Buying a business phone system isn't just about picking a service provider—you'll need to budget for hardware that powers the whole setup. Whether you're switching from legacy PBX to VoIP or expanding your current system, understanding what physical equipment costs will help you avoid sticker shock and make a smarter investment.
What Hardware Actually Powers Your System
A business phone system requires more than a monthly subscription. You're looking at desk phones, a network switch or router, possibly a VoIP gateway, cabling infrastructure, and often a server or cloud appliance to manage calls. Each component carries its own price tag, and they add up quickly depending on your company size and call complexity.
The good news: you don't need to buy everything at once, and many providers offer bundled deals or financing options that spread costs over time.
Desk Phones: The Main Hardware Expense
Entry-level IP desk phones run $60–$150 per unit. These are basic handsets suitable for most office workers who need a standard phone plus features like call transfer and hold.
Mid-range phones with larger color screens, better audio quality, and programmable buttons cost $150–$300 each. You'll find brands like Cisco, Yealink, Polycom, and Grandstream in this range, offering solid reliability for busy receptionists, sales teams, or managers.
Premium phones with video calling, advanced softphone integration, or high-end audio engineering land between $300–$600 per unit. A 20-person office using mid-range phones typically budgets $3,000–$6,000 just for handsets.
Budget-friendly alternative: Some teams skip desk phones entirely and use softphones (apps on computers or mobile devices) instead, cutting hardware costs to nearly zero—though you'll sacrifice desk phone durability and sometimes audio quality.
Network Infrastructure Costs
Your existing network might handle VoIP, or you might need upgrades. Here's what to consider:
- Ethernet cabling and installation: If you're running new cabling to desk phones, expect $100–$300 per location for materials and labor, depending on distances and complexity.
- Network switches and routers: A business-grade switch capable of supporting VoIP traffic for 20+ phones costs $400–$1,500. Your current equipment might work, but older consumer-grade routers often lack Quality of Service (QoS) features that prioritize call quality.
- Power over Ethernet (PoE) capability: Many IP phones draw power directly from the network cable, eliminating need for separate power supplies. Most modern business switches support PoE, but check your specs.
VoIP Gateways and On-Premise Hardware
If you're keeping some legacy analog phone lines or fax machines, you'll need a VoIP gateway to bridge them to your new system. These devices cost $500–$2,500 depending on how many analog lines you're converting.
On-premise phone systems (where a physical server sits in your office managing all calls) run $3,000–$15,000 upfront, plus ongoing maintenance costs. Cloud-based systems eliminate this entirely, shifting costs to monthly subscriptions instead—often a smarter choice for small to mid-size businesses.
Headsets and Additional Accessories
Don't forget supporting gear:
- Basic corded headsets: $40–$100
- Wireless headsets with DECT or Bluetooth: $100–$300
- Conference room speakerphones: $150–$600
- Phone stand risers, cable management, charging stations: $20–$100 per station
A 15-person office might spend $2,000–$4,000 on headsets and accessories alone.
Total Hardware Budget Breakdown
For a typical 20-person business switching to VoIP:
| Item | Cost Range | |------|-----------| | 20 desk phones (mid-range) | $3,000–$6,000 | | Network upgrades (switch, cabling) | $1,500–$3,000 | | VoIP gateway (if needed) | $500–$2,500 | | Headsets (15 units) | $2,000–$3,000 | | Miscellaneous accessories | $300–$500 | | Total | $7,300–$15,000 |
Cloud-based systems skip the gateway and on-premise server costs, bringing totals toward the lower end.
How to Reduce Costs
Spread purchases over 2–3 years instead of buying everything upfront. Negotiate bulk pricing with vendors for phone quantities over 10 units. Reuse existing network infrastructure if it meets QoS standards. Consider certified refurbished phones (often 30–40% cheaper) if budget is tight—they carry the same warranty as new units.
When comparing providers, use a platform like Mercoly to review bundled pricing: some vendors include hardware discounts if you commit to longer service contracts, while others charge retail price but offer monthly financing.
Frequently Asked Questions
Q: Do I have to buy phones upfront, or can I lease them? Many providers offer lease or equipment rental programs where you pay $15–$40 monthly per phone instead of buying, making budgeting more predictable, though you'll spend more long-term.
Q: What happens to my old PBX system when I switch? You can sell it used (typically 10–30% of original cost), recycle it responsibly, or keep it as backup—most providers don't require you to remove existing equipment.
Q: Is cloud-based VoIP really cheaper than buying on-premise hardware? Yes, for most businesses under 50 employees; cloud systems eliminate $3,000–$15,000 in upfront hardware costs and shift to predictable monthly fees instead.
Start by comparing what providers include with their service plans—equipment bundling varies widely, and smart shopping can save thousands.