Phone systems: A buyers’ guide

Which telecommunications system is right for your business?

Fee calls, web-conferencing, sending secure instant messages and remote working are just some of the services that phone systems can offer today.

The development of broadband means that voice packets can be transmitted in the same way as data packets without any loss of quality. And IP (internet protocol) technology, which enables calls to be made over the internet, has matured considerably since being touted as the next big thing as far back as 10 years ago.

Increasingly, the IT and telecoms sectors are converging, meaning voice, video and data services can all be accessed from your handset. There’s also been greater integration between fixed and mobile communications.

Starting the buying process

No doubt you’re aware of much, if not all, of this. And the upshot is, it’s all good news for your business. “Companies have come to realise that a telephone system can be used for far more than simply making calls,” says Alison Brewer, solution marketing manager at Mitel.

If your business relies heavily on external communications, such as operating a help desk or contact centre, then installing an IP communications system can transform the way you deal with customers and improve service levels. To find the system that best suits your business, you need to identify the features you can’t do without, including how many incoming and outgoing lines you require and whether you’ll be supporting home or mobile working.

Scalability is another important factor. The best option will be a phone system that can be rolled out to new users or offices without requiring an expensive gateway to be installed as your business grows. “Unless your needs are very simple, consider seeking advice from a competent telephony solutions reseller who can advise on the best system for your business, and can help with replacing an existing system, to ensure you get a competitive proposal tailored to your needs,” says Mike Valiant, market development manager at networking provider 3com.

And the phone systems’ revolution doesn’t stop here. In the future, experts are predicting that more and more companies will be managing and integrating voice, video and data services over one network. “This could mean a remote worker can use a mobile device to video conference themselves into a business meeting, or your receptionist could access everything from incoming caller information to live CCTV video feeds, all on a handset,” says Peter Tebbutt, UK marketing director at communications provider Alcatel.

What’s on  offer

Depending on the size and needs of your businesses, options to consider include TDM, hybrid-IP, pure-IP or hosted IP phone systems.

TDM (Time Division Multiplexing): Phones are based on circuit-switched technology, with calls carried over Public Switched Telephone Networks (PSTN). These systems are most suited to companies with a single site and with mostly offi ce-based staff.

Hybrid-IP: Systems combine both TDM and IP technology in one, and typically consist of a separate TDM-based voice network at the head offi ce and use of IP end-points to connect remote workers or additional sites.

Pure-IP: These software-based systems combine both voice and data on the same network. If your business is spread across several national and international sites, taking advantage of pure-IP could considerably reduce your telephony fees.

Hosted IP/IP Centrex: This system incurs very few set-up costs (although running costs can be higher than other options) and is usually integrated with your existing private branch exchange (PBX) system. With IP Centrex, all switching occurs at a local telephone offi ce, so there’s no need to install PBX hardware or software on your premises.

“With a hosted system, costs are predictable and full support and upgrades are included and it can be leased on a pay-as-you-go basis. It might also work in your interest as service providers may be able to access kit that would be outside your price range,” says Rob Jupp, midsize sector development manager at Colt UK.

As the number of phone system applications has increased in recent years, it’s no surprise that there’s a wealth of suppliers to choose from. Major players in the market include the likes of Alcatel, Avaya, Cisco, Colt, Inter-Tel, Mitel, Nortel, Siemens and Toshiba. Orange, owned by France Telecom, is also making a bullish move into the fi xed line market, differentiating itself from its mobile competitors and banking on the increased desire for a converged one-stop-shop offering. Vodafone may also follow in future.

“Comparing systems isn’t easy as each has its strong and weak points,” says Scott Nursten, managing director of s2s, an IT consultancy that specialises in VoIP, network security, maintenance and mobility. “Choose your partners carefully, ones who match 2006business, technology and budgetary requirements. Don’t get too caught up in ‘bells and whistles’ – it’s amazing how few of them you’ll actually use.”

Just as Orange has recognised it, convergence is the name of the game, but it goes beyond the mobile providers’ offering as there are a number of suppliers that can provide a range of telecom and IT services together as shown through partnerships Cisco has initiated with IBM and Nortel with Microsoft.

