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Hosted PBX Pricing

  • One of the most significant differences between a traditional "premise-based" PBX system and a hosted PBX service is the pricing model. Standard PBX systems involve a significant up-front purchase – at least $5,000 for a full-featured system for even the smallest offices, and easily $10,000 to $25,000 for 20 to 40 person offices. And after the initial purchase, annual maintenance contracts and service calls add quite a bit to your total costs.
  • Hosted PBX services are almost universally priced per extension, per month. The typical price point for an all-in-one hosted PBX service is between $30 and $50 per full-featured, unlimited calling extension. This may seem like a lot when compared to just your ongoing maintenance costs for an on-site PBX, but keep in mind that it also replaces your local and long distance bills.
  • Many providers will also offer lower-priced, limited extensions. Some of these lower tiers limit the amount of calls you can make or charge a metered rate of a few cents a minute. Others have a subset of features or are voicemail only.
  • Other add-on services carry their own monthly fees. Conference bridges, call-center features, call groups or queues, and toll-free numbers will all add to your total monthly bill. You'll probably find, though, that your total monthly telecommunication costs are lower with a hosted PBX than they were with an on-site solution.
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Cost savings summary:
  • No large initial capital expense
  • Long-distance and local calling charges reduced or eliminated
  • MAC and service call charges eliminated
  • Intra-office calling charges eliminated
  • 5 to 7 year replacement costs eliminated
  • Software upgrade charges eliminated

Depending on the infrastructure you have in place and the phones you want to use, you'll face an installation fee that can range from a token $50 or $100 up to $500 or $1,000 if you need to add a basic router and network switch. The biggest variable in installation pricing is the cost of the phones themselves: you may be able to use existing phones, but iif you have to upgrade, you'll add a cost of $100 to $200 per extension.

Contract terms vary among providers. Some offer nothing more than a month to month agreement, trusting that you'll be satisfied with the service. Others ask for longer contracts to create more stable relationships, and may offer discounted rates for agreements of 2 years or more.

A final advantage of hosted PBX services is that with their overall capacity, adding new users is as simple as a phone call or email. You're not limited by the 24 ports on a physical PBX router, so there's no additional equipment investment when you add that 25th extension: in fact, you're more likely to get price breaks as you add users than to hit tiers that increase your overall costs.

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