What is the average cost of an IP PBX phone system?

Purchasing an IP PBX phone system does not have to be a major expense, and increasingly, options are available for small businesses. However, the scope of your IP PBX can vary tremendously depending on your needs, the size, and the number of features, along with the level of custom installation, integration, and service you require.

Attempting to determine the average price of an IP PBX is something like trying to determine the average price of a piece of real estate without knowing what city it’s in. An IP PBX may be just a few hundred dollars, or it may be tens of thousands.

The IP PBX itself does not operate in isolation, and the cost of the unit is only a small part of the entire spend—and as such, the unit price when considered in isolation is of little help when making a buying decision. In general however, an IP PBX is about the same, or sometimes slightly less, than a conventional PBX, and often comes standard with more features.

When calculating the estimated cost however, the cost of the IP PBX unit will be calculated in conjunction with several other things, including:

Initial installation costs. You may need a third party provider or VAR to install your system.

Additional equipment. You may also need additional equipment to provide necessary features such as voice priority.

Security. If your current firewall is not compatible with your IP PBX, you may need to also spend money on a more modern firewall. Fortunately, most newer firewalls are VoIP compatible.

Monthly management fees. You may also require a service contract, or may wish to use a managed service; this will add to your monthly spend. However, while giving you another monthly bill, it will be mitigated somewhat by the decreased need to manage most tasks in-house.

What are you replacing?

As any accountant will tell you, a “hidden” part of the cost of your IP PBX phone system installation will be what it is replacing. Actual bottom-line costs may be less for a brand-new installation for a new company, as opposed to a company that has an existing traditional PBX already in place. If you have a traditional system in place already, then you are probably going to be replacing equipment that has not yet been depreciated, and you will take a financial hit.

Mitigating factors

A brand new system on the other hand, indirectly is cheaper for several reasons, both directly and indirectly. Because VoIP is IP-based, and runs over your Category 5 Ethernet cable, there is no need to run standard phone cables, and this will be a mitigating factor in determining overall expense.

Also, if you have multiple locations, the IP PBX can save big money. Traditional PBXes required a PBX for each location, but VoIP is not geographically based and multiple branch offices and remote locations can be on the same PBX.

Additionally, administration will be lower, since there is less physical moving and plugging to execute adds, moves and changes. The add/move/change tasks can usually be done at the computer screen.