There is no one-size-fits-all communications answer but sticking with one brand can often bring benefits when considering support, maintenance and administrative costs.

There are also options when it comes to paying for a phone system. Should you lease or buy? More companies have in the past chosen to buy over leasing, but the latter option is increasing in popularity as all the major vendors are offering good finance deals and even better trade-in deals.

The VoIP option

Long-distance and international calls for the price of local ones, free calls between business sites and the ability to listen to emails over the phone – these features are all possible with Voice over Internet Protocol (VoIP) technology.

It enables voice traffic to be sent over a wide area network (WAN) or a broadband internet connection, as an alternative to the PSTN. The voice data is compressed and sent over packet-based data networks (ie the internet), rather than using that of traditional telephones. This means it uses up to 90% less bandwidth than a traditional phone call.

VoIP is beginning to mature and the technology is now less about saving money on calls and more about transforming the way people work. Your business has the potential to benefit, but there are certain instances that make the investment more compelling.

“Any company moving to new premises should consider it, and those with multiple sites, as the business would benefit from free calls between different locations,” says Tim Webb, general manager at Toshiba BCD. “Companies which are adopting flexible working practices and businesses which need to keep costs down by not running a traditional office can have employees working from home or based anywhere in the world.”

This was a primary consideration when revenue generation consultancy Gelst abandoned all of its landlines in favour of a VoIP system offered by broadband telephony provider Vonage.

“Our consultants are not based in one office, or one country,” says Geert Van der Elst, partner in Gelst. “The Vonage service allowed us to add new consultants whenever and wherever we needed to, without any additional cost or requirement for extra hardware.”

VoIP also enables you to create a presence outside your local area. With virtual numbers (a number with a dialling code outside your local area, either in the UK or abroad), you can be ‘located’ almost anywhere in the world, enabling you to compete with larger, international businesses.

“The drivers for VoIP are cost reduction for long distance calls and the ability to have conferencing and data sharing services delivered to your desktop. There is also the ease at which the voice communications system can be managed by your IT team,” says Pat Finlayson, product marketing, voice division at Polycom.

So how can your business take advantage of VoIP? Providers include Alcatel, AT Communications, Avaya, Cisco, 3com and Swyx, but your choice of supplier largely depends on the features you require and the state of your existing telephony system. “Fast growing companies must ensure that the system has the capacity to grow,” adds Inter-Tel’s managing director Chris Harris. You can continue to make and receive calls with standard phones by using an adapter that enables existing handsets to be plugged into a broadband connection, creating a VoIP line. This is what providers such as Vonage supply. Or you can install software that turns your computer into what is known as a softphone. You can also investigate the upgrade path on your existing PBX, what the industry calls a hybrid PBX system, an option that is well suited to mid-sized businesses. You could also invest in an entirely new IP system, but scrapping your existing phones and implementing such a system from scratch is an expensive investment.

What will it cost?

So what should you expect to pay? The Vonage service has a monthly fee of £7.99 which allows you to make calls to the UK and Ireland for free. Using VoIP, calls to international and mobile numbers are significantly reduced – on average, and depending on the type of usage, by at least half, according to Vonage UK managing director Kerry Ritz. AT Communications offers a hosted VoIP product that costs from £19.99 per user per month, with no upfront equipment, maintenance or support costs.

For a software-based solution such as Swyx Compact (for up to 10 users), prices start from £1,295, rising to just over £12,000 for 100 users. This is broken down into software licence, installation, on-going maintenance and additional hardware that may be required, including desktop or IP phones or headsets.

A Cisco ISR (integrated services router) system, including router, IP-box, phones and messaging is around £300 per user for a 200-user system, but this does not include the cost of broadband or external telephone lines.

There are issues to be wary of. “With voice and data communications running over a single network, a power cut, for example, could wipe out all forms of business communication,” says Toshiba’s Webb. “Sufficient backup resources should be installed to avoid disruption. VoIP can also create some security issues which need to be addressed.”

Quality of service is also a potential hidden cost. To ensure that VoIP calls are of sufficient quality, you may need to invest in or upgrade your existing network infrastructure, to ensure calls aren’t delayed by packet loss, delay or jitter.

