How Much Does a Telephone System Cost?

We sell telephone systems and a very common question I get asked is “how much does a telephone system cost?”. I truly believe that most people that ask this question want a simple answer. The simple answer varies on manufacturer brand and features that may or may not come with the “base system”. I will get to how much a phone system typically cost, but first I need to explain the variables of which determine. You see, there is not just one factor.

Here is a list of things that need consideration:

1. Phone Manufacture – the heavy hitters such as Avaya and Mitel (Probably Bankrupt by now) are higher priced but offer relatively the same features as manufacturers such as NEC or Vertical.

2. VoIP PBX vs. Traditional PBX. VoIP systems are more software based which can lower the cost of the system in general. Think of it as a Computer that has software loaded on that handles all the features and functionality of a phone system. Now, again manufacturer or developer will play a roll on price just on the name alone. VoIP systems are easier to manage from an internal aspect and external aspect as well. Essentially lowering the total cost of ownership.

3. Wiring – Traditional PBX typically uses 1 pair of wires to operate a phone extension. So, upgrading from an old traditional PBX to a newer PBX there may be no need for additional wiring. With a VoIP PBX, the phones are like mini computers in theory. Meaning, they are a device on the network, therefore they require data or Cat5e or cat6 cabling or better. However, most if not all VoIP phones have a network pass through jack which allows one data cable to plug into the back of the phone, then a patch cable from the VoIP phone to the user’s computer needing only one data wiring for per user location.

4. Installation and Training – Traditional PBX’s in my experience take longer to program and install. Due to it being more hardware based, the phones themselves don’t hold programming, the central unit does. What this means is that there are assigned ports that need to be directly programmed and connected per phone. With VoIP Systems, the phones are programmed to match an identifier with in the VoIP system and virtually makes for plug and play.

Training in the past made for a large learning curve for system administrators. A large manual and programming from one of the phones made it very hectic for admins to perform basic programming changes such as changing the date and time. Now there are web interfaces for both Tradition type PBXs and VoIP Systems. What we have done is create training video’s and “how to” video’s on all the most popular programming and functions so users and admins can always refer back on how to perform a change or function.

5. Carrier Services – Depending on the type of service whether it be Analog $50 per line or more, PRI $450 (which allows for 23 channels of voice call paths) or SIP trunks which are call paths delivered over a broadband internet circuit ranging from $15 per line to $25 per call path with unlimited local and long distance calling.

To keep things simple, budget $500-$700 per user or phone location. This will include a basic phone with display, the main controller with voice mail a robust feature set such as hunt groups, call forwarding and a minimum amount of unified communications such as voice mail to email.

A more relatively newer solution is Cloud Hosted PBX. This solution dramatically cuts upfront cost and more often than not long term cost as well

This guide was designed to give you a background of different factors that need to be considered when looking to purchase a business phone system. I hope this will help for budgeting purposes and a little insight if you are looking at upgrading or will be in the market for a business phone system