VoIP phone system costs

VoIP phone system costs can vary, but when broken down into specific elements it’s easier to estimate the overall costs:

• VoIP provider package cost per user/per month – ranges from £5 – £40 depending on provider, plan, and contract type (monthly or annual)
• VoIP compatible phones – range from lower end, basic models (£35) to high end, executive models (£300)
• VoIP headsets – lower end, basic models cost around £20, whilst higher end headsets cost upwards of £200
• Broadband provider – VoIP software uses your existing broadband connection to work. Broadband costs can range from between £15 per month to £50 per month depending on operating speeds.

These are the main factors that will impact the overall cost of implementing a VoIP phone system into your business, but there are also several other smaller VoIP phone costs to consider.

With a recession impending, it has never been more important for small businesses to strengthen cash flow by getting the best deal on business software.

If you want to carry out further research, read on for our guideline of the rough costs you can expect when using a VoIP phone system for your small business.

Is VoIP cheaper than a traditional phone systems?

Yes, VoIP phone systems are cheaper than conventional telephone systems because they are software-based, and do not require a lot of additional, expensive hardware to work. You can buy VoIP phones if you prefer (more on this below), but it is also possible to make VoIP calls simply using the software and your computer or a mobile device. 

Another benefit for SMEs using VoIP over traditional phones is that it can massively improve customer experience in your business. Callers don’t want to be indefinitely stuck with their phone to their ear. One report shows that customers are willing to wait an additional 20 minutes compared to those on traditional hold.

To find out more about the software options that are available, you can also read our complete guide to the best VoIP systems for small businesses.

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How do VoIP phone system costs break down?

The amount you’ll spend on your VoIP system will be comprised of three charges:

1. You’ll pay a monthly line rental fee to your VoIP provider, which can cost anywhere between £10 per user, per month and £50 per user, per month.

Where on this spectrum your payment plan sits will depend on a number of factors – and not just how reasonably priced your VoIP provider is. These factors include:

• The package features you’ll need
• The number of employees you’ll have using the VoIP system
• The length of your subscription agreement

2. On top of your line rental, some VoIP providers will also charge you usage costs for the minutes you spend making calls using your VoIP system, much like a traditional phone bill.

Meanwhile, other providers will offer you a call package – giving you a certain number of (or unlimited) minutes to use each month – for an additional fixed fee.

3. You might also choose to pay additional setup costs to get your VoIP phone system up and running to the operational standard you desire such as:

• Buying VoIP phone hardware
• Upgrading to better broadband that can deliver quality VoIP calls

We’ll explore all of these charges in more detail, below.

What factors will affect my VoIP line rental cost?

The biggest factor that will affect your VoIP line rental costs is your provider, since the brand behind your phone system ultimately decides how much they want to charge per month.

Here are the most common things to look for when you’re trying to find the provider with the best VoIP deal:

1. Features

The more comprehensive and advanced your VoIP package, the more expensive your rental fee is going to be. VoIP providers tend to offer several tiers of subscription. Your cheaper, more basic packages (sitting at the £5 to £10 end of the spectrum) usually come with most of the expected features, such as:

• Unlimited VoIP calls, and limited landline calls
• Voicemail
• Call holding and forwarding
• Customer support within certain time frames – for example, 8am to 5pm, Monday to Friday

Meanwhile, the more expensive packages (veering towards the £15 to £20 bracket) come with all of the above plus more advanced features, such as:

• Voicemail-to-text or voicemail-to-email services
• CRM integration
• Unlimited international and landline calls
• Automatic callbacks
• Call data analytics
• 24/7 customer support

You’ll need to carefully consider which features you’re likely to need – and work out how much value these features will add to your operations – before settling on a plan.

2. Team size

It’s important to remember that the majority of VoIP providers charge their rental fees per VoIP system user, per month.

Obviously, if you’re a one-man-band, this isn’t something that’ll affect you. But if you have a team of three telemarketers under you, be aware that you’ll be charged a rental fee for each of them.

So, if your rental fee is, say, £15 per month and you’ve got four people using the VoIP system, your total rental cost is going to come to £60 per month – £15 for each user.

3. Contract length

VoIP providers tend to offer subscriptions in 12 and 24-month contracts, though many will be open to working out a bespoke subscription length with you if you need it.

It goes without saying that the longer your contract agreement, the cheaper your monthly payments will be.

That being said, it’s better to plump for a shorter contract if you’re still getting established. Running a start-up can be an unpredictable affair, and you don’t want to be locked into a contract that you might not need to fulfill.

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What additional cost considerations do I need to make?

While conventional telephone systems require – yep, you’ve guessed it – telephones to be stationed at each user’s desk, VoIP systems are largely software-based and don’t need a lot of additional hardware.

In fact, there are only three pieces of equipment you’ll want to consider buying:

Additional VoIP costs	Low price	High price
Headset with microphone	£20	£100
VoIP phones	£25	£400
ATAs (analogue telephone adaptor)	£50	£100

1. Headsets with microphones

You can use VoIP software to make and receive phone calls via your computer, tablet or mobile phone – also known as softphone devices. This gives you the freedom to simply use the equipment you already have to get going with VoIP – particularly handy if you’re setting up a VoIP system to work from home.

Still, if you’re going to make calls using your computer, using a headset is generally a better idea than relying on your PC’s built-in microphone and speakers. It means your calls remain private.

Headset prices vary significantly depending on comfort, quality, and design. Generally, you can get a basic headset for around £20, while more advanced varieties can go for over £100 each.

 2. VoIP phones

VoIP phones – also known as IP phones – look much the same as conventional phones, with a handset, cradle, keypad and caller ID display. These phones connect to the internet; either using a Ethernet connector, a built-in modem or wifi. As such, it is much easier to set up a VoIP system than a traditional telephone.

Low-cost VoIP phones will set you back around £30, while models with more functionality can cost up to £100 each. There are plenty of cost options out there, so it’s worth shopping around for the right model.

 3. ATAs (analogue telephone adaptors)

An ATA is a device that plugs into a conventional phone and transforms it into a VoIP phone that’s able to make and receive calls over the internet. This could be a great option if your office already has conventional phones that you’d rather not see go to waste.

Do you need to improve your broadband connection?

The clarity and reliability of your VoIP calls will rely heavily on how good your internet connection is.

If you’ve got ultra-fast, fibre optic broadband, your call quality is going to be pristine. If your broadband is more unreliable than a London commuter train, it might sound like you’re calling your clients from the bottom of the sea.

This can be a real concern, so if you’ve been suffering with slow internet, it’s worth looking into getting it upgraded before setting up a VoIP telephone system. This, of course, makes for an additional cost. Find out more about the best UK business broadband options today to make sure  you maintain crystal clear call quality.

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How do I get started with a VoIP system?

Most VoIP providers will let you sign up instantly to their software online (a perk of being software-based). However, we don’t recommend rushing into a business phone contract without first researching the top VoIP providers on the market.

It might feel time-consuming, but the more research you can carry out, the more easily you’ll be able to find the option that matches your business requirements – and, crucially, aligns with your budget.

Complete our simple online comparison form to receive bespoke quotes from the phone system providers who can supply what your business needs. We’ve designed the process to be entirely free and take just one minute so you can be up and running in minutes.