How much will your project cost? Get Estimates Now

How Much Does It Cost To Install A Telephone System?

National Average Change Location | View National
$391
Typical Range
$150 - $651
Low End
$75
High End
$1,281

We are still gathering data for this location.

View national costs or choose another location.

Let's get local cost data for you. Where are you located?

Can we help you find Home Office pros?

Financing options provided in partnership with Prosper

Telephone systems allow businesses of all sizes and home offices to enjoy enhanced consistency and clarity of communications. Systems may be integrated with Internet service to decrease the cost of long distance calling and international calls, which allows for lower overhead costs.

As each business has specific communication needs, the costs of installing a business phone system can vary greatly. Some of the most important cost factors are the type of system, desired add-ons, number of lines, and the size of the business. The existing infrastructure and speed can also affect the overall costs. The following are explanations of the main business phone solutions, based on a five-line system, as well as their average costs.

On This Page:

  1. PBX Phone System
  2. VOIP
  3. Key Systems
  4. KSU-Less Systems
  5. Conclusion

PBX Phone Systems

A PBX (Private Branch Exchange) phone system is a private network that is installed on-site. The main unit connects all of the phones within the organization, as well as to the PSTN (public-switched telephone network) and any other third-party providers or trunks. Staff members are able to make phone calls using one of the many outside lines and the main unit processes all of the telephone communications going in and out of the business.

Costs

  • Installation: $1,700 (wiring and installing all necessary components)
  • Set-up Fees: $2,500 (includes non-server main unit and five telephone units)
  • Monthly Maintenance Fees: $600 (covers internet and phone service costs)
  • Total Cost: $4,800 (complete installation for a basic system and first month’s maintenance fees)
  • Annual Maintenance Total: $7,200 (does not include replacement units or repairs)

Main Features

  • Auto-Attendant
  • Conferencing Support
  • Computer-Technology Integration (CTI)
  • Voicemail

Pros

  • They offer improved call quality. PBX phone systems do not rely solely on the business’s Internet connection. As such, slow Internet speeds and crowded bandwidth do not have any bearing on the call quality.
  • They are a reliable means of communication. Unlike VoIP and other internet-based phone systems, PBX solutions can operate without Internet access and electricity. For example, if the power goes out a PBX system will still operate as usual.
  • They enhance a professional image. PBX systems enhance a business’s image and brand reputation by allowing a small business to have one centralized number that directs to multiple different lines. Thus, companies can feature a single number in all of their marketing materials that customers and clients can use to reach any department.
  • They have a built-in menu and extension support. PBX systems feature menus that callers can use to access any staff member or department. They also offer dedicated extensions, which are allocated to each employee or department, allowing customers and clients to contact individuals directly.
  • They offer emergency number support. Unlike VoIP systems, a PBX system is automatically linked to a geographic location because it connects to the central box. Therefore, if you do need to dial an emergency number from your business location, the network will know exactly where to direct the call.

Cons

  • They have higher maintenance costs. In the event that a telephone unit does malfunction or any wiring issues occur, you will have to call out a technician to diagnose and repair the problem. For example, a faulty handset is typically $200, at minimum, to replace.
  • They are less scalable. Expanding your phone system to meet the growing needs of your business can be costly, as you must purchase any additional equipment you may need. You also have to pay a professional to come out and install the add-on lines or units.
  • They have higher installation fees. As there is hardware involved, such as handsets, wiring, and main unit, the installation costs for a PBX system is usually much higher than other phone system solutions.
  • They are less portable. It is more difficult to disconnect and reinstall your PBX in another location, as there are wires, cables, boxes, and phone units to consider. To install a PBX system in a new office, for example, business owners must pay a professional to remove all of the system components from the original location, and then reinstall it at the new location. This typically involves extra materials and significant labor costs.
Return to Top

VOIP Systems

A VoIP (voice over internet protocol) phone system relies on an Internet connection rather than a conventional phone line. VoIP solutions typically involve one-time setup fees as well as ongoing monthly subscription costs. One of most significant price factors is the Internet service, as these phone systems require higher connection speeds and greater bandwidth to deliver optimal call quality.

