Budgeting for a business phone system in 2026 depends on three things: your team size, the type of system you choose, and which features you need. This guide gives you real UK pricing for every option — from a simple two-line VoIP setup to a 100-extension cloud phone system — so you can budget accurately before speaking to any provider.
Quick Pricing Summary
| System Type | Per-User/Month | Setup Cost | 10-Person Annual | Best For |
|---|---|---|---|---|
| Hosted VoIP | £6-15 | Free-£200 | £720-1,800 | SMEs, remote teams |
| SIP Trunking | £3-8/channel | Free-£500 | £360-960 | Existing PBX owners |
| Cloud PBX | £10-25 | £200-1,000 | £1,200-3,000 | Growing businesses |
| On-Premise PBX | N/A (capex) | £2,000-15,000 | £200-500 maintenance | Large enterprises |
| UCaaS | £12-30 | Free-£500 | £1,440-3,600 | Hybrid/remote workforces |
Hosted VoIP Pricing in Detail
Hosted VoIP is the most popular choice for UK SMEs in 2026. Here’s the full cost breakdown:
Monthly Costs
- Basic plan (calls + voicemail): £6-8/user/month
- Standard plan (+ auto-attendant, call groups): £8-12/user/month
- Premium plan (+ call recording, CRM integration, analytics): £12-20/user/month
- Enterprise (+ contact centre, omnichannel): £20-35/user/month
One-Off Costs
- IP desk phones: £50-200 per handset (Yealink T33G at £65 is the most popular). Many providers offer rental at £3-5/month or include phones free on 24-month contracts.
- Headsets: £30-150 per headset for call centre or desk-based teams.
- Number porting: Usually free. Some providers charge £5-10 per number.
- Configuration/training: Free with most providers. Complex setups (100+ extensions, multiple sites) may incur a one-off fee of £200-500.
Example: 10-Person Business on Hosted VoIP
| Item | Cost |
|---|---|
| 10 user licences @ £8/mo | £80/month |
| 6 desk phones @ £65 (4 staff use softphones) | £390 one-off |
| Number porting (3 numbers) | Free |
| Setup and configuration | Free |
| Year 1 total | £1,350 |
| Year 2+ total | £960/year |
Compare this to a traditional PBX system for the same business: £3,000-5,000 upfront for the hardware, plus £150-250/month for ISDN lines and maintenance. Over 3 years, hosted VoIP saves £4,000-8,000.
SIP Trunking Pricing
If you have an existing on-premise PBX (Avaya, Mitel, Panasonic, etc.), SIP trunking replaces expensive ISDN lines with internet-based channels at a fraction of the cost.
- Per channel: £3-8/month (each channel supports one concurrent call)
- Call rates: UK landline 0.5-1p/min, UK mobile 1-3p/min
- Setup: Free-£500 depending on PBX compatibility
A business currently paying £400/month for 10 ISDN channels would typically pay £80-120/month for equivalent SIP trunk capacity — a 70-80% saving.
On-Premise PBX Pricing
Traditional on-premise PBX systems (a physical box in your server room) are being replaced by cloud solutions, but they’re still available for businesses that prefer to own their equipment outright.
- Hardware (new): £2,000-15,000 depending on capacity
- Installation: £500-2,000
- Annual maintenance contract: £200-500/year
- Expected lifespan: 7-10 years
The total cost of ownership over 5 years for a 20-user on-premise PBX is roughly £8,000-20,000. The equivalent hosted VoIP setup costs £7,200-18,000 — comparable, but with none of the hardware risk, maintenance burden, or technology obsolescence.
UCaaS Pricing (Unified Communications)
UCaaS platforms like RingCentral, 8×8 and Microsoft Teams Phone combine voice, video, messaging and collaboration into a single per-user subscription. Learn more in our UCaaS guide.
- Basic (voice + messaging): £12-15/user/month
- Standard (+ video, file sharing): £15-22/user/month
- Premium (+ contact centre, analytics): £22-35/user/month
Hidden Costs to Watch For
1. Out-of-bundle call charges
“Unlimited calls” rarely means unlimited everything. Check the fair usage policy and international call rates before signing up.
2. Handset rental lock-in
Some providers offer “free” phones that are actually on a 36-60 month rental agreement. If you leave early, you pay the remaining rental. Always check the handset terms.
3. Early termination fees
Breaking a 24-month contract early typically costs the remaining months’ fees in full. Negotiate a shorter contract if there’s any chance you’ll need to switch.
4. Price escalation clauses
Many providers include annual price increases linked to CPI or RPI (typically 3-5% per year). Ask for a fixed-price contract or negotiate a cap on increases.
5. Add-on feature costs
Call recording, call analytics, call queuing and CRM integration are included on some plans but charged extra on others. Calculate the total cost including every feature you need.
How to Reduce Your Phone System Costs
- Use softphones where possible: Every staff member who uses a softphone (app on their computer/mobile) instead of a desk phone saves you £50-200 in hardware.
- Right-size your plan: Don’t buy premium features you won’t use. Start with a basic plan and upgrade as needed.
- Pay annually: Most providers offer 10-20% discounts for annual billing vs monthly.
- Bundle services: Combining phone and broadband with the same provider typically saves 15-25%.
- Use a broker: Brokers like Connection Technologies negotiate bulk pricing across multiple providers. The service is free to you.
