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.
Comparing Top VoIP providers: Features & Pricing
Now, let us compare the top VoIP service providers. We have listed each of the provider’s entry-level and most expensive package details, as well as some prominent features and add-ons.
The table below will give a comprehensive idea about the average pricing of the top VoIP brands in the UK:
| Provider | Entry Price (user/month) | Top Tier Price (user/month) | Features | Call features |
|---|---|---|---|---|
|
Ring Central |
£13 |
£34 |
|
|
|
Nextiva |
£12 |
£20 -£60+ |
|
|
|
Dialpad |
£12 |
£20+ |
|
|
|
Zoom phone |
£12 |
£17 |
|
|
|
Avaya |
£16 |
£32 |
|
|
Pricing Models for VoIP Provider Packages
Providers in the UK have different pricing structures for their VoIP services, features, hardware, and additional features. However, there are some industry pricing models commonly followed. These models provide a foundation for understanding the factors that are actually calculated when determining the cost of VoIP.
Monthly/Annual subscription
In this model, the VoIP connection operates on a contract basis, either on a monthly or annual basis. Consumers receive access to unlimited calling, internet access, and the bundle of features listed in the package, with a flat monthly fee charged at the start of each month. From a consumer perspective, monthly subscriptions are easier to predict the costs of and offer more flexibility because of their short duration.
However, annual plans can save money for businesses, as most providers offer discounts, additional features and perks for a long-term contract.
Tiered plans
With tiered plans, VoIP providers may bundle a range of basic features (suitable for domestic purposes or small businesses) for a starting package. Then, for the middle and higher tiers, more complex features are added, like video calling, conferencing, and international calling, perfect for large-scale businesses and enterprises.
Per-user/per-line pricing
Other than charging subscription fees, VoIP providers also offer subscriptions according to user count. Within a range of £10-£35, one VoIP user gets access to internet calls, video calls, online messaging and additional features depending on the extent of the package. Say, for 5 people, this pricing would be multiplied five times for the final bill. This sort of pricing is best suited for small businesses with a fixed number of employees, so the costs become predictable over time.
VoIP Cost Breakdown By Business Size
A VoIP system scales with your team in both complexity and cost. Here’s a cost breakdown for a more realistic look at the initial setup costs and ongoing monthly fees for small, medium or large businesses:
| Business Size | Typical Setup (One-Time Cost) | Estimated Ongoing Monthly Costs |
|---|---|---|
|
Solo Operator (1 User) |
Optional IP Handset: £60 (can use free softphone app on mobile or laptop) |
£15 |
|
Small Business (5 Users) |
IP Handsets (5): £300 |
£75 |
|
Growing Team (20 Users) |
IP Handsets (20): £1,200 |
£300 |
Note: These costs are estimates. Your actual costs will depend on the specific hardware options, provider package, and whether any negotiated discounts were applied for annual payment or additional users.
VoIP Contract Length Cost Considerations
Your contract length directly affects your monthly price and flexibility. Short-term contracts provide flexibility, whereas long-term ones offer substantial savings.
| Contract Length | Impact on Monthly Cost | Pros | Cons |
|---|---|---|---|
|
Rolling Contract (Monthly) |
High monthly cost: providers are charged a premium for the ability to cancel at any time and without penalty |
It offers maximum flexibility and is well-suited for startups with unpredictable futures or those looking to test a provider.
No long-term commitment |
You won’t get a discounted rate.
Prices are likely to increase with shorter notice
|
|
1-Year Contract |
Moderate monthly cost. It also offers a solid discount over monthly rolling contracts |
Offers a great balance between flexibility and savings.
It allows you to secure a rate for one year |
You are locked in for a year. If you leave early, your provider will charge a fee |
|
2- to 3-Year Contract |
Lowest monthly cost. Longer commitments offer the best per-user pricing |
Substantial savings on monthly fees.
Providers can refuse setup or hardware costs to close a longer deal |
It offers less flexibility for your business needs, and the technology is restricted for a longer time.
Contract termination fees can range from substantial to high |
Key Takeaway: If you run a small- to medium-sized business, a one-year contract is the best compromise. You get a big discount over a month-to-month deal, but without the long-term commitment of a 2- or 3-year contract.
Choose Monthlty Rolling If:
- You are a relatively early startup with an unknown growth path.
- Your team size fluctuates seasonally.
- You’re trying out VoIP but need some flexibility.
- You appreciate the flexibility to change providers within a short time frame.
