Why does your business need a VoIP phone system?
A VoIP phone system is better than a landline phone system in different ways for your business.
One, it allows you to make calls on your existing mobile phones and laptops so you don’t need to purchase a physical landline phone for every new employee.
Second, it is easier to scale it since it doesn’t require a physical line for each new connection.
Third, it provides you with extra features like call centre analytics and video conferencing.
Four, it costs less than the landline phone, both in terms of installation and running charges.
And that’s what will be discussed in this article – VoIP phone costs and whether is it worth switching to VoIP.
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Cost of VoIP
The cost of the VoIP phone systems will vary depending on the provider you choose, the plan you opt for, the system you intend to install and the extra features you want to get. Generally, you can expect to pay £7- £40 per user.
VoIP pricing consists of VoIP phone price, provider package costs, VoIP connectivity devices costs and installation costs.
Let’s look at them in detail.
1. VoIP phone price
IP phone sets can range from £40 – £160 depending on the company and the functionality. A basic VoIP desk phone will include programmable buttons, LCD display, ethernet ports, 2 SIP accounts and conferencing for 5 participants.
A high-end desk phone, conversely, could have up to 16 SIP accounts, a large colour display screen, PoE compatibility, Wi-fi integration, more function keys, Android integration, noise cancellation and enhanced functionality in addition to everything that you get with a basic phone.
| Cost | VoIP |
|---|---|
|
Basic |
£40 |
|
High-end |
£100 - £160 |
|
Executive |
£200 - £300 |
2. Provider package costs
This includes the monthly charges per line your business has to pay. They vary between £7 – £50 per user, depending on the provider, the plan, the contact type (monthly or annually) and the inclusion of extra features.
If you opt for basic features like:
- Unlimited VoIP calls.
- Voicemail.
- Customer support.
- Call holding and forwarding.
You can expect to pay between £7- £10 per user per month.
If you decide to shift to expensive features like:
- Call centre analytics.
- CRM integration.
- Voicemail to text service.
- Automatic callbacks.
- Unlimited international calls.
You should be ready to pay £15 – £30.
More advanced features like video conferencing, virtual phone numbers and ring groups come at an extra price (£40-£50).
| Type of functionality | What's included | Cost per user per month |
|---|---|---|
|
Basic |
Unlimited VoIP calls, voicemail, customer support, call holding and forwarding. |
£7- £10 |
|
Expensive |
Call centre analytics, CRM integration, voicemail-to-text service, unlimited international calls in addition. |
£15 - £30 |
|
Advanced |
Video conferencing, ring groups in addition. |
£40- £50 |
On top of these costs, some companies might charge usage costs for the time spent on making calls using your VoIP phone system (similar to a phone bill).
3. VoIP connectivity devices costs
One of the biggest advantages of VoIP against landlines is that it can be set up on your existing cell phones, tablets and laptops. You may not necessarily need additional hardware.
But nonetheless, you need some pieces of headsets to use with your existing devices. This includes headsets with microphones and analogue telephone adapters (ATA). Let’s see why they are important and how much they cost.
Headsets with microphones connect with your computers and cell phones to improve the sound quality. Although you can simply rely on the built-in microphone and speakers of your existing devices, they are usually not suitable for highly professional usage, and neither are they private.
When you and your employees use headsets, they can handle customer inquiries privately with better communication quality. They can come at different prices from £20 – £80.
ATAs are devices that plug into your traditional landline phones and convert them into VoIP phones. You can then make and receive calls easily over the internet. They are available in the price range of £55 – £180.
| Type of connectivity device | Cost |
|---|---|
|
Headset with microphone |
£20 - £80 |
|
Analogue telephone adapter |
£55 - £180 |
4. VoIP installation costs
If your business utilises softphones (VoIP phone app on cell phones), there will be no setup or installation cost. But if you want to set up an in-person call centre or use SIP trunking (consolidation of multiple communication channels into a single trunk), installation costs will be included.
In-person call centre on on-premises call centre includes the cost of all the VoIP desk phones you purchase and the plug wires from them to your users’ computers. You might also need at least one full-time expert for managing and troubleshooting.
SIP trunking enables you to convert your analogue PBX phone system into a virtual PBX system designed to manage VoIP calls. It includes a session border controller that comes between £300 – £1000 generally. A full-time expert will also be needed in this case.
