Switching to Voice over Internet Protocol (VoIP) once felt like a gamble in call quality. Today it is a mainstream decision driven by faster broadband, mature cloud platforms and a looming analogue switch-off. Yet the first question business leaders still ask is simple: “How much will it cost?”

This in-depth guide breaks down every expense—up-front and ongoing—for the three main deployment models (hosted, on-premises and hybrid), explains the hidden variables that inflate or shrink your bill, and offers a step-by-step checklist for building an accurate budget. Use it to compare quotes with confidence and maximise every pound of your telecoms spend.

1. Why VoIP Pricing Has Changed

From Skype’s free calls in the early 2000s to today’s enterprise-grade platforms, VoIP economics have shifted for three reasons:

• Bandwidth Boom – Average UK business broadband now exceeds 100 Mbps. That capacity eliminates the crackle and drop-outs that once plagued internet calls and supports add-ons such as HD video and real-time transcription.

• Cloud Competition – Hundreds of providers have driven subscription prices down while bundling more features into the base licence.

• PSTN Withdrawal – BT stops selling new analogue lines nationwide this year and will switch off the copper network entirely in January 2027. Mass migration is accelerating volume discounts and promotional incentives.

The result is a market where cost can be scaled precisely to usage rather than locked into inflexible line rentals.

2. Hosted (Cloud) VoIP: Pay-As-You-Grow Simplicity

Cloud VoIP is the telecoms equivalent of Office 365: the provider owns and manages the core infrastructure, you consume it as a subscription.

Up-front investment

Little to none. Most providers ship pre-provisioned handsets; softphone users just download an app. If existing connectivity is congested, budget £30–£70/month for a separate fibre circuit dedicated to voice.

When it shines

• Rapid growth or seasonal staffing

• Multi-site or hybrid-workforce organisations

• Firms lacking in-house telecoms expertise

Watch-outs

1. Add-on creep – call recording, analytics dashboards or extra storage often sit outside the advertised bundle.

2. Fair Usage Caps – “unlimited” usually means 3,000–5,000 minutes per user. Heavy outbound teams should verify thresholds.

3. On-Premises VoIP (IP-PBX): Control and Cap-Ex

An on-site IP-PBX mirrors the architecture of a legacy phone switch but routes traffic over your internal network. You purchase the server, licence the PBX software and maintain it yourself.

Ongoing costs

• SIP channels – £6–£12 per concurrent call

• Software assurance – 15–25% of licence annually

• Maintenance staff or contract – from £3,000/year for SMBs to six-figure salaries at scale

When it shines

• 24×7 sites that cannot rely on public cloud uptime

• Organisations with strict data-sovereignty or compliance requirements

• Enterprises wanting deep customisation (e.g., bespoke call routing logic)

Watch-outs

1. Capital depreciation – hardware refresh cycles average five to seven years.

2. Single-point failures – without redundant nodes, any appliance outage means organisation-wide downtime.

4. Hybrid VoIP: Bridging Analogue and IP

Hybrid solutions bolt VoIP functionality onto an existing PBX through a gateway or Integrated Access Device (IAD).

Use-cases

• Phased migrations where every desk cannot be cut over at once

• Retaining specialist analogue lines (lifts, alarms, franking machines)

• Businesses with sunk investment in a robust on-site PBX but rising international call costs

Watch-outs

Hybrid is a tactical life-extension, not a long-term strategy. Most firms sunset the analogue element within 24 months to avoid dual-running overhead.

5. Eight Factors That Distort the Headline Price

1. Bandwidth Quality, not just Quantity – Packet loss above 1% or jitter over 30 ms forces expensive Quality-of-Service upgrades.

2. Number Porting Fees – typically £10–£20 per DDI but can rise for non-geographic numbers.

3. International DIDs – required for local-presence outbound dialling; monthly rental varies from £3 (US) to £20 (Middle East).

