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How Much Does VoIP Cost? A VoIP Pricing Guide

This article was updated on June 8, 2024

Forward-thinking businesses are increasingly looking to Voice over Internet Protocol (VoIP)-based systems to future-proof their communications. The advantages of VoIP are well documented, but what can seem less clear is how VoIP pricing works. If you’re considering making the switch from traditional or legacy telephony but don’t know how VoIP costs work, you’re in the right place. This guide will tell you everything you need to know about VoIP phone prices, how VoIP pricing works, and more.

Illustration of an upraised hand holding several pieces of paper money. In the background are several clouds, representing cloud-based phone systems.

How Does VoIP Pricing Work?

Like with any other product or service on the market, VoIP pricing for your business will vary from provider to provider. Even a single provider will charge their customers different amounts based on:

  • Number of employees using the system

  • Features selected

  • Equipment needed

Other additional fees you may have to pay include:

  • Initial setup

  • Per call (with higher prices for international calls)

Despite these variations in pricing, businesses that switch from a traditional multi-line phone system to VoIP often find them to be more cost-efficient.

Let’s take a closer look at the main considerations when it comes to VoIP costs, starting with VoIP phone system installation.

How Much Does It Cost To Install VoIP?

One of the most notable advantages of VoIP-based systems over traditional telephony is that they’re typically much easier and less expensive to install.

Usually, there’s very little hardware that a business will need to invest in. For all the VoIP value adds you get when switching, you often won’t have to change the devices you’re already using.

The software for a VoIP solution will normally be hosted by your VoIP provider. So upfront installation costs are minimal. Hosted VoIP pricing, therefore, can boil down to just a simple subscription fee (more on that later).

Optional Setup Costs

Due to individual business circumstances or needs, the cost of VoIP installation can get bumped up in a variety of ways. For instance, if the business doesn’t already have them, they may need to invest in:

  • VoIP phones

  • High-speed internet

  • Devices that can connect to the internet

  • A VoIP adapter if you want to use traditional phones

  • VoIP headsets (if you want them)

If a business does want special VoIP phones, the price will typically be around $3,000 for 20 phones. Note, though, that purchasing these phones is not necessary if you already have devices that can connect to the internet. All you need to use these “softphones” is your provider’s app. Also, you may elect not to purchase VoIP phones if you have several employees who work remotely.

While business VoIP pricing is usually based on a provider hosting software for you, you could choose to host everything yourself, on-premises. Going down that route means you’ll have a range of further installation expenses:

  • A server, which allows you to make and receive calls to phones not using the internet

  • A battery backup to keep your phone system running should you lose power

  • Switches to connect routers to the devices you’re making calls from

  • Routers to make and receive calls via the internet.

This equipment typically costs around $6,495 during installation and setup. What’s more, you can also expect to pay around $1,000 on average for the installation and setup of the equipment by a technician.

When it comes to on-premises installations, there are other VoIP phone cost considerations that business can’t overlook. For instance, you’ll need to pay for software licenses, which may cost as much as $4,000 upfront for 20 people. You’ll also be liable for any ongoing maintenance costs.

Overall, therefore, on-premises VoIP system installation could cost well over $10,000 before you even make a call. It’s little wonder, then, that businesses often favor hosted solutions.

How Much Does VoIP Cost Per Month?

If you have a hosted VoIP system, you’ll pay a monthly subscription fee per user on your plan. VoIP prices per month typically range around $20-30. If you add any features to your plan, you’ll notice that you have to pay for them on a “per user” basis as well. Some providers may drop the subscription or feature costs the more users you have on your plan.

On-premises systems that use VoIP don’t require a subscription fee. However, you will have to purchase enough software licenses for each of your users. As mentioned above, these typically cost about $4,000 for 20 users, which breaks down to $200 per user.

How Much Do VoIP Phone Calls Cost?

Whether you have to pay any VoIP call charges will depend on your phone plan. Some providers offer a pay-by-call option for their most basic phone plan. This works better for businesses that receive few calls or have few employees.

How Much Do VoIP International Calls Cost?

Hosted VoIP systems typically include unlimited domestic calling with a subscription to their services. You may have to pay fees for any international calls you make, however. Voice over IP rates for international calls will vary by provider.

If a customer calls you internationally, then they will be charged for that call. If you expect to receive a lot of international calls, you may want to consider setting up an international phone number. Doing so will allow customers to call you without having to pay a fee. And, adding a toll free phone number will allow customers from the United States and Canada to call you without charge.

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Are There Any Free VoIP Services?

Free VoIP services for personal use do exist, but there aren’t many free VoIP business service phone service options. 

You may have heard of small and medium-sized businesses relying on Facebook Messenger or WhatsApp for communication between employees or between employees and customers, but these options don’t offer everything you need for effective, efficient communication with your customers.

Some features that make for smoother, quicker customer service that free versions don’t offer include:

  • Call Hold: Not only can you place customers on hold as you look for answers to their questions with this feature, but you can also set it up so that they hear music while they wait or can hang up and receive a call back from you.

  • Follow Me: This feature is great for employees who work in a hybrid environment. It allows them to answer work calls on their cell phones if they are away from their desk. With this feature, you can forward calls to your cell phone if you don’t answer your desk phone after a set amount of time. If you don’t answer your cell phone, either, the call will go to voicemail.

  • Simultaneous Ring: Have an incoming call ring as many as five different phone numbers simultaneously to ensure you miss fewer customer calls. Any calls that do go unanswered will be sent to voicemail.

