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How Much Does a Business Phone System Cost?

Posted by Gregg Haughton on Sep 19, 2011 9:09:00 AM

I sell telephone systems, and the most common question I get is "how much does a business phone system cost?". In this blog post I will answer that questions. If it makes you a better buyer, great!
Of course there is a wide range of costs depending on size, complexity, and what the installation environment looks like, but I will break down the components and provide an average cost so you can get a good idea what a new phones system would look like. The components are:
  • Wiring
  • Network Services
  • Telephone Stations
  • Control Unit or IP-PBX Server, Licensing
  • Installation and training

Wiring - Each phone and each computer will need to be connected to a central location. The cost to run a pair of Cat5e wires to a location is $190. You will also need patch panels, wire management, and perhaps a data rack or wall brackets, so budget $500 to build out the data closet. If you are replacing an existing system, you may be able to reuse the existing wiring.

Network Sevices - You will need both telephone and internet services. For simple telephone service, called POTS lines, the cost is about $40 per line per month. For digital services, a PRI (23 lines) is about $450 per month. Internet can be as basic as DSL ($85 per month) to very high speed fiber services. Cable internet will run you about $100 per month. For a mid sized business needing phone and internet, budget $600 per month and you'll be in the ball park.

Telephone stations: Again, there is a range. Budget $200 per station for a digital phone system, or $350 per station for and IP phone. If you need a reception phone with a call director (buttons for each extension or software based console) add $750. If you need a conference phone they are $650 for a standard conference room.

Control Unit - The common control equipment for a business phone system may be a Server or a Cabinet depending on what system best fits your appication. I will lay out average Control Unit costs based on system size.

Digital or Small IP-PBX (not server based) with Voice Mail and basic Unified Messaging Capability:

  • 5 Phones - $1500
  • 15 phones - $1800
  • 25 phones - $5300
  • 35 phones - $7000
  • 50 phones - $11,000
  • 75+ phones - $250 per phone (100 phones $25K)

Server based IP-PBX with IP Phones, station and desktop interface licensing:

  • 20 Phones - $6000
  • 40 Phones - $12,900
  • 50+ Phones - $325 per phone

Installation - Installing a business phone system entails building and mounting the common control unit, placing the telephones at their locations, programming the applications, and labeling the telephones. Then both users and administrators need to be trained on how to use the system. Since these steps need to be done for both large and small systems, it takes nearly as long to install a 10 phone system as a 30 phone system. Use the following ranges to budget the installation of a business phone system:

  • 5 to 15 phones: $1200
  • 16 to 25 phones: $2200
  • 25 to 50 phones: $3000
  • 50+ phones: $50 per phone

Of course there are many variables that will affect the ultimate cost, but I hope the guide I have provided can be a useful tool for budgeting.

When I come in, I will look at your business through your eyes and search for ways to improve your employees productivity, enhance your customer service, and lower costs.

I welcome your comments...and if you find this blog post helpful, pass it on to a friend.

 Gregg Haughton

Gregg Haughton

 Update: July 2017 - I'd like to thank the folks who have read this post...over 24K to date. Below is a link to an update to the original post. 

 How much does a phone system cost, revised for 2017.

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