• Canada VoIP
  • UK VoIP
  • Australia
Norton trust seal
BBB logo

Hosted VoIP

This article highlights why a small business should consider switching to a hosted VoIP phone service solution using a real life example cost comparison between a regular telephone line set up and a VoIP solution.

Hosted VoIP

Why does every Business need it?

Before we dive in and start explaining hosted VoIP and how great it is, let's take a look at some broadband statistics in the U.S.A., since a high speed Internet connection is a primary requirement to use a hosted VoIP solution. A recent 2012 report by the Leichtman Research Group estimated that almost 90% of households in the United States had access to a high speed Internet connection. As such, access to high speed broadband is rarely an issue for the majority of consumers and businesses.

Actually getting connected to the internet can cost anywhere from $20 per month upwards depending on the level of service that you need. So any individual or small business can get some internet connectivity for a very low monthly fee. For larger businesses this cost will obviously increase as they need to move away from a DSL or Cable connection to a T1, T3, Fiber or Ethernet connection to the internet. For the purpose of this discussion, let's assume that a small business can get really good internet connection for $25 per month.

Now let's assume that your business has some form of interaction with customers and they need to wait while you perform a service. This could be anything from a small doctor's office to an oil change facility. Because there is regular customer interaction, there is likely a very frequent need to make and receive phone calls. If we assume that you currently use a regular old telephone line that does not send voice over the internet, then some prices that we have found (AT&T Bellsouth - Oct. 2012) are as follows:

  • $21.00 - Unlimited local calling (with no additional calling features)
  • $24.00 - Unlimited local calling (with 2 additional calling features)
  • $28.00 - Unlimited local calling (with 13 additional calling features)
  • $42.00 - Unlimited nationwide calling (with 13 additional calling features)

Note: Additional features include caller-id, call waiting, etc.

Now let's assume that your small business has 2 phone lines and you need to make calls to any area code nationwide, as this is highly likely in this digital age where people in any location can choose any area code for their phone number.

So to summarize, here is the best case monthly cost and features:

  • 2 phone lines
  • Unlimited nationwide calling
  • Only 13 features included
  • Cost is $42.00 per month per phone line before taxes and other fees.
  • Total Cost is $84.00 per month before taxes and other fees.

Now let's compare what can be had with a hosted VoIP service and explain why every business needs it. We will of course add the additional cost of the internet connection as it is a requirement for a hosted service to function as this is after all, voice over the internet.

  • 2 phone lines
  • Unlimited Nationwide calling
  • Almost every feature you can imagine included
  • Internet access fee of $25 per month (Additional cost if no existing internet)
  • Cost is $19.95 per month per phone line if selecting Nextiva as a provider
  • Total Phone Cost is $39.98 per month before taxes and other fees.

So with a hosted VoIP phone service, a small business can actually save money every month even with the additional cost of the internet service. Even if the business owner does not think the business will ever need an internet connection for any other reason, it could be a nice free service to offer customers a free wireless internet connection while they are waiting. You want your customers to keep coming back after all and a lot of people actually go to Starbucks just for the wireless internet. Even bigger savings can be had by using a residential phone service for your business such as Phonepower with rates starting at $4.99 per month. You will not get quite as many features as a business level service but it could suffice nonetheless.

In summary, every business needs hosted phone service because:

  • It is incredibly cheap and it can save a lot of money on phone bills.
  • It comes with a wealth of calling features included.
  • It is almost always unlimited calling and nationwide.
  • An auto-attendant can be easily setup to manage incoming calls.

Why does every consumer need it?

There are many alternatives for consumers when it comes to choosing a phone service. The obvious alternative to a home service is to simply only use a cell phone and dump the home service altogether. This can be an expensive option though as both calling and data charges can mount up very quickly. If we take the cell phone out of the picture and assume that most people have internet access at home, then it is a fairly easy decision when trying to decide between a legacy phone solution and a hosted phone solution. The benefits are mostly the same as described above for businesses with the cost per month being the biggest reason to change, as a hosted VoIP service will ultimately save most consumers hundreds of dollars per year.

Business Providers Comparison Table Ads (USA) Full Feature Comparison >>
Provider $/month Provider Highlights FREE Setup Minutes * User Reviews Details
  • Limited Time: FREE Phone Offer
  • 40+ Built-in Features
  • In-house Customer and Tech Support
YES Unlimited (4.3)
107 Reviews
  • Trusted by 300,000+ businesses
  • Unlimited Voice, Fax, Text, Conferencing
  • Risk Free - 30-Days Free Trial!
YES Unlimited (4.3)
163 Reviews
  • Free Phones with sign-up
  • No Contract, No Commitment
  • USA Based Customer Support
YES Unlimited (4.9)
6 Reviews
  • Amazing service
  • A top rated provider
  • #1 in customer satisfaction
YES Unlimited (4.5)
181 Reviews
  • Instant phone numbers in 50 countries
  • Includes IVR, ACD & recording
  • Unlimited plans available
YES Pay as you Go (5)
4 Reviews

* Most providers include an upper limit on minutes for their unlimited plans as part of a reasonable usage policy in their T&Cs.

Click here for FREE Hosted VoIP Quotes

Author: Tony Campbell

Published: by WhichVoIP

Related Articles for Further Reading:

left arrow PREV
Vonage Business Desktop
NEXT right arrow
Business Frequently Asked Questions (FAQ)


Have something to say about this topic:

Use the form below to add your comments/thoughts and to interact with us. All comments will be moderated by WhichVoIP.com before going live. We try to answer all questions within 24 hours.

Email: (Not displayed on site, used so we can respond to you)
Please enter this code below:
Add my email to the WhichVoIP.com newsletter
(special deals, low frequency, unsubscribe any time)

By submitting your comment you agree to our site Terms of Use


WhichVoIP Visitor Comments

#1 : Posted by Al on April 30th, 2013:

Good comparison. Seems like a no brainer to move my business over to this type of service.


Subscribe to our Newsletter

  • Useful tips and resources
  • Special deals and promo's
  • Your privacy protected
  • Over 25,000 subscribers

Useful Resources

Recent Business User Ratings

  • INTERMEDIA : (1.4)
  • MAR 3rd, 2015 by Paul

  • G3TELECOM : (2.4)
  • MAR 2nd, 2015 by Joe

  • RINGCENTRAL : (4.8)
  • FEB 26th, 2015 by Penny

More Ratings || Write a Review