Costs

  • Installation: $4,450 (includes phone, provisioning, power source, and router)
  • Set-up Fees: $650 (covers cable run and Virtual PBX unit configuration)
  • Monthly Maintenance Fees: $600 (on average, cost depends on the provider and add-ons)
  • Total Cost: $5,700 (complete installation and first month’s maintenance fees)
  • Annual Maintenance Total: $7,200 (does not include replacement units)

Main Features

  • Auto-attendant
  • Conferencing Support
  • Computer-Technology Integration (CTI)
  • Voicemail  
  • Call Hold (with music or pre-recorded messages)
  • Intercom
  • Memory dialing
  • Paging
  • Speakerphone

Pros

  • They improve small business service. VoIP systems give smaller businesses and home businesses the opportunity to improve their customer service, without having to spend a sizable sum on on-site solutions. Customer and clients no longer have to deal with busy signals, as the system automatically plays music or a hold message when all employees are occupied.
  • They are easily portable. As long as your office is internet-ready, you can have access to your inbound and outbound calls. The VoIP phone system operates on an Internet connection. Thus, you are able to take it with you should you choose to move offices, without having to worry about missing important business calls.
  • They carry out a wide range of business functions. In many respects, a VoIP phone system is an all-in-one business center. Not only does it serve as a virtual receptionist, but it can also screen all of your calls, host video conferences, and even buzz customer or clients into the office remotely.
  • They offer call routing support. Even if you are not physically at the office, a VoIP system can still redirect all your calls to any device. For example, you can program the system to direct your call to a mobile device if you need to step away from the desk and are expecting an important call.
  • They provide detailed reporting. Due to the fact that VoIP systems are internet-based, they have the power to provide detailed reports for a wide range of business practices. For example, you can receive email reports regarding missed calls or the duration of calls. You can even see how much you pay for each call, as well as how much data you are currently using.

Cons

  • There is a risk of interrupted calls. One of the most significant issues that may arise with VoIP phone systems is interrupted or dropped calls. Since VoIP systems are reliant on the Internet, you must have a high-speed Internet connection to ensure good call quality and consistency. Other devices on the network can also diminish the connection and speed, which makes interrupted calls more likely.
  • They may be vulnerable to viruses. In some instances, a VoIP system may be vulnerable to the same viruses and malware attacks that plague your computer. However, many VoIP service providers now offer protection and encryption measures to safeguard against these issues.
  • They are unable to dial emergency numbers. In many cases, VoIP systems do not allow emergency number dialing, as they are not directly linked to any specific geographical location. Thus, the phone network cannot redirect the call to the appropriate 911 dispatch center. This can be a significant problem if the VoIP service provider does not allow a geographical location feature in the subscription package.
Return to Top

Key Systems

Key (key service unit) phone systems are ideal for businesses with 5 to 40 employees. They typically require wiring, telephones, and a main unit that processes all of the inbound and outbound calls. The PBX box can support multiple phone lines and allows each employee or department to have their own extension.  

Costs

  • Installation: $3,000 (includes telephones and main KSU box)
  • Set-up Fees: $1,700 (covers system wiring and 5 hours of labor costs)
  • Monthly Maintenance Fees: $600 (covers high speed internet and phone service costs)
  • Total Cost: $5,250 (complete installation and first month’s maintenance fees)
  • Annual Maintenance Total: $6,600 (includes digital phone line and high-speed fiber internet)

Main Features

  • Call hold (with music)
  • Intercom
  • Memory dialing
  • Paging
  • Speakerphone
  • Voicemail support