If you have a small business, choosing a hosted VoIP system could be a better option as it will only cost you around £7 – £50 per month per user and the VoIP provider will be responsible for all the maintenance and management.
An example of the total cost of a VoIP setup
Let’s understand the total cost of a VoIP setup for your business through an example.
Suppose you have a team of 10 call agents for whom you purchase a basic VoIP desk phone costing £40 each. That equates to £400.
Then you choose the expensive VoIP package including CRM integration and unlimited international calls for all. The package costs you £20/user. That equates to £200.
Then you choose to buy headsets for each of the agents to improve their communication. Each comes at £40. So that equates to £400.
Finally, you made some infrastructure changes and bought a few ATAs for your existing landline phones. That resulted in the installation charges of £400.
In total:
Monthly charges of 10 agents = £200
One-time purchase of desk phones = £400
One-time purchase of headsets = £400
One-time installation charges = £400
Thus, you would pay an initial setup cost of £1200 and an ongoing monthly cost of £200 for this VoIP setup.
Hidden costs of VoIP phone system
Apart from the general VoIP phone costs mentioned above, there may be other hidden costs associated with it too. Although these VoIP costs are mentioned in the bill you receive, but since you might not be aware of them explicitly when setting up the system, they may be called hidden costs.
- E911 fees: This is the fee charged by the local government to enable emergency response services.
- State & local taxes: Taxes vary by country and state. Normally, they are anywhere between 3.5 % to 8.5% of the service rendered.
- Early termination fee: ETF is charged by the provider if you leave the contract early. You can control this fee while setting up the contract in the first place by negotiation.
How to save cost using VoIP?
Now that you know about all the VoIP costs, let’s see how it can help you save money when compared with a landline phone system.
- VoIP services offer substantially reduced rates on international and local calls.
- You don’t need to have a desk phone necessarily to start managing calls with VoIP. After installing the VoIP app on your laptop and cell phone, these devices can become your VoIP phone. Thus it saves all the associated costs with purchasing desk phones.
- VoIP phone system gets installed easily without needing expensive copper wires in the case of the landline phone system.
- Scaling a VoIP system is as easy as adding up a virtual extension. No need for adding new physical telephone lines.
- VoIP services come with advanced features like conferencing and auto respondent that you have to pay extra when using a landline phone system.
Factors affecting the cost of a VoIP phone system
The following factors will affect the cost of setting up a VoIP phone system at your business site:
1. Long-term vs short-term contracts
Short-term contracts (month-to-month) offer greater flexibility, allowing businesses to adapt quickly to changing needs however, they come at a higher monthly cost, as providers often charge a premium for the reduced commitment.
Long-term contracts typically offer lower monthly rates because providers incentivise longer commitments with discounts and lower fees. Providers may waive or significantly reduce initial setup and installation fees for long-term contracts as well.
2. On-premise vs hosted VoIP system
An on-premise VoIP system requires you to purchase the hardware and software on-site. This includes servers and network equipment in addition to VoIP phones and headsets. This can increase the cost considerably. Additionally, you will be responsible for the ongoing maintenance and troubleshooting which would require the services of an in-house IT staff. They would come with monthly salaries as well.
Hosted systems, on the other hand, are managed by your VoIP provider. This option typically involves lower upfront costs as your business pays a monthly subscription fee rather than purchasing the whole hardware. The responsibility of the maintenance falls on the provider as well which reduces the cost even more.
3. Billing cycle
Most VoIP providers give you the option to pay the charges monthly or annually. However, if you opt to pay annually, you get a discount which may vary between 10%-30%. For example, a VoIP package costing you a monthly fee of £20 will be available at £15 if you pay annually (discount of 25%).
These factors should be taken into account before finalising the best VoIP package for your business.
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FAQs
The VoIP cost per month depends on the provider, contract type (monthly or annually), plan (on-premises or hosted) and features. It will range from £7 – £50 per month per user without the hardware cost included of VoIP desk phones or any other device you would need.
You don’t need a special phone for VoIP to set up. The existing landline desk phone can suffice. The only thing you need additionally is the analogue telephone adapter (ATA) that converts the analogue signals into digital signals. After it’s attached, you can start managing calls via internet.
