How Much Does It Cost to Install a Telephone System?

In this guide

Telephone System Costs by Type

There are a few different ways that you can have a phone system inside your home. Most operate the same way, with a headset or receiver, while others can be used via the speakers and microphone on your computer without any additional equipment. Each has its own cost for setup, equipment, and ongoing monthly fees. Keep in mind, however, that sometimes the three types are used interchangeably in conversation, with many people referring to digital phones as landlines and VOIP as digital. There are a few differences between them, though, that can influence how they work and how much you’ll pay.

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VoIP Phone System Costs

Voice Over Internet Protocol phone systems are considered a subset of digital systems. They can either be used with your cable and internet provider and equipment received through them, through your existing computer and network with no additional setup costs beyond a monthly fee after downloading an app, or you can purchase dedicated equipment and sign up for a monthly service plan. No matter which option you choose, you are using the internet to make calls. This can give you a lot of options, but if your internet goes down or the power goes out, you will lose phone service at the same time. VoIP has a range of costs from plans starting at $3.99 using your computer and existing equipment, to new equipment and setup of around $80, plus ongoing monthly expenses. Because you need to already have internet, there is no installation cost.

Landline Phone Cost

Many people today view any type of phone system inside the home that is not cellular service as a landline. This includes digital, which can use cable internet or fiber optics, or traditional twister copper wire. If your home is wired with copper, you can get a new phone for as low as $10 a month. If you need a new line and jack installed, you can expect startup costs around $150 - $200, followed by a monthly charge. Some providers will waive the installation fee if you sign up for a monthly plan. If you choose a digital option, you will have separate installation and setup costs with your internet or cable company.

Digital Phone System Cost

True digital phone service is via your cable or internet company. They run the cable to the room or jack you want your phone located, and you can either plug right into the jack or you can plug right into your cable modem. If you already have cable or internet, you can add phone service for an additional $30 per month on average. If you need equipment or a new line run, it can cost around $100, while if you need cable run through your home to each jack, it can cost as much as $700.

New Phone Costs by Type

Many phones can be used interchangeably, meaning that they can plug into a jack on a wall for analog or digital, or into a wire for digital. In either case, sometimes the phone can have multiple handsets and be used wirelessly, with only a charging base that plugs into your system. If you use a computer-based service, you can use your computer’s microphone and speakers, or purchase a separate headset as well. Below are some examples of different phones and their costs.

Analog Landline

If you still have an analog phone system and need a phone that will work with this, most basic analog phones cost between $10 and $15. They can be wall-hung or sit on a counter.

USB Headset

If you plan on using a VoIP system that runs over your computer, you can either use your computer’s built-in system, or you can opt for a USB headset. This headset allows you to talk over the computer, with no additional equipment, so you can use an internet-based provider like Skype. Headsets start around $30 for a basic setup.

Business Deskset

If you need a new business phone for your office, you can get a deskset or desktop phone that contains additional features that businesses need, including the ability to make interoffice calls and distinct voicemails for each extension. Many of these sets are expandable, so you can continue to add on as your business grows. They cost around $30 - $100, depending on the features you need.​

Digital Cordless Phone

Digital phones can offer you more options in terms of services and how you’ll use them. One benefit is the ability to plug a single base into the router or equipment, and then place a different handset in any room you want a phone. This is one of the least expensive options, as it means you don’t need to run a cable line or have a box inside every room. You just need one connection point, and you can run multiple cordless phones off of that point. You can get a single digital phone for $30, or pay between $100 and $200 for multiple phones that run off one base.

Telephone System Installation Cost

Depending on the system you are using, telephone system installation costs can range from nothing at all to up to $700 or more. Some services will provide equipment with new service; the only installation required is to plug it in. Other systems may require wiring the home, adding new jacks, new cables, or new equipment. This means that for each type of telephone system, there can be a range of costs for installation from nothing at all to several hundred dollars.

VoIP Installation Cost

VoIP only works if you have an existing internet connection in your home. It runs over the internet and can be contracted with a separate provider or with your internet provider. So, you may have no costs for installation at all if you are adding a phone system to an existing internet. Or, you may need to have a new internet connection and equipment installation before you can start using this service. If this is the case, your internet provider or an electrician will do the installation, with most providers charging a flat rate of $100 - $200, and electricians costing between $40 and $120 per hour, with this job taking 1 - 2 hours on average.