- You are willing to pay 20 to 30% more for flexibility.
Choose 1-Year Contract:
- You’re an established small business with steady staffing.
- You need to go 10 to 15% lower whilst keeping reasonable flexibility.
- You can make solid predictions about your needs for the next year.
- You’re looking for a mix of savings and commitment.
Choose 2- to 3-Year Contract:
- You’re a growing SME with predictable growth plans.
- You desire a meaningful reduction (20 to 30%) in monthly expenses.
- You have to schedule correctly 2 to 3 years.
- You’ve read up and know you’re right about your provider.
- Actually setup fee waivers and discounts on hardware, do the math.
VoIP Vs PSTN: A Side-By-Side Cost Comparison
The UK will formally remove and replace the traditional PSTN (Public Switched Telephone Network) as part of a larger transition known as the Big Switch Off, taking place in January 2027. By understanding how much costs differ between PSTN and VoIP systems, businesses can plan their transition and budget appropriately.
Here’s a breakdown of costs for an average 10-user company:
| Cost Element | PSTN/ISDN (10 Users) | VoIP (10 Users) | VoIP Annual Savings |
|---|---|---|---|
|
Line Rental |
£300 to £400/month |
Included in the licence |
£3,600 to £4,800 |
|
Per-User Licence |
- |
£140/month (£14 per user) |
NA |
|
Call Charges (UK) |
£150 to £250/month |
Unlimited UK calls |
£1,800 to £3,000 |
|
International Calls |
£50 to £100/month |
£200 to £40/month |
£360 to £720 |
|
Hardware (PBX System) |
£3,000 to £8,000 upfront |
£400 to £1,600 |
£2,400 to £6,400 |
|
Maintenance Contract |
£60 to £120/month |
Included in hosted service |
£720 to £1,440 |
|
Engineer Callouts |
£100 to £200/visit |
Remote support (free) |
£600 to £1,200 |
|
System Upgrades |
£1,000 to £3,000 every 5 to 7 years |
Automatic (included) |
£140 to £430 |
|
Number Changes |
£50 to £100/charge |
Free (self-service portal) |
£300 to £600 |
|
Total Monthly Cost |
£560 to £870 |
£160 to £180 |
- |
|
Total Annual Cost |
£6,720 to £10,440 |
£1,920 to £2,160 |
- |
Key Savings Breakdown:
Businesses save as much as 50 to 70% on total telephony costs when migrating from PSTN to VoIP. The savings add up over time because:
- No Hardware Worries: Traditional PBX systems have a lifespan of 7 to 10 years, after which they need to be replaced at minimal expense. VoIP runs on cloud-hosted infrastructure that your provider keeps up to date.
- Predictable Monthly Costs: Many VoIP packages include unlimited UK calling, so you don’t face unexpectedly high call charges.
- Free Scalability: Adding or removing users with VoIP is completed in minutes and is accessible online. With PSTN, you would have to wait for engineer visits and install extra lines.
- Remote Work Enablement: VoIP softphone apps allow employees to do their jobs from any location without the expenses associated with mobile billable minutes, whereas PSTN ties you down to physical office locations.
Want to learn more about the difference between VoIP and PSTN? Then see our guide: VoIP vs PSTN: Which is better for Your Business?
How to choose the most affordable VoIP provider?: Key Questions
To make the best use of your VoIP budget, you must choose a reliable provider. But what exactly tells us that a provider is competitive and offers competitive pricing? Below, we discuss some essential points, including the factors to choose and the signs to look out for before signing up with a provider.
What is the pricing strategy that the provider follows?
As a starter, take note of the way VoIP software costs are structured by the provider. Whether they have listed the prices as per-user bundles, tiered packages or monthly or annual subscriptions.
An ideal provider would offer multiple options so users can choose easily. If pricing information is not readily available about the VoIP provider on its website, it is a red flag. This suggests that the provider is not transparent about its pricing and is not reliable.
Are there any volume or contract length discounts?
Almost all VoIP providers offer volume or contract length discounts. Some might have discounts for as few as 5 users, and others only do it when there are 25+ lines in a connection. It is best to find a middle ground so the discounts are not too good to be true, but also not extremely difficult to qualify for.
In addition to advertised discounts, businesses could also negotiate to get the best prices. Long-term contracts (usually 12+ months) are often eligible for a reduction in prices.
Does the provider offer hardware as well as software?
