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The VoIP Cost Guide: How Much Is VoIP and Getting A Great Deal
If you’re looking to switch to VoIP, you’re probably interested in one important detail: how much does VoIP cost? The truth of the matter is that there are a number of factors that go into determining VoIP cost, such as number of users, extra features, and subscription costs.
In this VoIP cost guide, we’ll break down all these factors to explain basic costs of VoIP, hidden costs, and why VoIP is worth it.
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How Much Is VoIP?
VoIP, or Voice over Internet Protocol, is a technology that enables users to make and receive phone calls over the internet. VoIP has quickly risen in popularity as it provides businesses with an affordable solution for business communication needs. Switching to VoIP also typically provides cost savings when compared to traditional business phone systems.
But how much does VoIP cost? On average, you can expect to pay somewhere between $25 to $35 monthly per user. Nextiva’s prices, for example, start at $17.95/user/month for the most basic package and go up to $37.95/user/month. The provider, number of users, and tier of service you choose will impact the VoIP cost for your business. However, there are other costs to consider that can affect the overall cost of VoIP service.
The Basic Costs of VoIP
When looking at VoIP cost, we’re first going to take a look at the basic costs. The most obvious is your subscription cost. VoIP service typically works on a subscription-based model, charging per user or per line. The provider and features you choose will determine how much the monthly or annual subscription fee is.
Other factors determining VoIP cost include the price of your VoIP phones, add-on features, equipment rentals, toll-free numbers, and set-up costs.
VoIP Phone Price
One of the huge benefits of VoIP service is the flexibility it provides. VoIP lets you make and receive phone calls from both hard phones (desk phones, for example) or softphones (software applications on your phone or computer used to make phone calls).
This means you don’t technically need a desk phone in order to make business calls. Most VoIP providers offer mobile applications that let you make your phone calls on the go or from your home office. However, if you’re working in an office, you’ll likely benefit from having VoIP phones.
A VoIP phone or IP phone is a desk phone that connects to the internet to make phone calls. As with any kind of hardware, VoIP phone price varies, depending on the model you choose and the number of features. In general, VoIP phone price is a one time expense rather than a recurring expense. For lower-end models, you might pay around $50 to $85 per phone. On the other hand, the models with more features and buttons are typically priced at over $200. Additionally, headsets can cost upwards of $300 each.
If you already have analog desk phones, you can save a little bit of money by purchasing an ATA, or Analog Telephone Adapter. ATAs cost around $50 each and allow you to make digital calls using your analog phone.
Some VoIP providers offer equipment rental as part of their service. This can save you a large capital expenditure when switching to VoIP. On the other hand, if you’re renting VoIP phones for long enough, you may pay more than the actual price of the phones. You should take all of these factors into consideration when calculating VoIP cost.
VoIP Phone Number Cost
Another VoIP cost to consider is the price for a VoIP phone number. If you’re switching from a traditional landline to VoIP, you can port your number over to keep the same phone number. This may cost you money, depending on the provider. Nextiva and RingCentral, for example, do not charge for number porting, while Ooma does. The average cost of number porting is typically between $10 to $50 per line.
In addition to the cost of porting your existing number, another possible VoIP cost is the purchase of a toll-free, vanity, or local VoIP phone number. Toll-free numbers usually begin with 800 or 888 and provide a way for customers to call you without long-distance charges. Vanity numbers are numbers that spell a word related to your business (1-800-CONTACTS, for example) so customers can easily remember your number. You can also acquire a local number in a city where you don’t have a physical branch. Each of these types of VoIP phone numbers can be beneficial for expanding your business reach. Depending on the provider, these types of numbers can add to your VoIP cost.
Monthly and Annual Subscription Fees
Typically, VoIP cost is calculated by either a monthly or annual subscription fee. The subscription cost covers VoIP service, which allows you to make and receive phone calls over the internet. The total of your monthly or annual subscription fee will depend on your provider as well as the level of service you choose. Most providers offer differing levels, from basic to more advanced, to fit a variety of needs.
