What does a small business phone system cost in 2020: A breakdown of plans and prices

Updated: Feb 20, 2020

Every day, business owners contact us and ask – what is the cost for a business phone system?

If you’re searching for a new business phone system or just a better way to handle business calls, it can be confusing to compare quotes and prices. You may not truly understand what you're buying, or what other options are available.

For a start, a phone system is different from a phone line because it allows you to control when, how and on which device calls reach you.

Do you work alone, or in a team? Business phone systems typically connect teams of 2 - 50 while business phone apps are ideal for sole traders and home office workers.

At Connexus we make it easy to understand the different phone system types, the phone system features that you need, and the likely cost in Australian dollars. We've put this together in a handy comparison chart below:


Part 1. What type of phone systems are available - and which type is best for your business?


Whether you’re looking for your first small business phone system or replacing an existing phone system, you have three broad options – each with a different relative cost. So your first decision will have to be: what type of phone system do I need?

Mobile & solo workers: Cloud communications app

Are you one of the 1.4 Million sole traders or freelancers in Australia? You probably already know the struggles of running a business from your mobile. Such as:

  • Missing important customer calls because you can’t tell if they’re business or personal

  • Being judged as small and unprofessional because you don’t have a landline

  • Risking your privacy by giving out your personal number

  • Getting work calls at inconvenient times: after hours or during holidays

A cloud communications app is a business phone system on your mobile. It can address the pain points that come with using your personal mobile to manage work calls.

With a phone system app on your mobile, you can make and receive work calls using a virtual business number. It’s a business line on your mobile, without the need for an old-fashioned phone line.

The business number rings on your app when you receive calls, so you always know when people are calling your business. Plus, the business number shows in caller ID when you call out from the app, maintaining your professional image and protecting your privacy.

An app is the most affordable option for a business phone system or business phone line replacement. It keeps costs low because you can use your existing mobile, and you don't pay for bells and whistles you won't need as a sole trader.

Sole trader & freelancer features include:

  • Professional business phone number and voicemail box

  • Voicemail to Email, automatically sending customer messages to your email

  • A robo receptionist to direct calls when you can’t get to the phone

Ballpark price

For all this you should expect to pay between $15 - $35 ‘per month, per user’ depending on the calls and features that are included. At Connexus we recommend this option to sole traders, startups, freelancers and local shops that only need a single business phone line.


Desk-based workers & teams: Cloud phone system

If you require a desk phone / cordless phones or need more than one person on the phone the best option is a cloud phone system.

A cloud phone system (also known as a Hosted Phone or Virtual PBX) is a software 'brain' that controls when and how calls come into and out of your business. Cloud phone systems work using business VoIP rather than traditional phone lines.

This option is designed for small businesses where several people need to use the phone at the same time. It connects multiple phone numbers, extensions, devices and phone lines so that calls can be quickly routed to the right person or team. It will also include phone system features for teams that enable multiple users to work together.

Team productivity features include:

  • Transfer / hold / park and pickup calls

  • Ring a group of people at once, or one after the other

  • Queue callers in the order they come in

  • See if other lines are busy (ideal for receptionists and EAs)

  • Record phone call audio

Ballpark price

Expect to pay $30 - $60 per user, per month. Cloud phone systems are more expensive than an app because of the additional handset costs and the inclusion of team features.

Who is it best for?

We typically recommend a cloud phone system for office-based teams between 2 – 50 staff. This option is usually chosen by businesses that have a receptionist or front of house, such as lawyers, accountants, hotels and medical centers.


Call centres: On-premise PBX

If you’re familiar with phone systems, you’re probably used to the old on-premise systems where a physical box (called a Private Branch Exchange or ‘PBX’ for short) was installed in your office and connected to handsets and phone lines. While on-premise phone systems still exist, these days ISDN and copper phone lines have disappeared, and on-premise PBXs use SIP Trunks (a kind of business VoIP) to enable calling.

Ballpark price

As a small business, you can expect to pay $5000 - $10,000 to buy a VoIP capable PBX phone system, plus $200 - $400 to buy each handset, plus the ongoing cost of: configuration, maintenance, security patches and a SIP Trunking plan.

Refurbished PBXs can be a cheaper option ($500 - $3000). However, we recommend you do not purchase a refurbished phone system because it's age may mean that it uses old-fashioned phone lines, rather than VoIP for calling. Any savings you've made will disappear very quickly. When the NBN is connected in your area all phones will use VoIP for calling so you'll be forced to buy a whole new NBN-ready phone system.

Why choose an on-premise PBX?

Compared to cloud phone systems, on-premise VoIP phone systems are a tough sell for small business because of their high upfront costs and technical complexity. However, if you have a local IT company that can configure and manage it for you, and they offer a payment plan, the business case may stack up.

Despite the high costs, some businesses choose an on-premise phone system because it allows them to control the location, configuration and maintenance. Another advantage is that your phone system is separate from your telco provider – making it easier to change telcos and get a better deal in the future.

