Yes, hosted VoIP is mainly cloud software, with telephones as endpoints.
An example of simple cloud software pricing is Google Workspace Business Plus. The service costs $12 per user per month, period. Since data storage is unlimited, there’s no extra charge for heavy usage.
Yes, there are usually services required for setup and data migration, but the software itself is a single line item.
Even though business VoIP is served up from a data center in a similar manner to Google Workspace, VoIP has inherited a regulatory (FCC) and taxation legacy from the days of traditional landline service.
As with car lease rates, some hosted VoIP providers promote a base price on their homepage, but do not display the additional fees.
These are the recurring per user monthly or annual charges. Some vendors offer a discounted annual prepayment option.
Most vendors have tiered pricing. For example, the per user cost may drop when there are 20 or more users.
The base VoIP service itself is variously referred to as “users”, “seats” and “lines.” This charge correlates to the number of people who will have their own VoIP extension.
The published base price generally ranges from about $20 to $35 per user per month. One vendor charges as much as $59.99 for their highest level plan. Keep in mind that the published price may or may not include extras, depending on the vendor.
Many VoIP providers charge a separate recurring fee for each employee who needs a direct phone number, such as 916-555-1134.
When an employee does not have a DID number, they need to include their extension number on their business card and in their email signature—e.g.: 916-555-1000 x134
The extra charge for a DID number is about $5 per user per month.
This is charged to recover contributions the VoIP provider is required to make to the federal Universal Service Fund.
This fund supports affordable, nationwide telephone service to rural health care providers, certain low-income consumers and eligible schools and libraries.
When not a part of the base price, this amount can range from $2 to $4 per user month.
VoIP providers charge this fee to recover costs of providing 911 service to their customers as required by Federal Communications Commission regulations.
The FCC has a number of requirements for VoIP providers, including the need to “automatically provide 911 service to all customers as a standard, mandatory feature.” VoIP providers are not allowed to let customers “opt-out” of 911 service.
If this is not included in the base price, it can be up to an additional $2 per user per month.
These charges are imposed by certain state, local, and municipal governments. Fees help pay for local emergency services such as fire and rescue.
There are a number of costs and potential costs associated with hosted VoIP that are outside of the recurring monthly or annual fee.
Some hosted VoIP providers charge a one-time installation fee. Most do not.
It’s worth asking a prospective vendor whether there is a separate installation charge.
A cost that is not directly charged by VoIP providers—but that is sometimes required—is faster internet service.
When a business moves from traditional landline service to hosted VoIP, the existing internet bandwidth may not be sufficient to support the additional data traffic.
When this is the case, the company will need to upgrade their internet service, which translates into an additional recurring monthly fee.
Business VoIP cost is not always straightforward. For buyers, it’s important to ask about all of the potential costs up front in order to avoid surprises down the road.