Monthly subscription fees give you the ability to start and stop service whenever you’d like. If you don’t want to commit to a provider long-term, this can be a great option. However, you’ll end up paying more for a monthly plan.
Annual subscription fees come with a reduced price when compared to the monthly plan. If your business is established, this can be a great way to save money on your overall VoIP cost. However, most annual subscriptions come with an early cancellation fee that can be expensive.
Per User and Per Line Costs
Another VoIP cost consideration is whether you’re paying per user or per line. The more users and/or lines you have, the higher the VoIP cost. Some providers charge based on the number of users. This means you’ll pay a monthly (or annual) fee based on how many users are on your system. This can add up if you have a large number of employees, but many providers offer reduced VoIP cost for a higher number of users.
On the other hand, some providers charge based on the number of lines you have in use. If you have a high call volume and use many lines, this pricing can be beneficial for you.
Functionalities and Features for Businesses
When it comes to VoIP cost, the more features and functionalities you use, the more you’ll be paying. Most providers offer tiered service levels so that you only pay for the features you need.
- Standard: For most VoIP plans, the basic service tier provides you with standard features like voice calling, call forwarding, basic video conferencing, and voicemail. To get more advanced functionalities, you usually need to pay for a higher tier of service.
- Advanced: Every provider offers slightly different features, but most advanced VoIP plans come with features like auto attendant, higher participant caps in video conferencing, third-party integration, call monitoring, and advanced call analytics.
When choosing between plans, it’s important to consider the features your business needs. If you don’t rely on call analytics, for example, you may be able to save on your VoIP cost by choosing a lower level of service.
VoIP Systems for Small Businesses
Before VoIP, business phone systems were often cost-prohibitive for small businesses. Luckily, VoIP cost is very affordable, allowing small businesses to benefit from all the advanced features of a business phone system. Finding the right VoIP system is essential. While VoIP cost is important, you’ll also want to consider whether the provider has the features you need. Here are some popular VoIP providers that work well for small businesses:
- Nextiva: Our number one suggestion is Nextiva. They offer a feature-rich VoIP platform with voice calling, video conferencing, and team chat. Plus, their award-winning customer service ensures you get the help you need when you need it.
- Grasshopper: For very small businesses and solopreneurs, Grasshopper is a VoIP system that offers business texting and voice calling. If you need a good, basic phone system that adds to your professional image, Grasshopper is a great choice with a low VoIP cost.
- Vonage: Another VoIP provider that works well for small businesses is Vonage. Vonage offers scalable VoIP solutions with tons of call management features as well as CRM integration. Plus, if you have the technical expertise, Vonage provides open API access for more customization.
- Zoom: Zoom may have made its name in the video conferencing space, but it offers voice calling and unified communications for an affordable price. Plus, Zoom is very user-friendly, making it another great option for small businesses.
The Nextiva Vs RingCentral Guide
Hidden Costs of VoIP
We’ve talked about the basic costs of VoIP, but there can be some hidden VoIP costs that you should be aware of.
- Network upgrades: Because VoIP relies on high-speed internet, you may need to upgrade your network for the best call quality. The cost of this will depend on your internet provider and the package you choose.
- Taxes and fees: Just like traditional telephone service, VoIP service comes with certain taxes and regulatory fees. The cost of these will depend on the area code of your phone number. If you have phone numbers in multiple area codes, you’ll see slightly different taxes on each. Tax rates can be as much as 20% to 30%.
- 911 Service: Some VoIP providers may charge a fee for providing E911 (Enhanced 911) service. Because VoIP numbers aren’t tied to a physical location, E911 service is necessary in case of an emergency.
- Add-ons: Depending on your VoIP provider, you may need to pay add-on fees for certain features like call recording, more lines, or technical support.