Another important factor to notice is whether the provider advertises that you must purchase their hardware along with a VoIP software subscription. An ideal provider should allow you to bring your own device, and their software must be compatible with a range of devices. This allows you to save up on buying or renting hardware and use your existing phones.
However, if you are getting a new connection and don’t have old hardware, then it’d be best to get hardware and software from the same provider. Often, providers give discounted prices on bundled purchases and warranties, and it also ensures purchase security.
Is the VoIP plan made for businesses?
As a business, you should work with a provider who is an expert in working with businesses like yours. Reliable VoIP providers put forward service level agreements (SLAs) for reliability guarantees. SLA holds a legal obligation to provide the same quality of service as advertised to consumers. This ensures maximum security for businesses.
Compare VoIP providers and pricing
Lastly, before deciding to partner up with a VoIP provider, you should compare it with the alternatives available in the UK market. The VoIP industry in the UK is versatile but also competitive. Compare their base pricing, as well as the extent of features covered in a similar price range. You should also consider factors like which provider offers better customer service with a broad scope, stronger warranties, and higher expertise, because affordability is not just about prices; it is also about long-term investment and utilising the resources most efficiently.
How To Choose A Reputable VoIP Provider: A Checklist
Choosing the best provider is as crucial as picking a plan. This checklist will help you weigh your options and make an informed decision:
- Pricing Transparency: Is the provider upfront with its pricing, or do you have to reach out to sales for a quotation? Transparent, published pricing is a great sign from a straightforward company.
- Service Level Agreement (SLA): A well-known business vendor will provide you with the SLA. This is a legally binding doc that guarantees a certain level of uptime (e.g., 99.9%) and defines what support you will get if things go wrong.
- Flexibility of Contracts: What kind of contract length options do they provide? A reasonable provider will offer both short- and long-term options to meet various business needs.
- Trial Period or Money-Back Guarantee: Do you get to test the service before signing on? A confident provider of its product will typically provide a 14- or 30-day trial or satisfaction guarantee.
- Customer Support Quality: What are the support times? Is it a 24/7 service or just a business hours service? Do they provide phone, email, and live chat support? Look for online reviews to find out what current customers say about their experience with support.
- Feature Set vs. Needs: Are the features you actually need in their standard packages (say, maybe a mobile app, call recording or CRM integration), or are they simply expensive add-ons?
- Bring Your Own Device (BYOD): The next question you need to consider is the BYOD policy of your cloud provider. Do they allow you to use your devices (laptops, smartphones or even specific IP phone models), or do they require you to purchase locked hardware from them?
How To Save Money On VoIP Phone System: Tips
You can find several ways to keep your costs down on a VoIP system, besides just selecting the least expensive plan. Here is how:
- Use Softphones Instead of Desk Phones: The number one biggest saving in your remote team communication costs is avoiding purchasing hardware altogether. You can install the provider’s free softphone app on the computers or smartphones of remote, mobile staff, or those who don’t need a hardware desk phone, at no cost.
- Select the Right Plan for Every User: You can’t put every employee on an expensive plan. Only assign your premium plan (call recording or advanced analytics) to sales personnel and managers who actually require it. Add the rest of your team to a basic, lower-cost plan.
- Pay Yearly, Not Monthly: Assuming cash flow permits it, paying for a year at once will almost always get you a discount, usually between 10 and 20 per cent. That’s an instant discount right off your total bill.
- Negotiate, Especially for Larger Teams: Don’t settle on the first quote. If you are enrolling five, ten, or more users, find out from the sales rep if they can throw in a discount/freebie/headset/waive setup fee.
- Regularly Audit Your Users: Your business evolves, and with that, so do your telephony requirements. Set an interval of every 6 to 12 months where you review who actually needs a paid licence. Revoke licences for employees who have left or no longer require access to company phones.
- Bundle With Existing Service: If you already have business broadband through a provider, see if they provide some VoIP service. You can also almost always get a combo of the two at a better overall price than getting them entirely separate.
Get affordable VoIP calling with ComparedBusiness UK
Comparing VoIP providers is a lengthy process. From researching top names in the market to reviewing their pricing packages, features, customer support, and reliability, it might take too long on your own. That is why we are here to make this process fast and efficient for you.
At ComparedBusiness UK, we streamline the process of linking businesses with VoIP service providers. Simply provide your business details in under 2 minutes, and we’ll promptly supply you with quotes from reputable VoIP providers across the UK. You can then choose the most compatible option with your budget requirements and VoIP needs.
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.