4. Compliance Recording – FCA or MiFID II rules mandate tamper-proof storage; cloud retention can add £5–£10 per user.

5. Call Centre Licences – agent, supervisor and wallboard licences often billed separately from base UC seats.

6. Handset Lifespan – cheaper models save £20–£30 each today but last half as long.

7. Power Protection – PoE switches and UPS keep phones alive during outages; budget 10–15% of network-hardware spend.

8. Training and Adoption – assuming “it’s just a phone” ignores uptake of soft-client features; workshops can double productivity gains.

6. Building a Reliable VoIP Budget

1. Audit current estate – catalogue every line, DDI, fax, alarm and lift phone.

2. Define call patterns – inbound vs outbound, peak concurrency, international hotspots.

3. Score connectivity – run MOS and jitter tests over at least one working week.

4. Shortlist deployment model – match Hosted, On-Prem or Hybrid to budget, control and compliance priorities.

5. Request fully itemised quotes – insist on line-level pricing for licences, minutes, hardware, install, training and support.

6. Model three-year TCO – include depreciation, software assurance and probable seat growth or reduction.

7. Stress-test scenarios – add 20% call-volume spikes, currency fluctuations for overseas minutes and worst-case failover costs.

8. Select provider – weigh lifetime cost against SLA uptime, support responsiveness and roadmap alignment.

7. Example Three-Year Total Cost of Ownership

A 60-user professional-services firm comparing cloud vs on-premises:

Although the on-premises option looks cheaper over three years, it assumes internal IT staff absorb management overhead. Outsourced maintenance or future hardware refresh could tip the balance back toward cloud. Always adjust these inputs to your own wage and depreciation rates.

8. Security: The Non-Negotiable Line Item

Whether data travels over the public internet or sits in your comms room, VoIP security should never be an afterthought.

• Hosted – verify ISO 27001 certification, UK data residency, multi-factor admin log-ins and 99.99% SLA minimum.

• On-Prem – ring-fence voice VLANs, patch firmware quarterly and deploy SIP firewalls or SBCs.

• Hybrid – monitor both stacks; gateway misconfiguration is a favourite target for toll fraud.

Budget 3–5% of total spend for proactive penetration testing, intrusion detection and staff awareness training.

9. How Amvia Cuts Through the Complexity

Amvia’s comparison engine analyses:

• 30+ UK carriers and cloud UC vendors

• Real-time tariff updates across 8,000+ call destinations

• Historical bandwidth performance by postcode

Our consultants layer that data with your usage profile to generate a side-by-side Five-Year Cost of Ownership Matrix and identify the break-even point for each model. Clients typically shave 18–32% off headline quotes and accelerate migration by four weeks.

10. Next Steps: From Quote to Cut-Over

1. Book a complimentary cost audit – send us your latest phone bill; we’ll benchmark it in 48 hours.

2. Run a five-seat pilot – validate call quality, mobile apps and number-porting timelines.

3. Phase migration – begin with least-critical departments; keep ISDN as fall-back until confidence is high.

4. Review at 90 days – use analytics to refine call flows, measure productivity gains and adjust licences up or down.

Conclusion: Invest in Value, Not Just Price

VoIP’s headline figures—often 30–50% cheaper than PSTN—tell only half the story. The true ROI lies in flexible scaling, baked-in disaster recovery and unified collaboration tools that unlock measurable productivity gains. Choose the wrong model, however, and hidden costs will erode those savings.
By mapping every direct and indirect expense upfront—and partnering with an independent advisor like Amvia—you can deploy a future-proof telephony solution that delivers predictable budgets and unbeatable user experience year after year.

Ready to run the numbers? Contact Amvia today and discover how cost-efficient your next phone call can be.

For decades, the traditional phone system has worked in basically the same way, but Voice Over Internet Protocol (VoIP) services are increasingly presenting a viable alternative. When asked why they are making the move, most businesses give one answer more than any other: money. But exactly how much does VoIP cost?

How much VoIP phones cost

When services fromVoIP providers, such as Skype, first appeared, their biggest selling point was the ability to offer free or low-cost calls – even internationally.

