n: How many - roneyribeiro

In this guide, we'll break it down

the total cost of VoIP (Voice Over Internet Protocol)

and everything you need to consider along the way. Because VoIP is a modern phone system, it is still capable of saving you money compared to older phone systems.

It's because

commercial telephone services

with large-scale efficiencies are able to lower phone service costs for customers. Yet like many IT services, VoIP costs vary. It all depends on the exact choices you make when making your purchase.

For customers, there are many factors to consider when choosing a VoIP provider:

The reliability of the company

The level of customer support you will get

Ease of use

General features and benefits

Cost

Cost remains one of the most important factors. Here's how much VoIP really costs - let's learn how it can save you money.

How much does VoIP cost?

Depending on your VoIP provider, VoIP plans generally have two types of costs: a monthly line rental fee and a usage fee. In other words, you will pay a monthly fee to access your provider's services and can pay additional charges for outgoing calls you make.

Some providers may also include calling plans, giving you a certain number of minutes or even unlimited calls for a monthly fee. At Nextiva we have three plans for line rental, none of which charge an additional monthly fee. Our most basic package includes the main essential features, such as:

Cloud PBX

A simple way to manage your phone system online, set up new users and redirect calls with the click of a mouse.

Local and toll-free number -

No need to pay extra for number rental, it's included.

Voicemail to Email -

Missed a call? Nextiva will automatically notify you with a voicemail message in your inbox.

Shared Call Appearance -

Easily display an extension on multiple phones so you can answer calls on someone else's behalf.

The beauty of VoIP is the many advanced features available. Customers who have more

demanding telephony requirements

can upgrade their Nextiva packages to include features such as:

Call me now -

Someone browsing your website can click a link to initiate a call through your Nextiva system.

Conference bridge -

Connect multiple callers in the same live call for easy collaboration

Call recording -

Indispensable in some

Business VoIP

settings, choose the best Nextiva package and you will get call recording included.

Professional greetings -

A professionally recorded greeting for incoming calls creates a great impression and is included in the premium Nextiva package.

A closer look at VoIP costs:

We've given you a basic primer on VoIP costs, but it's worth taking a closer look at exactly what VoIP costs and the sources of those costs.

Sometimes it is possible to reduce costs by managing these individual costs. Regardless of the strategy, you will almost always find that VoIP is less expensive than traditional telephony. Let's look at the individual cost factors of VoIP.

Number of users

Many technology services are billed based on the number of active users, and this is also the case for VoIP.

Here is a breakdown from one VoIP user:

VoIP users are not calculated by the number of employees using the phone service. Instead, it is calculated by the number of lines you need open at any given time. So if you have a maximum of 10 customers on the phone at any given time, you will need 10 users.

Sometimes a user can have their line live and online on two physical phones, one at home and one at work. It's still one user.

The easiest way to think of VoIP users is to think of individuals: each person

needs a phone line

, and they count as one user.

Each VoIP provider will provide pricing based on the number of users. You will pay more per user for a lower number of users (like 1-4 users), while 100 or more users will be cheaper per user.

For example, here is the price breakdown for the

Basic Business Communication Suite

Basic

Monthly

Basic

36 month contract

Prepay

12 month contract

1-4 users

$35/month

$33/month

$30/month

5-19 users

$30/month

$28/month

$26/month

20-99 users

$26/month

$24/month

$22/month

100+ users

$24/month

$22/month

$20/month

For many businesses, the number of VoIP users will roughly equal the number of full-time equivalents.

How to stop overpaying your business phone bill

VoIP features you need

Your VoIP service will determine your pricing. Most providers (including Nextiva) offer a few options, depending on the features you need. The following features are must-haves and should be included in any VoIP system:

Call from any device -

You need the flexibility to add users to a choice of hard and soft phones, including mobile phone apps.

Maximum reliability -

Look for a partner who has a

business platform

with multiple points of presence and carrier-grade data centers with high uptime.

Easy management -

Ideally, you should be able to manage users,

VoIP numbers

and call activity with one click using an online portal.

Profitable -

Your VoIP solution should

save you money

.A Nextiva VoIP plan, for example, will cost you much less than buying and operating a traditional phone system.

Customer service

A good VoIP provider will have an in-house team that can help you with customer service inquiries, including a toll-free line for easy phone support. At Nextiva, we pride ourselves on providing the best customer service in the industry. In fact , we have won numerous national awards for the Amazing Service® we provide.

The features above are all essential, but many businesses need more from their phone systems, and that's why VoIP providers usually offer additional options. It's worth thinking about these extras and determining how advanced features can help your business bottom line. Some of the more popular optional features you should consider include:

Number management -

Customizing number usage is a great feature, including assigning multiple numbers to a user. Hunt groups where an incoming call rings on multiple handsets are also useful in many situations.

Conference

Often it is much easier to collaborate over the phone via conference call compared to ping pong over email. This is why conference call is a popular add-on for many VoIP users.

Voicemail to text

Automatically converts voicemail to text message or email so you don't have to call a voicemail number to hear a message.

