If you're thinking about switching your business phone system to VoIP, the first question is almost always the same: how much will it actually cost? The honest answer is that it depends — but not on complicated variables. VoIP pricing for small businesses is quite straightforward once you understand the three components: the monthly line cost, the hardware (if any), and the calls.
This guide breaks down the real numbers so you can budget accurately — and understand why switching from a traditional phone system almost always saves money.
What Is VoIP and Why Are Small Businesses Switching?
VoIP (Voice over Internet Protocol) means making and receiving phone calls over your internet connection rather than a traditional phone line. Instead of paying BT or another provider for physical PSTN or ISDN lines, your calls run through your broadband — which you're already paying for.
The switch to VoIP is no longer optional for most businesses. BT completed the UK PSTN and ISDN switch-off programme, meaning traditional phone lines are being retired and replaced with digital alternatives. If your business still relies on an old ISDN system, you will need to move to VoIP — the question is just when and how.
Beyond the switch-off, VoIP offers genuine advantages: lower monthly costs, features that would have cost thousands on a traditional PBX (call recording, hunt groups, auto-attendant, voicemail to email), and the flexibility to make and receive calls from anywhere — laptop, desktop app, or mobile.
The Three VoIP Cost Components
1. Monthly line (seat) cost
VoIP is typically priced per user per month — often called a "seat" or "extension." In the UK, business VoIP seat costs generally range from £5 to £25 per user per month depending on the provider and what's included.
At the lower end (£5–£10/user), you typically get a basic cloud phone number with limited features. At the mid range (£12–£20/user) — which covers most small businesses — you get a full feature set: auto-attendant, hunt groups, call recording, voicemail to email, and app access so staff can take calls on their laptops or phones. The higher end tends to be larger enterprise systems with CRM integration and advanced analytics.
For a small business with 5 users on a well-specified mid-range plan, you're typically looking at £60–£100 per month in line costs.
2. Call costs
Most business VoIP plans include a bundle of minutes for UK calls — often unlimited UK landline and mobile calls within the monthly seat cost. International calls and premium numbers are typically charged separately, usually at a per-minute rate that's significantly lower than traditional phone tariffs.
If your team makes a lot of outbound calls, it's worth checking whether the plan you're looking at includes unlimited UK calls or whether there's a per-minute charge. For most small businesses, an all-inclusive plan with unlimited UK calls is the right choice — it removes bill variability and makes costs easy to predict.
3. Hardware
This is where costs vary most widely, because VoIP hardware is optional. You have three approaches:
- Software only (softphone). Your team uses an app on their laptop, desktop, or mobile to make and receive calls. Zero hardware cost. This works well for remote or hybrid teams, or for businesses where staff are rarely at a fixed desk.
- VoIP desk phones. Physical handsets that plug into your network and look and feel like traditional phones. These typically cost £50–£150 per handset for a decent business phone, or can be rented through your provider at a small monthly fee per handset.
- Hybrid. Some staff have desk phones, others use softphone apps. Very common in businesses where receptionists or customer-facing roles need a physical handset, but field or remote staff use apps.
If your team is already working in Microsoft Teams or a similar platform, there's a good chance you can make and receive business calls directly within Teams — no separate app or handset needed. Worth asking about when you're getting quotes.
What Does VoIP Cost in Total? Real Examples
| Business size | Setup | Monthly cost (est.) | Notes |
|---|---|---|---|
| Sole trader / 1–2 users | Softphone only | £10–£20/month | One number, app on laptop/mobile, unlimited UK calls |
| Small team (3–5 users) | Softphones or desk phones | £40–£80/month | Hunt groups, voicemail to email, auto-attendant included |
| Growing business (6–15 users) | Mix of desk phones and apps | £80–£200/month | Full feature set, call recording, multiple DDI numbers |
| One-off setup / porting | Number porting | £0–£50 one-off | Keeping your existing number — usually free or low cost |
VoIP vs Traditional Phone Lines: The Cost Comparison
A traditional ISDN2 line with two channels typically costs around £40–£60 per month before call charges. An ISDN30 setup for a larger office can run to several hundred pounds per month in line rental alone — and that's before adding a PBX system that costs thousands to buy and maintain.
VoIP eliminates the line rental cost entirely and replaces the PBX with a cloud-hosted system that's included in your monthly seat price. For most small businesses, switching to VoIP cuts their phone bill by 40–60% — while giving them significantly better features and flexibility.
The savings are even clearer if you're currently paying for multiple physical lines. With VoIP, you can have dozens of simultaneous calls over a single broadband connection. There's no "engaged tone" because all the lines are in use — the system handles queuing, call forwarding, and overflow automatically.
What About Broadband — Do I Need to Upgrade?
VoIP calls use very little bandwidth — roughly 100kbps per concurrent call. A standard business broadband connection with 50Mbps or more downstream will handle 10+ simultaneous calls without any noticeable impact on the rest of your internet usage.
Where broadband quality matters more is latency and jitter (the consistency of your connection) rather than raw speed. An unstable connection causes call quality issues — choppy audio, dropped calls — more often than a slow one does. If you're having VoIP call quality issues, the fix is usually improving the quality or stability of your business broadband rather than upgrading the VoIP system itself.
For businesses where call quality is genuinely business-critical, a dedicated leased line — which gives you a symmetric, uncontended connection — is worth considering. The cost has come down significantly in recent years and it eliminates call quality concerns entirely.
Hidden Costs to Watch For
- Per-minute charges on calls you assumed were included. Check whether "unlimited UK calls" includes mobile numbers — some plans only cover landlines.
- Setup or porting fees. Reputable providers charge little or nothing to port your existing number, but some charge £50–£100 per number.
- Contract length penalties. VoIP is typically month-to-month or on short 12-month terms — avoid providers pushing 36-month lock-ins for a cloud service.
- Hardware costs if you buy outright. If you purchase desk phones, factor in £50–£150 per handset. Renting from your provider avoids the upfront cost but adds to the monthly fee.
- Support costs. Some providers offer the system cheap but charge separately for support. Ask upfront what happens when something goes wrong and who you call.
Is VoIP Right for My Small Business?
The short answer: yes, for almost every business. VoIP is cheaper than traditional lines, more flexible, and better featured. The only scenario where it might not be appropriate is a business in a location with genuinely poor broadband quality and no alternative — though 4G/5G connectivity usually solves that problem.
If you're still on a traditional phone system, on an old ISDN contract, or simply paying more than you should for your business calls, it's worth getting a quote. Most businesses are surprised by how straightforward the switch is and how quickly the savings add up.
At IT ME Services, we supply and manage VoIP phone systems for businesses across the UK — including in Peterborough, Norwich, London, and Birmingham — including number porting, handset setup, and ongoing support. We also manage business broadband and IT support as a single service, so there's one number to call for everything. Give us a call for a no-obligation quote — we'll give you honest numbers based on your actual usage.