Pricing by Industry
Professional Services (Law, Accountancy, Consulting)
Needs: call recording, detailed call logs for client billing, conference calling, professional auto-attendant. Budget per user: £10-18/month. Total for a 15-person firm: £150-270/month.
Retail (Single or Multi-Site)
Needs: multi-site call routing, hold music, opening hours messaging, basic call queuing. Budget per site: £40-80/month. A chain of 5 shops: £200-400/month total.
Construction and Trades
Needs: mobile integration (workers on-site), voicemail-to-email, simple setup. Budget per user: £6-10/month. A 10-person building firm: £60-100/month.
Healthcare
Needs: call queuing (essential for GP practices), HSCN/N3 compliance, call recording for clinical purposes. Budget per user: £12-20/month. A GP practice with 8 phone users: £96-160/month.
Sales Teams and Call Centres
Needs: power dialer, call analytics, CRM integration, wallboard/supervisor tools. Budget per agent: £20-35/month. A 20-agent sales floor: £400-700/month. This is where UCaaS platforms like RingCentral and 8×8 excel.
Total Cost of Ownership: 3-Year Comparison
The true cost of a phone system includes not just the monthly fees but hardware, maintenance, upgrades and eventual replacement. Here’s a 3-year TCO comparison for a 10-person business:
| Cost Category | Hosted VoIP | On-Premise PBX | Microsoft Teams Phone |
|---|---|---|---|
| Hardware | £650 (phones) | £4,000 (PBX + phones) | £0 (softphone only) |
| Installation | £0 | £1,000 | £0 |
| Monthly service (36 months) | £2,880 | £1,800 (maintenance) | £4,752 |
| Line rental (if applicable) | £0 (included) | £2,160 (ISDN) | £0 (included) |
| Call charges | £0 (included) | £1,800 | £0 (included) |
| 3-Year Total | £3,530 | £10,760 | £4,752 |
| Cost per user/month | £9.81 | £29.89 | £13.20 |
Hosted VoIP wins on TCO by a significant margin. On-premise PBX is the most expensive option once you factor in hardware depreciation, ISDN line rental and call charges. Teams Phone falls between the two but lacks many features (like call recording and advanced IVR) that are included in standalone VoIP plans.
When to Invest More vs When to Save
Invest More If…
- Your phone is your primary sales channel. If inbound calls generate a significant portion of revenue, call analytics, CRM integration and call recording will directly increase conversion rates. The ROI on a £15/user premium plan vs a £6/user basic plan is measured in weeks, not months.
- You have remote or hybrid workers. Softphone apps, video conferencing and presence indicators keep distributed teams connected. A UCaaS platform at £15-25/user replaces separate VoIP, video and messaging subscriptions.
- You’re in a regulated industry. Financial services, legal and healthcare businesses need call recording, audit trails and compliance features. Paying extra for these features is non-negotiable.
Save If…
- Your phone usage is low. If you mainly communicate by email and only take 5-10 calls a day, a basic £6/user plan with softphones is all you need.
- You’re a startup with a tight budget. Start with the cheapest plan and upgrade as revenue grows. Most providers let you change plan mid-contract.
- Your team is small and co-located. A single shared phone line with a virtual number (£5-10/month) may be sufficient for a 2-3 person office.
Negotiating Better Phone System Pricing
Get Multiple Quotes
Never accept the first price. Get quotes from at least 3 providers. A telecoms broker like Connection Technologies does this for free and has access to partner pricing that’s often 10-30% below retail rates.
Negotiate at Contract Renewal
Providers know it’s cheaper to retain a customer than acquire a new one. At renewal time, call to negotiate. Quote a competitor’s price and ask them to match or beat it. Most will offer a 10-20% loyalty discount rather than lose you.
Ask About Volume Discounts
Pricing per user drops significantly at 10, 25, 50 and 100 user thresholds. If you’re close to a tier boundary, ask if adding one more user would drop the per-user price for everyone.
Consider Annual Billing
Paying annually instead of monthly saves 10-20% with most providers. If cash flow allows, this is the easiest way to reduce your total cost.
Frequently Asked Questions
What’s the cheapest business phone system?
A basic hosted VoIP plan from Connection Technologies starts at £6/user/month. For a sole trader, that’s £72/year for a full professional phone system with voicemail, auto-attendant and a softphone app.
Is a business phone system tax deductible?
Yes. Business phone system costs (monthly subscriptions, hardware, installation) are fully deductible as a business expense, reducing your corporation tax or self-assessment bill.
Do I need a phone system if I use Microsoft Teams?
Teams is excellent for internal video calls and messaging, but making and receiving external phone calls requires either Teams Phone (£7.20/user/month add-on plus a calling plan) or integration with a VoIP provider via Direct Routing. Many businesses find a standalone VoIP system simpler and cheaper.
Can I try a phone system before committing?
Most hosted VoIP providers offer a 14-30 day free trial. Connection Technologies offers a full trial with no credit card required — request one through our quote form.
How much does it cost to add a new user?
On hosted VoIP: the monthly per-user fee (£6-15) plus a desk phone if needed (£50-200 or £3-5/month rental). No engineer visit, no installation fee, no waiting — the new extension is live in minutes.
Get an Accurate Quote for Your Business
Every business is different. The fastest way to get accurate pricing is to tell us your team size, current setup, and the features you need. We’ll compare options from 20+ UK providers and send you a tailored quote within 24 hours — completely free.
Get Your Free Phone System Quote →
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