Queued call

You don't want to lose incoming sales calls to voicemail, and call queuing lets you keep your customers waiting, including estimated wait time.

Virtual Extensions -

You can set up a forwarding number so that incoming calls to your VoIP system are redirected to a landline or mobile phone.

Call recording

Backing up call recordings can be very useful from a customer service perspective, including for training. Some companies are also required to record incoming and outgoing calls for regulatory purposes.

Web Integration -

Want to make it easier for your customers to connect? Add a call me feature to your website that automatically generates an outbound call from your VoIP system.

A huge advantage of VoIP is the ease of upgrading and changing plans. You are not tied to equipment stuck in a rack that is expensive to upgrade. Instead, VoIP customers can simply request a feature upgrade from their provider and quickly get the most advanced feature set they need.

Duration of the agreement

One of the cost drivers for VoIP is the length of the contract. You are likely to be offered a lower price if you can commit to a contract term (12 to 36 months, for example). The longer your contract is , the lower the price.

Still, many businesses would prefer the flexibility of a monthly contract, and most VoIP providers will offer a monthly contract but at a slightly higher price. If your business is new to VoIP, you may want simply opt for a month-to-month contract, but longer contracts are almost always more profitable.

Prince Rich of Rich Technology Group explains the contract duration and all the ins and outs of VoIP contracts in their video below:

For larger enterprises, you may want to specify the must-have features and budget in a

VoIP Tender

and see if the VoIP provider can meet them.

Phone choice

If your business is moving from a traditional phone system, you will need to budget for the costs associated with the change.

Internet phones

work differently than standard phones; instead of converting speech to analog audio and sending it over a wire, VoIP uses the Internet. A VoIP phone converts audio into digital data and sends it over the Internet.

VoIP works

using what is called Session Initiation Protocol, or SIP. SIP handles everything related to setting up a call and transmitting audio.

n: How many

You can either buy new SIP-enabled VoIP phones or add an adapter to your analog handset. This is called an ATA/

VoIP adapter

Keep in mind that

VoIP phones

are more advanced and can give you many features in addition to what an analog phone can provide, including:

Quick and easy connection to a VoIP provider

Ability to manage up to 16 lines simultaneously

Color LCD screens for easy call management

High definition voice capability

Embedded web apps

Video conferencing capability

Your business may not need all the advanced features, but don't choose the most basic handset just to save money. Assess which features would be most useful for your business and invest in capable equipment even if that means the price of your VoIP phone is a bit higher.

Finally, if you switch from another VoIP provider to Nextiva, you can probably keep your current SIP handsets. Nextiva can unlock 90% of handsets used by other providers, so you don't need to buy new phones simply because you are switching to a cheaper and better VoIP provider.

How much does a softphone cost?

One of the benefits of VoIP is that it no longer ties you to physical handsets connected to a physical line. This greatly reduces your

VoIP phone system

costs. With VoIP, you can use a "softphone", which is simply an application that runs on a PC, Mac or mobile phone running iOS or Android.

Softphones can act as fully functional phones for making outgoing calls, ringing on an incoming call, and facilitating conference calls and multiple lines. You can usually pay around $50/month for a softphone, but Nextiva won't get you will only charge $3/month for a softphone. At this affordable price, a softphone is definitely worth a look. We've compiled a list of features and benefits, comparing physical phones to softphones.

Factor

Physical phone

Softphone

Call quality

Simple device designed with 100% focus on delivering quality calls. Excellent echo cancellation.

Depending on the audio quality of the device used (PC, mobile device, etc.). To ensure optimal performance on any device, we recommend using headphones.

Reliability

Always on and always available, unaffected by power outages.

The PC or mobile device must be turned on. Power outages and battery drain can be a problem.

Always On

Physical phones never go out, they're always live.

A PC can go into sleep mode, in which case incoming calls will not be noticed.

Ease of use

Everyone knows how to use a phone, no learning curve. Easy setup.

Functionality can be difficult to find if the user is unfamiliar with the softphone. Setup can be tricky.

Emergency room

Support emergency calls.

Requires specific setup and configuration.

Security

Meets safety regulatory requirements.

Does not meet safety regulatory requirements.

VoIP vs conventional phone costs

The cost of VoIP systems is generally lower than that of conventional telephone systems for a wide range of reasons. The cost savings come through a mix of improved efficiency and

technological advantages that VoIP brings

Pick the wrong VoIP provider and your VoIP experience can be costly. But for most businesses, partnering with a good VoIP provider will save money. Let's look at the areas where you can expect to save money.

Personnel costs

VoIP can help you save on personnel costs for two reasons:

PBX experts -

With VoIP, you eliminate the need to employ technicians who can manage a

PABX

These specialized workers can be expensive. VoIP systems have much in common with wider Internet technologies and can be more easily managed by your existing IT team compared to a proprietary PBX system from a telecommunications provider.

Secretaries -

Your receptionist may earn a salary of up to $45,000 per year. Your company may replace much of the day-to-day duties of receptionists by using the auto attendant features built into VoIP services. Your receptionist may be reassigned to another team, such as sales or marketing.

