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PBX phone system cost

PBX cost can be an ongoing concern. Here’s how you can get the most value out of a PBX phone system for your small business

A private branch exchange (PBX) phone system is a scalable and affordable way for businesses to meet their communication needs.

It can be a more expensive option than other business telephone systems, but what you’re paying for is a more sophisticated, full-featured product.

A PBX comes with a wealth of features that can help you project a professional business image.

This article will focus on the cost of installing, using and maintaining two different types of PBX systems.

  • Hosted PBX – this is where a provider hosts the PBX at their location, offering you access via the cloud. There are generally no setup or installation costs
  • On-premise PBX – this is hosted at your premises, meaning higher set-up and equipment costs, but it can be cheaper in the long run and gives you greater control

It’s still possible for businesses to use a traditional PBX phone system, which uses analogue phone lines.

However, as these present almost no advantages in functionality or cost compared to the other two –  not to mention they’ll soon be obsolete – we will avoid discussing them here.

But how much is it going to set you back to install a PBX phone system exactly? And what other costs are involved?

This article will cover:


PBX phone system cost

PBX phones vary in price, from around £30 for the more affordable models right into the hundreds of pounds for more full-featured models.

Cost also depends on the complexity of the system you need. For example, a call centre with dozens of agents will need a system capable of handling a huge volume of calls.

To give you an idea what you’re getting for different prices, we’ve covered a range of different available phones.

Type of PBX phone Price Features included
Basic PBX phone £25-£50 • Headset support
• Speaker
• Monochrome display
• Contacts
• Messages

Standard PBX phone £50-£100 • 100+ number phonebook
• Hands-free
• Caller ID
• One-touch memory
• 10 number redial
Advanced PBX phone £100+ • Colour display
• 200+ number phonebook
• HD audio
• Video communication
• Bluetooth support

NB: Not all phones at these prices will have these exact features, but this gives an indication of the features you can expect to be included at each price tier

Often, you will be able to pay at a cheaper price per phone the more units you buy.

You can find a more detailed comparison of phones and providers here.


PBX provider costs

There are two types of PBX systems: Hosted and on-premise-PBX. Both have different associated costs. Your decision may depend on whether you can handle the relatively higher immediate costs associated with the latter, or would rather manage the ongoing costs of hosted PBX.

Often, the only way to find out the cost of PBX providers is to call up and get a quote. They don’t always publish them.

Hosted PBX costs

Hosted PBX is very flexible and scalable, allowing you to add and remove multiple locations and users at will.

The cost of hosted or cloud PBX is typically calculated based on:

  • A monthly fee
  • Usage-based extras (e.g. if you have gone outside of your minutes)
  • Number of users
  • Number of features

To give you an idea of how these pricing plans scale, let’s look at a typical hosted PBX plan (paid monthly/ per user) for 5-19 users, and 20-99 users.


5-19 users/20-99 users Entry – £8/£7 Standard – £15/£13 Premium – £20/£18
Minutes per user 100 750 2,000
Features Basic: voicemail-to-email, app integrations, call logs Call recording, fax, analytics Integrations with other business platforms, call monitoring


If you have between 20 and 99 users, the cost per user is reduced, but the features and minutes are the same.

They may also give you the option of paying monthly or annually. RingCentral, for example, offers a 38% discount to users who pay annually.

With hosted PBX, there are:

  • No installation costs
  • No onsite equipment costs
  • No maintenance costs

You may also wish to add these on to your package:

  • Free-phone numbers (0800) – £5-£75
  • Local rate numbers – £0-£40 + 7p per minute for the customer

Why would you opt to pay for these?

A free-phone number can encourage customers to get in touch, as they won’t be charged for calling you. With a local rate number, the caller will only be charged the local rate regardless of where they are in the country.

Read a detailed guide on business phone numbers here.


On premise PBX costs

On-premise PBX costs include the price of buying, leasing or renting the system, plus the cost of hardware, installation, and maintenance.

First let’s look at the hardware. For an on-premises PBX system, you’ll need:

  • Phones (see above)
  • A switchboard/ server – this includes an internal switching network and a microcontroller for establishing connections between callers. The server manages the calls by switching them from one line to another, depending on what number is being dialled. Cost: from around £50
  • Gateways – these act as a bridge between the phones in your system and the Voice over Internet Protocol (VoIP). Cost: from £200 to £700+ depending on the size of your company
  • Ethernet switch – this acts as a central station, connecting wired devices in your office. Cost: from £12
  • An internet connection – to make internet-enabled VoIP calls. Cost: from £18 per month

As you can imagine, this pushes up the costs significantly compared to hosted or cloud PBX, and it’s difficult to give an exact figure for the total cost.

However, for a normal small business, you’re looking at spending upwards of £4,000 on installation alone.

The costs of installing an on-premises PBX will depend on:

  • The number of users
  • The current or anticipated usage
  • The number of sites needed to be connected
  • The location of the main system and its interconnections to other systems
  • Sufficient network traffic for daily and weekly call traffic peak period

And then there’s maintenance…

PBX maintenance costs

What are the costs of PBX maintenance? Again, it’s difficult to quantify an exact figure as there are so many variables.

A 2017 study from Home Advisor estimated that annual maintenance of a PBX system can cost nearly £5,000 a year! And that’s without taking into account the cost of replacement units and repairs.

You’ll need to pay for:

  • Additional lines
  • Additional users
  • Additional features
  • Faulty equipment repair


Low cost PBX

Nearly all businesses will require some form of telephone system, which will be an ongoing expense.

That’s why it makes sense to find the most economical method of meeting your communication needs.

However, that doesn’t mean going for the cheapest option at every turn – it means not overspending on unnecessary equipment and features.

Below, we look at some of the ways you can achieve a low cost PBX system.

Be feature-lean

Barely any small businesses need to use every single feature available with a full PBX deployment.

Let’s look at what essential features you should choose:

  • Call forwarding – this ensures an inbound call will go through to someone on the team, so you never miss an important opportunity
  • Call log – a call log will keep track of who has been called back, and who needs to be called back
  • An AI assistant – in the event that no one can answer, an AI assistant can provide a list of options to help the caller find the most relevant person or department
  • HD audio quality – “Huh?”, “Excuse me?”, “No you… er, sorry, no, go on.” Excellent audio quality is imperative for clear and productive communication – don’t skimp on it, or else you’ll get echos, interference and dropped calls
  • Integration with CRM and other features – this ensures the easy transmission of essential data and helps you jump on opportunities
  • Conference calling – it can cause no end of frustrations, but the ability to hold multi-party conversations is essential to most modern businesses

Other things you can do to ensure affordable communications are:

  • Make sure the phone system is reliable and easy to maintain
  • Do your research: assess the price and offerings of a number of providers to find the best deal for your business


Next steps

As you can see, there are many different factors that contribute to the overall price of your PBX phone system.

This page should give you a fairly good indication of how much you need to budget for PBX, as well as how to make sure you’re getting good value for money.

You can find more information on PBX in the following pages:

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