Pros

  • They are typically compatible with existing wiring. Rather than having to install all new wiring, many organizations can save on installation costs by connecting their key system to the existing wiring.  Due to the fact that wiring can be as much as $150 per line, this can result in a savings of around $900.
  • They are user-friendly. Unlike an involved PBX phone system, key systems come with less of a learning curve. All of the features are built directly into the phone’s key pad, which makes it easy to utilize all of the functions. For example, each line within the business is usually associated with a button. Therefore, employees can simply push the button to access their dedicated extension.
  • They are less expensive to repair. Key systems are usually less costly to repair than PBX systems. Replacing a faulty box or telephone is also generally less expensive. This makes them ideally suited for businesses that want most of the features of a PBX system, but do not have room in their budget for high-cost maintenance.

Cons

  • They offer less customization. Key systems are typically less customizable than PBX or VoIP systems, as the KSU box cannot support the same features. As a result, they may not be the best option for businesses that wish to have CTI or conferencing functionality when using their phone systems.
  • They offer limited lines and extensions. Key systems do not allow businesses to have a virtually unlimited number of lines and extensions, as is the case with VoIP. They are also more difficult to scale, should you choose to expand your business and require more lines for additional employees.
Return to Top

KSU-Less Systems

KSU-less systems, as their name suggests, work on the same principle as KSU phone systems, but without the main KSU box. Each phone processes the calls, rather than a traditional central unit. For this very reason, they are typically one of the least expensive phone system solutions, especially for smaller businesses with fewer than 10 employees.

Costs

  • Installation: $1,500 (includes telephone units)
  • Set-up Fees: $1,700 (covers system wiring and 5 hours of labor costs)
  • Monthly Maintenance Fees: $200 (basic telephone service)
  • Total Cost: $3,400 (complete installation and first month’s maintenance fees)
  • Annual Maintenance Total: $1,200 (does not include replacement phone units)

Main Features

  • Call hold (with music)
  • Intercom
  • Memory dialing
  • Paging
  • Speakerphone
  • Voicemail Support

Pros

  • They are easier and less costly to install. The KSU-less systems do not require an involved main unit installation or cable runs. If the building already has wiring, you can simply plug the phone units into the jacks to establish a connection.  
  • They are portable. KSU-less systems can simply be unplugged from the phone jack and electrical outlets, and then be transported to another office location. This makes it ideal for businesses that plan on moving in the near future, as the phone system can easily be transported and installed.
  • They have lower upkeep costs. Since there are fewer components within the system and it does not require high-speed Internet access, KSU-less solutions are usually less expensive to maintain on a monthly basis.  If you do need to replace any components, the units themselves are also usually less costly.

Cons

  • They have a decreased line capacity. A single KSU-less system can only support a limited number of lines and phones. As such, larger companies may have to purchase several units in order to scale up the system, which makes the solution less cost effective. It also typically offers fewer features than the other phone system types.
  • They typically require self-installation. Many phone installation companies do not offer services for KSU-less systems, as the setup process is relatively simple and straightforward. This may be problematic for businesses who do not have dedicated IT or communication staff members, especially if there are extenuating circumstances that make the installation process more challenging, such as wiring issues.
  • They are difficult to integrate with other devices. It may be difficult to network KSU-less phone systems with other devices, such as modems and fax machines, as well as phones that may feature non-traditional features.
Return to Top

Conclusion

Choosing the ideal business phone system involves an in-depth analysis, which will help you determine how many lines are necessary and which system types offers the features your organization needs. Budget is also a key factor in the decision-making process, as well as the current infrastructure of your communication system. For example, a PBX or key system may be the best solution for businesses that cannot receive high-speed Internet access due to geographical limitations.

Return to Top
Was this page helpful?

Was this page helpful?

How could this page be more helpful?


Share your cost experience

Help others plan and budget for their projects

How do we get this data?

  1. Homeowners visit HomeAdvisor.com to find a top-rated pro to complete their home improvement project or repair.

  2. Once their projects are completed, the members log in to their accounts and complete a short cost survey.

  3. After compiling and organizing the data, we report it back to you.