Equipment costs

VoIP simplifies your

telecommunications equipment

provisions; there is no need for extensive on-site hardware such as a

PBX

kit when using VoIP. In fact, with cloud VoIP, all you need are handsets. VoIP brings a number of equipment cost savings:

Ditch the PBX -

A classic PBX is expensive equipment that belongs to the telecommunications systems you use. You cannot reuse a PBX for other purposes, it is simply an expensive piece of kit that is unique to your

business phone system

Service and maintenance -

Losing your onsite equipment means you don't need to maintain it, saving you the cost of regularly updating and upgrading onsite equipment. can be especially difficult to find parts and service for older systems.

Small businesses save -

Start-up costs are a big issue for many small businesses. VoIP helps small businesses save money because a business can set up a fully functional phone system without the costly upfront expenses typically associated with phone systems.

copper wiring

Cabling doesn't always come to mind as a cost concern, but internal copper cabling can be a major cost factor for

JARS

and PBX systems. Your traditional telephone system will use a twisted pair of wires to carry the analog telephone signal. This means that every office that requires a

fixed line

phone also requires a dedicated wire leading to this office.

The copper cabling requirements of a traditional PBX can quickly add up to significant costs when you move house or if your business undergoes a reorganization.

Since VoIP uses Internet technology, you don't need to run an extra set of wires or rely on

PSTN

networks to activate your telephone system. VoIP simply uses the internal company network already in place. If your company has PCs connected to the Internet, you can connect to VoIP without installing cables.

Change fees

It's also worth thinking about the equipment costs of switching to VoIP. There's good news here: your business can switch to VoIP with almost no investment.

Voice over the cloud

the systems do not require special equipment on your premises as all equipment is hosted by the supplier.

You can start using VoIP in your business as long as you have a computer with a sound card. All you need is a cheap headset. You can also use your existing handsets. Just buy a cheap ATA adapter for each handset.

Number of lines used

A key difference between VoIP and traditional PBXs (i.e. the traditional system) is elasticity and scalability. A traditional PBX requires you to have a physical circuit for each extension.

If your business buys a system with a capacity of 50 circuits, it will be extremely expensive to upgrade to 200 circuits later. is much cheaper and faster to scale with VoIP than with a traditional PBX.

Broadband internet connection

Even though VoIP is incredibly easy to use, there is one important factor that businesses should not ignore. The quality and reliability of VoIP installations depend to a large extent on the quality and availability of your business Internet connection.

Most businesses already have high-quality Internet capabilities, so VoIP connectivity requirements are rarely a problem. Still, businesses need to ensure that their Internet connectivity is suitable for

VoIP and make sure they implement a strong network

Management Principles.

Long distance costs

Calling costs are always a big factor with telephony. Fortunately, VoIP offers some twists on the subject of calling costs. VoIP tariffs actually save money.

Long distance calls -

Your telecommunications provider may charge you very high rates for long distance and international calls. In comparison, many VoIP providers offer very low rates on long distance calls and international calls or simply include these calls in their packages.

Origin and time of call -

With VoIP, where a call originates is less important in terms of pricing. The time a call is made does not usually affect the price of the call either.

Installation costs

Finally, setup costs for VoIP are generally low. This is because your VoIP service provider does not incur high costs when setting up a new client. Setting up a new VoIP client is simply setting up the software back-end of a VoIP system. This is done with the click of a mouse.

Because VoIP setup is so easy, many providers waive setup fees as part of VoIP pricing. If you choose Nextiva as your VoIP partner, you won't be charged any setup fees. We also give you full access to our support team, user resources and training videos.

Calculation of total cost of ownership

Any technological solution must be considered from the point of view of

total cost of ownership

, or total cost of ownership. This also matters for the costs of VoIP phone systems. It looks like it at first glance, once the TCO calculation has been performed.

Calculating the total cost of ownership for VoIP is, fortunately, easy. You should include the following factors when adding up the costs of VoIP phone systems:

Monthly line rental fee for each user

Any increased charges for an enhanced internet connection

The cost of calls

The cost of feature-rich handsets

This allows for a simple calculation, much simpler than a traditional phone system where you would need to factor in ongoing maintenance costs, system migration costs and much more.

How to stop overpaying your business phone bill

Conclusion: how much does VoIP really cost?

The combined cost of a VoIP system is much simpler than the cost structure of a traditional analog PBX system. Not only is the VoIP cost structure simple, but it is also much lower for most businesses.

That said, achieving a low cost structure depends to a large extent on your choice of VoIP partner. You must choose the right partner to enjoy the desired combination of low costs and good service.

Consider signing up Nextiva as a VoIP partner. Nextiva is a very experienced VoIP provider that has been serving business telecommunications needs for many years.

to find out how we can provide cost-effective and reliable telecommunications solutions for your business.

Cameron Johnson

Cameron Johnson is a Market Segment Leader at Nextiva. Along with his Nextiva blog posts, Cameron has written for various publications including Inc. and Business.com. Cameron was recently named Utah Marketer of the Year .

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