The one drawback was that the call quality was less reliable. Internet connection speeds generally lagged behind what was needed and, as a result, voice quality was poor and video unreliable. The only reason you’d use it, therefore, would be cost.

Since then, though, things have changed. 3G has been followed by 4G, and5G is on the horizon. Even basic business broadband packages offer speeds of 20Mbps and more, with many pushing into gigabyte territories. At these speeds, voice quality becomes comparable to traditional landlines, video is clearer and it opens up additional services such as audio to text, video conferencing and much more.

The options open to businesses are therefore much wider:

• Hosted VoIP:The provider hosts all the equipment necessary for housing the IP-PBX and controlling the technology. This is normally a more affordable option.

• On-premises:You host all the equipment in your office which means you’re responsible for its upkeep and maintenance. Installation is quite expensive, but you retain full control over the technology as well as access to advanced features.

• Hybrid VoIP:A half-way house for people who want to upgrade to VoIP but don’t want the cost of rewiring associated with moving to a full system.

Cloud-based hosted VoIP

The most affordable option is cloud-based hosted VoIP. There are many providers out there with prices generally ranging from between £20 per month to £50 per month. The costs may rise further if you want additional lines. Many will offer a cost per user, but this might be discounted if you’re buying in bulk. For example, you might have costs of £30 per user up to a total of five, but if you need a hundred users or more the cost could fall to £20.

A fast internet connection may be able to handle call capacity plus general internet traffic without any problems, but slow connections may struggle. You may need to upgrade or set up an additional internet connection dedicated to VoIP, which will obviously cost more.

Many systems will also provide VoIP phones or headsets as part of the package, although you may have to pay for additional equipment. You might also buy customised headsets privately. Although they will cost more, they do allow you to choose the exact type of system you want. You’ll also have to make sure the headsets will be compatible with the new system.

Costs will normally be tiered depending on what features you have. For example, a basic package might include options such as voicemail, mobile apps or customer support. An intermediate service might add fax or an unlimited number of VoIP calls while a premium service may enable it to sync with other platforms, such asSalesforce.

Individual calls will often be free of charge or come with a much smaller fee. Most will have a certain number of calls you can make free of charge or at a much lower cost. It is possible to have lengthy video conferences, for example, between multiple participants based in many different parts of the world for a fraction of the cost of a traditional call.

Getting started, then, is affordable and you can also ensure you only use as much capacity as you need. If you need more, you can upgrade and, if you need less, you can cut back. It’s a great way to optimise your costs and avoid waste.

The biggest downside is security. Data shared online with third-parties can be vulnerable and there are many cyber criminals out there looking to take control of it. You will be dependent on your provider’s security systems, but if they do experience a problem, you will still be liable.

On-Premises PBX

If you’re a larger organisation with more than 40 or 50 employees, you may need an on-premises PBX phone system. Rather than having all the equipment hosted through a third party, you will host it onsite. This means buying all the equipment and managing it yourself, which may include employing people to oversee maintenance and repair.

The upfront costs, then, can be high. Depending on the size of your organisation – how many lines you want, the number of employees and features you’re looking for – costs could be anything from a few hundred pounds to several thousand per user.

However, ongoing costs can be lower than with a cloud-based provider. Because the data will all be contained within your own system, rather than being shared online with a third party, you will also have more control over security.

Hybrid VoIP

This is a useful option if you’re integrating with an existing or outdated PBX system. To integrate with an analogue onsite system, you will usually require a gateway or integrated access device (IAD) which connects to a port on the PBX server. This might include a one-off charge of between £100 and £300 and you may have regular charges of anything between £100 and £300 per month. This allows you to retain your current system but add additional VoIP features such as cheaper international calls.

Choosing a VoIP provider

There is a wide range ofVoIP providersto choose from. Some are better than others and offer various features at different price points. The more you shop around, the better your chances of finding an option which meets your needs. Here at Amvia, our comparison software can help you find the best deal for your business. Contact us today to find out how we can help.