On-premise systems are usually considered overkill for a small or local business. Today they are most common in call centres where they get maximum value from the features because they have such high call volumes. Also, call centres have a dedicated IT team who can take care of PBX maintenance and patches - so there is no technical burden.

If you are planning to upgrade your on-premise PBX, we recommend considering a cloud-based phone system for the cost efficiency and ease of use.


Part 2. Phone system cost comparison – Getting value for your money


Now you understand what type of phone solution you’ll get – app, cloud or on-premise - you can breakdown and compare different phone system quotes.

In Australia, the company quoting your new phone system must (legally) provide you with a Critical Information Summary document (CIS). The CIS sets out all the potential calling plan fees and charges, making it easier to compare apples-with-apples.

How phone systems are priced

It also helps to understand how phone systems are priced. Some elements are charged upfront, while others are based on usage, and others are included in the 'per user, per month' plan cost. We've provided a quick reference chart below:

1. Plan charge (per user, per month)

This covers the fixed cost you’ll be billed regardless of whether you use the service. The plan charge covers the cost of providing your business phone system, including:

  • Phone number(s) and voicemail for each user

  • Technical support and customer service

  • Maintaining phone service quality, security and reliability

Plan inclusions will vary by provider. At Connexus we also include unlimited Australian calls, unlimited business features, number porting and an app or desk phone (depending on the chosen plan).

2. Usage / call charges

PAYG plans

Generally, very cheap monthly plans will not include calls. You will pay for the calls you make, based on the provider’s rates. If you only receive inbound calls, and never make outbound calls, this pay-as-you-go phone system can be a cheap option.

Plans with unlimited calls

We recommend that if you make more than 10 calls in a month, you choose a plan with an unlimited call inclusion, as this will be the best value. This gives you peace of mind with a fixed cost phone bill each month.

Not all unlimited call plans are the same. Make sure your plan includes calls to Australian mobiles and 13/1300 numbers (like banks and customer support lines). Chances are, you will call these numbers more than you think. And the costs quickly start to add up.

3. Number porting

Number porting is the process of moving your phone and fax numbers from one phone provider to another, such as from Telstra to Connexus. It means you can keep the same business numbers when you move from an old provider to a new one.

The problem is, number porting can be expensive. A single number can cost $30 - $50 to port out. Since most businesses have more than one number, you’re potentially looking at hundreds of dollars in upfront charges.

A few selected providers, like Connexus, offer free business number porting. If you want to save money, choose a provider that offers free or low-cost number porting.

4. Business (PBX) features

Phone system features can vary based on your chosen plan and provider. A low-cost phone system for a small business will have different features than a phone system for a corporate office. So it's essential to know what features will matter for your business.

Essential features

If you’re a sole trader or just want a no-frills office phone service, look for a plan that includes the must-have phone system features:

  • Robo Receptionist where callers are directed by a menu prompt (Press 1 for Sales etc)

  • Voicemail to Email which automatically sends customer messages to your email

  • After Hours Switch which changes the experience for callers who call when you're closed after hours or on weekends

A basic business phone line or mobile service will not include these features.

Features for handling high call volume

If you're handling lots of calls, you’ll need features that ensure customers can easily reach the right person or department. Look for a plan that includes:

  • Ring Groups where an incoming call will ring multiple people at once, or in a sequence

  • Call Queues where callers wait on hold in the order they came in - until the line is free

Connexus provides unlimited Ring Groups and Call Queues. However, some providers may charge extra 'per Group' or 'per Queue'. So if you need multiple Ring Groups or Call Queues your monthly costs can unexpectedly increase.

Business fax

At Connexus, we’ve taken the approach that business fax is important but shouldn’t be an extra cost. So we include inbound virtual faxing with our cloud phone system.

This means you can keep your existing fax number without needing a fax line. You're able to receive business fax in your email (no sending, sorry) but won’t pay an extra monthly charge. It’s a simple and cost-effective solution for most small business.

5. Desk phones and apps

Devices and hardware are the final factor in your phone system quote. You will be able to choose desktop or cordless phones, mobile apps and computer softphones.

For maximum bang for buck, we recommend purchasing your desk phones or cordless phones outright. This means you own the device from day one – and if it lasts you more than the contract length then you’re ahead.


Checklist – Easily compare phone system prices and quotes


The cost of a small business phone system depends upon the type of system (app, cloud or on-premise), the included features, calling plan and the number of users. You should also be aware of the additional cost to port existing phone numbers from your current provider.

Here is a quick checklist of things to look for when comparing business phone systems:

  • No setup fee (or less than $150)

  • No number porting charge

  • Unlimited Australian calls (inc. 13/1300 numbers and mobile)

  • Mobile app included

  • Desk or cordless phone included

  • Essential business features included

  • Team productivity features included (if you have multiple users)

  • No caps on the number of Line Hunts / Ring Groups and Call Queues

  • Fax included

If you are willing to shop around you should be able to find an affordable phone system that fits your business requirements.