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A Detailed Cost Comparison of VoIP vs Traditional Business Phone Systems

Voip phone

A Detailed Cost Comparison of VoIP vs Traditional Business Phone Systems

Choosing the right type of phone systems is a priority for all modern businesses, regardless of size or industry. One of the big dilemmas, however, is whether to upgrade to a Voice-over-Internet-Protocol (VoIP) network or persist with traditional business phone systems.

There are several benefits of VoIP phone systems to keep in mind, but one of the biggest priorities for most businesses is likely cost savings. We’ve put together a detailed cost comparison of VoIP vs traditional phone systems so you can decide which option is best for your business budget:

The Costs of Traditional Phone Systems for Business

Traditional PBX phone systems provide a connection through traditional telephone networks. If there is a problem with the link between external power lines and your building, this is an issue that requires a professional engineer. Even assuming that your business will not face the costs associated with repairs, there are a variety of other initial setup expenses to consider.

Hardware and Equipment

Various hardware and equipment will be required for the setup and use of traditional landlines, such as handsets, headsets, and various accessories. Moreover, the desk handsets may need to purchase additional features such as video screens and the ability to switch between lines.


Installation includes wiring each individual desk phone to the network. This encounters labor costs as well as materials. The installation may require a central unit depending on the size of the business operation too.


The initial costs of introducing a PBC phone system are quite large, on average costing about $50 per line and sometimes even surpassing $100 per user, depending on the service. Opting for the more advanced hardware can seriously bump up those costs too. Furthermore, the maintenance costs related to the telephone systems and wires can cost a considerable amount of money.

Perhaps most noticeable, though, is the cost of airtime. Traditional phone calls are very expensive, even when bundled into a package where a number of minutes are inclusive of your monthly bills. International calls are another very costly feature that can send your overall telecoms overheads through the roof.

The Costs of VoIP Phone Systems for Business

VoIP works by facilitating phone calls through the internet, meaning it is a software-based solution for modern telephony endeavors. While it does encounter many of the same costs as traditional telephony, it does generate significant savings through bypassing some of the costs.

Noticeable changes include:

Hardware and Equipment

Handsets are often cheaper as advanced features like video calls can be facilitated by computers. Calls can also be handled via software or cell phones, potentially removing the need for handsets completely. 


VoIP phones eliminate the need for installations of power lines as you use your existing internet connections for calls. Remote lines also mean you can cut down on the office space required to host the phone system, which can also decrease costs when moving locations.


In addition to the initial setup, you can also save money on month-to-month service for a VoIP phone system. These systems use an internet connection to field calls rather than power lines, which means you are charged by your Internet provider based on bandwidth used rather than minutes or international calls.

 In fact, the average cost for VoIP phone systems at a business is $20 per user, which means that by switching from a landline to VoIP, you can cut your phone bill by more than half. Software updates are often included in the costs of your package, ensuring that maintenance costs remain low as well.

The Verdict

VoIP systems are the most cost-effective solution for businesses. From the initial setup fee to hardware, software, and service costs, VoIP phone systems offer cost savings that can’t be found on a traditional landline. What’s more, businesses who field several international calls could face thousands of dollars in savings in service fees.

VoIP telephone systems are the most cost-effective option for businesses across all industries, but it’s important to setup and service your new phone system correctly. Our team of VoIP service technicians at IT Harbor can determine the best facilities before getting you set up to enjoy the full benefits of VoIP in the most efficient and cost-effective way possible.

Brett Allred
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