Analog Landline Installation Cost

Many places are doing away with analog landlines, but it is still possible to have one installed in many areas. You would need to work either with your telephone provider or with an electrician to have the line run to your home, and a jack or jacks installed. This has an average cost range of $150 to $300 on average. Keep in mind that landlines today can also mean digital phones, so your phone company may not provide an analog installation service.

Digital Phone Installation

Digital phones can either be VoIP or have a dedicated line, depending on your provider. Often, they use the same internet connection or cable connection that you already use, but with a separate line to power the phone. If you already have cable or internet, it’s easy to add phone service, and there are no additional installation costs. If you do not have cable or internet service, some providers will install at no cost with a new plan, while others will charge around $200 for setup. If you want to have digital phones hardwired into every room of your home, this can cost $700 or more depending on how many rooms you are wiring into. You can contract with your cable provider or an electrician for this service.

Telephone Monthly Cost

No matter what type of system you have or what type of hand or headset you use, you will need to pay monthly fees in order to use the system. There are many different phone providers, and your average cost of a telephone bill each month will vary by system, provider, options, and the plan you choose. There can be a wide range of costs associated, depending on the provider and what type of calls you typically make. Some of the more common providers and their monthly costs include:

Analog vs Digital Phone Line

Analog is available in some areas, but is slowly disappearing as digital becomes more accessible and less expensive. Analog phone lines are usually cheaper for a very basic phone, but often don’t include a lot of other options like call waiting, voicemail, and three-way calling. Digital phone lines are more expensive, but they can give you more options, and allow you to bundle your home phone with your cable or internet.

Keep in mind, that if your power goes out, your digital phone will not work. The same applies to your internet; if it goes down, so does the digital phone. Analog phones will often continue to work in these instances unless the phone lines are also down.

Phone Jack Installation Cost

If you want to be able to plug a phone directly into any room of your home, either for analog or for digital phone service, you need a phone jack or a connection for the phone to plug into. Phone jacks come as both 4 conductor and 6 conductor types. They can be installed by the phone provider, your cable provider, an electrician, and in some cases by the homeowner. Professionally installed jacks cost around $150 each for a standard installation.

Digital Phone Equipment

In addition to the phone itself, there are times when you may need more equipment for a digital phone setup. This may include things like a router or a headset. 

If you aren’t piggybacking off your internet and using your provider’s equipment, you may need to purchase a separate router. Routers can cost $25 to $200, and can vary in speed and reliability. 

If you choose not to use a phone or handset, most digital systems will work with a headset, particularly those that have a wireless router and smart capabilities. Headsets for home phone use can plug into your computer or they can connect to your computer via Bluetooth if your computer is enabled. They can cost $25 to $200, depending on the options available.

Phone Line Installation Cost Factors

There can be many factors that impact the total cost of your project. The number of dedicated lines, such as having a separate phone number for a child or for an in-home office can be one expense. The type of system can also impact costs, as some will simply plug in, while others must be wired. Whether you have existing wiring or not will also influence the cost, and so can the system itself and whether you have installation and equipment included in your plan or whether the plan will charge these separately.

How Much Does a Business Phone System Cost

If you are setting up a business, you will have different costs than a home phone system installation. Businesses often need multiple lines or extensions, as well as the ability to support more data. Businesses can use a variety of services including VoIP, digital, PBX, and KSU, and these will all have their own associated costs.

VoIP starts at just $3.99 per month per user, in addition to other costs.

Dedicated digital lines cost around $39.99 per month per line for businesses, and include things like voicemail and interoffice calling.

PBX digital phones, which run via the internet, also have many business features such as holding, extensions, and voicemail. This costs $20 to $200 per line per month, depending on the features and amount of use.

KSU or key-systems are the most basic type of business phone system. They give dedicated lines and extensions, and can also offer features like transferring, holding, and voicemail. Costs start between $40 and $200 per month, per line depending on features and amount of use.

Enhancement and Improvement Costs

Phone Special Features

Nearly all digital and business phone systems today come with the ability to add special features such as call waiting, transferring, three-way calling, and voicemail. Some of these come standard with certain plans, while others can be added to plans for rates starting at $2 - $5 per month per option, per line added.