How Much Does VoIP Cost in 2023
Inflation has been hitting all of our bottom lines lately, and many of us are searching for ways to cut costs. Not only that, we are looking to save money by making our existing needs more economical. One thing that’s taken a hit over the past couple decades is the standard land line.
Standard office lines can be expensive and lack the features business owners want. A solution is emerging, and that solution is VoIP. But what is VoIP, and what does VoIP cost? Dig into this crash course to get a better understanding of how this technology can deliver the features you want at a price you’ll love.
What is VoIP?
Voice over internet protocol, or VoIP, is a type of phone service that operates over the internet. Instead of running a network of standard phone lines, all the routing is handled on computers. This may be accomplished through a network of on-premise equipment or through a hosted web service. Each solution has its own pros and cons. Your specific needs will determine which is right for you. The choice you make will ultimately determine your voice over IP pricing.
What Does VoIP Cost?
One of the first questions most people ask is how much a VoIP phone system costs. That’s a bit of a complicated ask. There are initial setup charges and ongoing service and maintenance charges associated with the whole VoIP cost. Those two spending buckets will have different associated costs depending upon the level of service and features you need.
You’ll also need to decide whether you want to host the equipment yourself on site or outsource hosting. Each option offers a different level of control, but they also differ hugely when it comes to cost.
Hosted VoIP pricing is fairly straightforward. You can expect setup charges that run somewhere in the range of a couple hundred to a few thousand dollars, but the average is around $500. It all depends on how many users you have and what kind of equipment you need. Beyond that, you can expect to pay around $20–30 per user for your monthly service.
The cost of an on-premise setup looks a little different. First, you’ll need to buy considerably more equipment. The equipment will likely run into the thousands of dollars range, so be prepared for that.
On the plus side, you likely won’t have a monthly charge. That doesn’t mean you won’t have any monthly fees, however. You’ll need to pay someone to maintain your system, which can run far more than the $20–30 per user you’d expect with a hosted account.
As you can see, the VoIP cost will vary depending upon your number of users, required equipment, and desired options. Let’s start by looking at each of these VoIP cost buckets individually and examine how they affect your overall costs.
Setup Charges
Since you’ll be switching your phone system over from telephone lines to internet cables, you’ll need a new setup. The costs here will vary, depending upon how many users and lines your business requires. Here are some factors to consider when conducting your VoIP cost analysis.
Hosted VoIP
There won’t be a ton of upfront costs associated with setting up a hosted VoIP plan, but there are some. You’ll likely have to purchase some equipment to get you set up, so let’s start there. Your main considerations will be the phones, any headsets, and whether or not you require video calling capabilities.
Phones
The most important thing you’ll need for your new phone service is a compatible phone. Standard phones won’t work with VoIP right out of the box. Standard phones are set up to work with phone cables, not the internet. There are three great options to get you over this hurdle. New phones, adapters, or softphones.
New Phones
Your first option is to simply purchase new phones for your office. VoIP phone models are equipped to handle internet calling and may have features that allow you to make full use of the service. If you’ve got a lot of employees to purchase phones for, this can get expensive.
Depending on the model, the average cost of VoIP phones can run anywhere from $40 to $400 per unit. You’ll need one for every employee who needs one, so this can add up. If you can get by with fewer features, you’ll be able to get by on the lower end of this range. If you want feature-rich phones, expect your costs to run on the higher end.
All new phones are not required, however. If you’ve already invested in phones for the office, you may be hesitant to completely overhaul the system. If you’ve already got plenty of standard office phones, you can make them VoIP-ready with adapters.
Adapters
VoIP adapters allow you to convert ethernet signals to work with standard telephones. They act as a sort of translator between your local network and the handset. They are fairly simple to set up, but you may need a number of them to meet your volume needs.
If you’re connecting a number of phones in a smaller office, you can choose adapters that connect multiple devices to save costs. Adapters will run somewhere between $30 and $200, so find something in your price range that will connect the phones you need. If all this equipment sounds like an investment you’d rather not make, softphones are another option.
Softphones
You can make use of the devices you’ve already got with softphone technology. You’ve likely used this technology before and not even realized it. Services such as Zoom and Skype operate on this principle. Put simply, a softphone is a software-based phone system you can access with a computer or other device.
Softphone software allows you to take and make phone calls from your business phone right on your devices. This allows you to be connected to the office phone no matter where you’re at. It also allows you to possibly reduce your VoIP phone costs. That’s a great benefit for some, but it comes at the cost of using your device as your office phone. Depending upon the features you want, this may or may not be a feasible option.
