems of this size and complexity:
Typical cost | Total for 250 users | |
---|---|---|
Hosted VoIP system software | $30 – $140 per user, per month | $7,500 – $35,000 per month |
Call/contact center add-on | $10+ per user, per month | $2,500+ per month |
IP desk phones | $100 – $500 upfront, per phone | $25,000 – $125,000 upfront |
If you’d like to compare free phone system quotes that are tailored to your business, our quote-finding service can help.
Simply give us a little info about your operation by answering a few questions (it only takes a minute), and we’ll match you up with the right phone system providers for your needs. They’ll then be in touch with you directly to provide no-obligation quotes for you to compare, and answer all your burning questions. It’s fast, easy, and doesn’t cost a dime.
Hosted VoIP vs On-Premise VoIP System Costs Compared
Another option to consider besides a hosted VoIP system is an on-premise VoIP system.
With an on-premise setup, costs differ significantly from hosted VoIP. These include expenses for PBX hardware, software licenses, setup and installation, ongoing maintenance, and any required desk phones.
This tends to mean that on-premise VoIP involves higher upfront costs and setup fees, and ongoing expenses primarily relate to maintenance and configuration. The table below provides a quick comparison of the expected costs compared to a hosted system.
Cost type | Hosted VoIP | On-Premise VoIP |
---|---|---|
Setup costs | Minimal or free (provider handles setup remotely) | $6,000–$7,000 upfront for hardware (server, routers, switches, backup); $1,000 for professional setup |
Monthly subscription fee | $10–$140 per user, depending on package (Basic, Premium, Advanced) | None (no ongoing subscription costs) |
Add-ons | $10–$49 per user, per month for features like call centers or advanced communication tools | Included in upfront PBX software licenses or added for a fee |
PBX software licenses | Included in subscription fee | $4,000 upfront for team of 20 users (free if using open-source software like Asterisk) |
Maintenance costs | None (provider manages updates and scaling) | Costs vary – requires a dedicated team or outsourced maintenance |
Hardware (phones) | $50–$416 per IP phone | $50–$416 per IP phone |
Scalability | High – Add/remove users flexibly | Moderate – Limited by hardware capacity |
Control | Provider manages hosting and maintenance | Full control over system configuration and updates |
Installation time | Quick – Provider offers remote assistance | Longer – Requires professional installation and configuration |
Long-term costs | Higher ongoing costs due to subscription fees | Higher initial costs; potentially lower long-term costs if well-maintained |
Ideal for | Businesses looking for flexibility, ease of setup, and lower upfront costs | Businesses needing complete control over their phone system |
▶ Read more: The best business VoIP phone systems
Hosted VoIP Provider Costs: Real Provider Examples
Price ranges are helpful, but sometimes you need to have an example of a cost with a real-world example. Here is a table of our top-rated VoIP providers and how much you could spend.
Zoom Phone | Nextiva | Ooma | ||
| ||||
Price $20 – $35 per user, per month | Price $10-20 per user, per month | Price $13.99 – $27.99 per user, per month | Price $18.95 – $40.95 per user, per month | Price $19.95 – $29.95 per user, per month |
Hardware Costs: IP Phone Prices
An IP phone, also known as a VoIP phone, is a type of desk phone that’s compatible with VoIP. Like VoIP software packages, IP phones get more expensive the more sophisticated they are. High-spec IP phones may come with features including bluetooth connectivity, large color touchscreens, and built-in cameras for video conferencing.
Unlike with VoIP software, though, most suppliers will enable you to buy the phones outright – so you’ll pay for them once, upfront, then they’re yours.
But how much do IP phones tend to cost? Let’s take a look:
IP phone type | Typical cost (per phone) |
---|---|
Low-spec IP phones | $50 – $100 |
Medium-spec IP phones | $100 – $220 |
High-spec IP phones | $250 – $416 |
▶ Read more: The best office phones for businesses
How Much Does an Analog Phone System Cost?
Analog phone systems, also known as landlines or POTS (Plain Old Telephone Service), rely on traditional phone networks. While they are being phased out in favor of VoIP, analog systems can still be a short-term solution for businesses. Unlike residential landlines, businesses require multi-line phone systems to handle multiple calls simultaneously.
Here are the key costs to consider:
- Line rental: Starts at $50 per month, with additional lines costing around $25 each. Verizon and AT&T offer tailored plans based on location and line requirements.
- Hardware: Telecom equipment (PBX or KSU) and desk phones are necessary. Desk phone prices vary:
- Two-line: $50–$100
- Four-line: $150+
- Six-line: $250+
- Installation and configuration: Expect to pay $150–$250 for line installation, plus technician fees to configure your PBX or KSU for optimal use.
Analog systems are less flexible than VoIP and require dedicated phones, but they remain a viable option for certain business setups.
▶ Read more: The best multi-line phone systems for businesses
How Much Does it Cost to Install a Telephone System?
That depends on the type of telephone system you choose. Let’s take a look at the typical figures:
Type of phone system | Typical installation cost | A note on the process |
---|---|---|
Hosted VoIP | Free | Hosted VoIP systems are simple to install, and system providers are normally happy to help with the process remotely (either by talking through it over the phone, or sharing tutorial guides) at no extra cost. |
On-premise VoIP | Around $1,000 | On-premise VoIP must be installed and maintained by experienced technicians, making it a pricey endeavor. |
Analog | $150 – $250 (plus configuration costs) | You’ll need a professional to install your analog phone lines. The amount they charge will depend on the size of your business, and thus the number of lines that need to be installed. As with on-premise VoIP, you’ll also need to pay a technician to configure your PBX or KSU. |
You should now know exactly how the costs of business telephone systems break down and vary between hosted VoIP, on-premise VoIP, and analog options. In short, hosted VoIP is typically the most flexible and scalable choice, with costs ranging from $10 to $140 per user/month depending on business size and features.
On-premise VoIP involves higher upfront investments but offers full control, while analog systems are a less flexible, short-term solution with ongoing line rental and hardware costs. Installation costs vary, with hosted VoIP usually free, on-premise requiring $1,000 or more, and analog systems costing $150–$250.
But if you’d like to find out exactly how much a phone system is going to cost for your business, since some VoIP providers use custom pricing, our free quotes comparison service can help you out. Simply answer a few quick questions, and you’ll receive no-obligation quotes customized to your requirements, saving you time and effort. Why not get started today?