With Unified Communications as a Service (UCaaS), you have access to even more features to improve your customer service. Solutions like Vonage Business Communications (VBC) combine voice, video, chat, messaging, and more into one service so that you can do all your communicating among employees and customers in one place. 

Additional features you can pay extra for through Vonage’s UCaaS solution include:

  • Business SMS and MMS: Send texts to and receive them from customers and colleagues as a quicker, easier communication option in some cases.

  • On Demand Call Recording: Not only can you start and stop recording at any point in a conversation with this feature, but you can also send recordings to yourself or colleagues as needed. These recordings are password protected.

  • Virtual Receptionist: Once you set up a preconfigured menu, customers will hear it when they call your business and can answer prompts to route calls appropriately based on working hours and holiday schedules.

While your first instinct may be to choose the cheapest VoIP phone system option over a more expensive one, remember that a smoother customer experience is likely to pay off in the long run. 

When you have happier customers and employees and smoother workflows, it has a positive effect on your bottom line, even if the features that make it happen require an initial investment. Plus, even VoIP services you have to pay for typically cost less than traditional multi-line phone systems.

So, now that you know the answers to the question “how much does VoIP cost?,” you’ve probably got another query in mind.

Why Should My Business Switch to VoIP?

Aside from the money you could save by switching from an analog phone system to VoIP, other reasons you should switch to using a VoIP phone system include:

  • Keeping customers happy. With a VoIP system, you can allow customers to get through to an employee quicker and more efficiently than with an analog phone system, particularly for businesses with hybrid or remote employees.

  • Working from anywhere. Because you only need an app to connect to your VoIP system, you can make and receive calls no matter where you’re working from. Additionally, if you can’t take a call, the call transfer feature allows you to easily transfer it to another employee.

  • Easily scaling up operations as your business grows. If you were to add phone lines to your traditional multi-line phone system as you hired more employees, you would need to purchase more hardware and possibly even get more phone jacks installed and set up. With a hosted VoIP system, you only need to contact your provider to get more lines added. And, if you decide that you need more features to make operations flow even smoother as you grow, you can easily add those features onto your plan.

  • Needing less equipment. Say goodbye to the days of tripping over cables or figuring out where to store everything you need for your phone system to work. All you need for your VoIP is an internet connection and devices that can connect to the internet.

  • Communicating with more clarity. As long as you have a broadband, high-speed internet connection, VoIP calls provide high quality, so both your employees and your customers can hear each other without having to constantly repeat themselves.

  • Relying on a solution that works. You can worry about fewer outages with a VoIP system. For example, Vonage provides 99.999% uptime reliability, based on averages from July 2021 through February 2022.

The way businesses operate is changing. To meet  the needs of both your customers and your employees, your phone system should, too.

Try the Vonage Pricing Calculator

There we have it, VoIP business phone service pricing in a nutshell. Thanks to this whistle-stop tour of VoIP costs, you should have a much better idea of how it all works in theory.

What about in practice, though? What would a VoIP phone system cost your business? How much could you be paying per month for a setup that meets the needs of your employees? There’s an easy way to get a general idea.

Check out the Vonage pricing calculator to explore VoIP pricing for our different plans and for different numbers of users — whatever your business needs.

Still Have Questions About VoIP and VoIP Pricing?

Voice over Internet Protocol is the technology that allows employees to make and receive phone calls over the internet instead of through a traditional analog phone line.

Audio signals — your voice — are transformed into digital data packets, transmitted via the internet, and then switched back to audio when they reach the recipient. That means employees don’t need a desk phone to answer customers’ questions. Rather, they only need a device that can connect to the internet, such as a work laptop, smartphone, or tablet.

Not only does the switch to VoIP mean fewer cables that cause tripping or fire hazards in your office, but business VoIP pricing also tends to be more affordable than traditional multi-line analog phone systems.

There are a number of ways in which VoIP systems tend to be more cost-efficient than traditional phone services.

For instance, as most VoIP-based solutions are hosted by providers, there are significantly fewer hardware-based costs. There doesn’t have to be pricey installation of new phone lines, servers, or other infrastructure on-premises.

VoIP pricing is also typically more predictable and consistent than traditional billing. In most cases, after all, you pay a set monthly subscription fee, rather than paying based on use.

Most VoIP service providers offer a range of different pricing plans. Each plan will come with different feature sets and limitations, with the more expensive alternatives providing the most functionality.

In general, these pricing plans are charged per user, per month. The more users, the lower the monthly cost per user usually is. Some providers, too, have add-on features that businesses can introduce to their VoIP solution for an additional charge to meet their individual business communication needs.

With VoIP providers like Vonage there’s usually no charge for calls made within the USA or Canada. There is, however, a charge per minute for international calls — as there is with any traditional phone system.

The difference with VoIP is that those charges are often lower, thanks to the greater ease with which international calls can be made via the internet. Vonage’s international rate finder makes it simple to work out how much any international call may cost.

As mentioned, VoIP pricing by providers is typically arranged into different plans, with varied ranges of features at each level. Choosing the right plan is the first way in which a business can customize their system to their needs.

Providers like Vonage then also offer a selection of add-on features and functionalities that any business could choose to add to their plan. That allows you to build a customized solution that further boosts VoIP value for money.

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Want to know more about the ins and outs of VoIP pricing? We’re here to help! Call us at 1-844-365-9460, or fill out this form! A dedicated specialist will tell you about:

  • How switching to VoIP can improve customer satisfaction, free your employees to work from anywhere, and more
  • The cost savings VoIP offers, from installation and set-up to daily use to international calls, and beyond
  • The many advantages of VoIP systems over traditional on-premises options

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