Headsets
If your employees prefer to work with headsets, this is another expense you’ll have to consider. Headsets aren’t incredibly expensive, but if you’ve got a lot of employees, they can add up. The price range here will be anywhere from about $20 to $200 per headset.
Since headsets make life a whole lot easier for those who spend a good chunk of their days on calls, they can be a worthwhile investment. Just make sure to look for the features you want for those employees. You can likely get by with cheaper options for employees who aren’t tied to the phone for large parts of their days.
Video Calling
If you do a lot of video calling in your business, you’ll need to make sure the phones you choose can handle it. Unlike traditional phones, many VoIP models are fitted with cameras and monitors that allow you to make video calls. Softphones will also allow you to use your device’s screen and camera for video calling. If this is an important feature for you, adapters may not cut it.
Since a quality VoIP phone will have this feature, it isn’t a separate cost. Instead, plan on getting a VoIP phone from the higher pricing tier. Again, this may not be something everyone in the office needs. For those who do, however, it’s a fantastic investment in your business.
On-Premise VoIP
If you choose to house all the equipment locally, the costs will go up significantly in this setup stage. You’ll need to purchase all the equipment required, and you’ll have to find someone to maintain the system. You’ll have full autonomy over your phones, but you’ll also create an additional maintenance job.
The average cost of setting up an on-premise VoIP system will likely run between $6,000 and $7,000 just for the equipment to get you set up. And that doesn’t include the VoIP phone price. Additionally, most businesses need to hire a VoIP phone installer to install and set up the system. That will run another $1,000 or so. You’ll also need to buy software licenses for each user, which can run $200 or more per user.
The VoIP cost of an on-premise system greatly exceeds that of the hosted VoIP price. However, if you want complete control over your phones, this may be a good option. Just be prepared to pay for that control.
Recurring Monthly Charges
The VoIP cost per month will also vary depending upon which type of service you choose. These costs come in different forms, so it’s important to understand how each option works. Let’s look at what you can expect for VoIP costs between hosted and on-premise options.
Hosted VoIP
As we mentioned before, most hosted plans cost somewhere between 20 and 30 dollars per month, per user. You can save money by opting for fewer lines, and you can make sure you never miss a sale with a few more lines. A large part of the VoIP value comes down to the features you need. Let’s look at a few of the features available with VoIP subscriptions.
Free Local and Toll-Free Numbers
Typically, when you sign on to a new phone service, you’ll have to pay for your new number. With some plans, this is included in your VoIP price. It’s a small price savings that adds up over time.
Voicemail Transcription
If you’re out of the office and miss a call, returning that call promptly can make or break a sale. Many VoIP providers offer a service to transcribe those voicemails and will even send them to your email. This is especially useful for time-sensitive calls.
Call Recording
If you deal with a lot of details on your calls, this feature may come in handy. Call recording allows you to not only take perfect call notes, but also monitor calls for quality control.
Auto Attendant
If you’d like someone to answer your calls and route them to the appropriate employees, you may not need to hire a new associate. Many VoIP services offer auto attendant features that can do this for you at minimal cost.
There are a lot of features out there, and the only way to learn about all of them is to look into providers. Each may offer different features, so look into a few of them. Find the features you want at a price you love, and you’ll have a great experience.
On-Premise VoIP
The recurring monthly charges for on-premise VoIP largely come down to operating and maintenance costs. Since you’re running all that equipment on site, you’ll be in charge of paying for electricity. While it’s not a huge cost, it can add up. The maintenance is a big piece of the pie.
Hiring an IT professional to maintain your system isn’t terribly cheap. You’ll have to either hire someone full time, or hire someone on retainer. The last thing you want to do if your phones go down is search for someone to fix it. This is no place to skimp, either. Choosing a quality IT professional will make or break your on-premise VoIP experience.
No matter what your choice, going this route will likely cost you thousands of dollars per month to keep your service running smoothly. The agreement you make with your maintenance person will determine how many thousands that is.
Lightning Fast Internet
One more aspect of VoIP cost we need to cover is your internet connection. Since your new phone system will be connected to the internet, a faster connection means clearer calls. Most high-speed providers offer plans that will accommodate all your users. Make sure you choose the right option to ensure you have enough bandwidth to cover internet usage and calling. Most providers will be happy to work with you to ensure you choose the right service for your needs. Choose a great provider, and you’ll be set.