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How Much Does a VoIP Phone Service Cost?

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VoIP Phone Service Prices

You've heard about the money large corporations have saved by switching from traditional telephone service to VoIP services. But until recently, small businesses were left out. Things have changed. VoIP technology has dramatically improved over the last few years, making it a viable option for small business, too. If VoIP service is the right fit for your company, the cost savings can be substantial.

About VoIP Phone Service

Voice over Internet Protocol is a technology that transmits calls over computer networks rather than traditional phone lines. The call clarity and features are similar, but VoIP is far less expensive.

It's important to note, however, that there are two very different types of VoIP for business:

  • VoIP service is a subscription-based service that routes all of your outgoing calls through the Internet. There's no need to buy hardware, and customers are billed monthly. Currently, VoIP service is really only adequate for small businesses.
  • VoIP systems, used in medium and large businesses, consist of hardware and software that need to be installed on-site. They allow remote offices to operate on a single network, eliminating long-distance fees between offices or with employees who telecommute. They do not replace traditional phone lines for communicating with the outside world, although that technology is being developed.

Most of the pricing information below focuses on VoIP service, but we'll also touch on the much pricier VoIP systems.

VoIP Phone Service Average Costs

Domestic VoIP plans usually cost $30 to $50 per month. Calls within the U.S. and to Canada and Puerto Rico are included, but not international calls. On the low end of that price range, you'll probably have a set number of minutes per month. On the high end, you can probably find a plan with unlimited minutes.

Global plans, which offer calls to select international locations for no additional charge, usually cost $60 to $100 per month. As with domestic plans, some packages set a maximum number of minutes while other allow for unlimited calls.

In addition to the monthly fee, you may have to pay a one-time activation fee of anywhere from $30 to $50. Monthly taxes and fees also run extra. And keep in mind that calls to cell phones are not always included - be sure to ask before committing to a service.

VoIP Phone Systems Average Costs

VoIP phone systems are exponentially more expensive. Complete packages start at about $2,000 for a company with five extensions. That includes the cost of handset systems, software, installation, and training. For large companies with hundreds of extensions, the price could reach the hundreds of thousands.

  • A VoIP package for five to 15 extensions usually costs $2,000 to $15,000.
  • A VoIP package for 30 to 50 extensions generally costs $10,000 to $50,000.

Choosing a VoIP Phone Service

Here are some tips to consider when shopping for a VoIP phone service:

  • If you're buying an international plan, make sure to ask for a full list of countries that can be called for no extra charge. If you're constantly doing business in Japan, but calls to that country aren't included, the service isn't worth your money.
  • Analyze your current phone bill to get an estimate of how many minutes per month you use. If you're topping 2,000, a plan with 1,500 minutes won't cut it. Opt for the unlimited plan instead.
  • If you're looking to save money, consider paying for a year's worth of service upfront. Most VoIP service providers offer significant discounts to companies that do.

If you're purchasing a VoIP phone system, plan for room to grow. It's far less expensive to purchase a system with extra capacity than to upgrade the system down the road.

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