Before signing on with a provider, make sure you understand all the hidden VoIP costs. You may be able to negotiate some of the add-on prices down with your sales representative.
Short-Term vs Long-Term Costs
When it comes to VoIP cost, choosing between a short-term and a long-term commitment can have a direct impact on what you pay. When paying month-to-month, you will spend more per month than with a long-term contract. However, you also have the freedom to switch providers as needed.
On the other hand, a long-term contract will typically reduce your VoIP cost by a lot. However, the contract might include a large fee for terminating early. It’s important to be sure of your provider and communication needs before signing a long-term contract.
Costs of Multiple Communication Apps
One way that VoIP can save you money is by reducing the number of communication apps you subscribe to. Many VoIP providers, like Nextiva, RingCentral, and Vonage, provide unified communications–typically voice calling, video conferencing, business texting, team chat, and business app integrations.
For example, if your business is using Zoom for video conferencing, Slack for team chat, and traditional phone service for voice calls, you can be overspending a lot per employee. By choosing a VoIP provider with unified communications, you can completely replace many of your communication apps.
VoIP Phone Systems vs Traditional Phone Systems
When it comes to VoIP cost vs traditional phone systems, each has its own differences. It’s important to look at the cost of each before committing to a provider.
Traditional phone systems have typically been too expensive for small businesses and startups. In addition to the monthly price, which is usually quite a bit more than VoIP service, you’ll also have major capital expenditures to purchase and install the equipment necessary to run your PBX system. Plus, you’ll need to hire a team to keep the system running. If you need to add a line, you can expect to pay a lot for installation and hardware. Finally, making international calls on traditional phone systems can come with heavy rates. If you regularly make calls abroad, you can expect to pay a lot.
For VoIP cost, on the other hand, you spend less on hardware and installation. To add a line, you simply need to take it up with your provider–no physical installation needed. Plus, many VoIP systems are hosted, meaning the provider handles all the infrastructure and maintenance so you don’t need to hire an IT team. Finally, you can save money on international calls. Most international rates with a VoIP provider are significantly lower than on a traditional phone line.
Why VoIP Is Worth It In Cost
We’ve looked at VoIP cost in terms of basic costs, hidden fees, and how it compares to traditional phone systems. But is the cost of VoIP worth it? Yes! Making the switch from a traditional PBX to VoIP may be daunting, but VoIP is worth it in cost for these reasons:
- Upfront savings: With VoIP, you save a significant amount of money upfront. Fewer hardware purchases, low (or no) setup fees, and no expensive installation can save you a lot on VoIP cost compared to traditional phone service.
- Team productivity: In addition to measurable savings on VoIP cost, you’ll also see improved team productivity. Most VoIP systems offer advanced features that enable better collaboration among team members. Team members can share files and chat easily, whether they’re in the office or working remotely.
- Quality of service: While VoIP quality can depend on how stable your internet connection is, advancements have significantly improved the quality of VoIP calls. Many VoIP providers offer HD call and video quality for clear communication that is as good as or better than traditional phone service.
- Advanced features: With a wide range of features that enhance productivity and collaboration, VoIP gives you more than a traditional phone system. Features like call forwarding, voicemail transcription, video conferencing, and mobile integration are usually part of the VoIP without any additional hardware or services.
- Uptime: Phone outages have been considered a normal part of business. But with VoIP, you can typically expect a very high uptime. Many providers, like Nextiva, offer 99.999% uptime, which means your phone system will be down for less than 6 minutes a year. This high uptime keeps your business working seamlessly.
VoIP Cost: Summary
How much does VoIP cost? That depends on many factors, including the provider, level of service, number of users, and features you opt for. Finding the right provider for your needs will make a huge difference for your VoIP cost. You’ll want to consider monthly vs annual fees, hidden costs, and more.
If you’re looking to find a VoIP provider, contact OneStop Communication. We’ll put together quotes from several top providers so you can find a plan that works for your needs and your budget.
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