The buying process 

Suppliers include manufacturers, retailers, telecoms service providers and consultants. You should consider experience and credibility when choosing one. But should you use an intermediary or buy direct? Most vendors have a recommended retail price for products, so you won’t have to pay any more for the privilege of going through a middleman, but there are some advantages to be gained.

“Consultants charge by the day but can give an independent assessment of your needs. Resellers usually provide initial proposals for free but may be limited in the manufacturers they represent and the products they supply and support,” says 3com’s Valiant.

Intermediaries can also offer a more personal service and a single point of contact, so that you won’t have to deal with different departments, an important issue to consider if you need to resolve problems.

“Local presence is also an important factor to get a good level of service,” adds Ken Johnson, senior manager, converged solutions, at ntl: Telewest Business. And Inter-Tel’s Harris adds you need to think about more than the cost of the system. “Invariably there is some negotiation point when purchasing a new telephony platform – however, one must bear in mind when implementing VoIP and other complex applications that there is a considerable amount of training, implementation and support that is needed if the company is to maximise the benefi t of the investment in the new product.” Price is an area that can be discussed, however negotiating on management contracts that match the lease term can offer you guaranteed service and a basis on which to negotiate on further down the line.

Blue Group, a supplier of health, social care and construction professionals, based its choice of a new phone system from Cisco on total cost of ownership, rather than upfront costs. “We found that the cheapest solutions in year zero always became very expensive as time went on, usually because of licensing or handset costs,” says Karl Perkins, IT manager, Blue Group.

One of the best ways to compare services is to look at your bills and see how much is being spent on local, national, mobile and international calls. Weigh up whether the product is scaleable, whether you can use the same platform for the lifetime of the product, or whether you will be forced to swap one system for another, once you get past a certain number of users. Features are very similar when compared on paper so ask for a demonstration before you commit.


Good maintenance can save you hardware costs and decrease downtime while increasing business productivity. There are also security issues to consider. With the increase in remote working practices, your phone systems are more at risk from viruses, so ensure you have up-to-date anti-virus software in place.

With the number of suppliers in the marketplace, it’s easier than ever to fi nd a maintenance contract to suit, but with the many types of agreements available, ensure you choose the right level of cover.

Charges are hard to quantify as it really depends on the size and needs of your business. Typically, fees are based on the number of users, the features you are accessing and the speed of recovery you require. If you opt for a hosted system, maintenance is carried out as part of the service agreement. Shop around to fi nd the best quote but remember that working with a single point of contact can give you peace of mind and enable you to build long-term relationships.


Future trends point to IP-based phone systems replacing analogue ones. While IP is clearly the technology of the future, it may not suit every company. What is evident is your business will have to deal with an increasing level of communication options, with numbers for the offi ce, the home, fax and mobile, as well as email and instant messaging addresses. This means you and your employees will be looking for increasing control over how these communications are offered, and the latest innovations in the phone systems market are going some way towards doing that.

Case study: Time to switch

Company: Edcoms

In brief: Problems with its existing system forced educational consultancy Edcoms to shop around.

Edcoms designs materials for companies which want to communicate with and through education. It has a turnover of more than ?5m and around 40 staff, more than half of whom are mobile workers.

Its existing phone system, a Samsung TDM PBX, was diffi cult to support, unable to handle call demand and lacked PC integration. It then suffered an outage, losing nine months? worth of the company?s data.

Edcoms approached Charterhouse Voice and Data, which provides a range of systems from manufacturers such as Cisco, Mitel and Avaya, to help it source the right product.

?We were looking for integration with Microsoft Outlook and other desktop applications and rich voice functionality,? says Rob Delany, head of IT at Edcoms.

The company chose a Mitel 3300 CXi Controller, which is hosted and managed in-house. Every staff member has an IP phone and there are wireless handsets. ?Costs were around ?25,000, including the desktop software, and we saved on the cost of employing an additional receptionist. We have multiple numbers that go through to reception, and the new system has features such as phone queuing and recorded messaging. Maintenance is straightforward, with just basic training needed,? says Delany.

Edcoms was also attracted to the system because handsets can be taken home and plugged into a broadband connection, enabling home workers to connect to the office phone network.


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