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Digital Phone System Cost

Digital Phone System Cost

National average
(plus per month fees for Vonage North America)
Low: $2.99

(per month for Skype)

High: $277

(27.99/month per Vonage World plus, installation and a new phone)

Cost to install a digital phone system varies greatly by region (and even by zip code).
Get free estimates from electricians in your city.

The average cost of installing a digital phone system is $9.99 - $277​.

In this guide

Internet Access
Additional Considerations

How Much Does It Cost to Install a Digital Phone System?

A digital or VOIP (voice over IP) phone system can be installed for a home or business, these phone systems offer several features and advantages compared to traditional analog phone systems.

Analog phones use copper telephone wire for communication, are very reliable and offer good voice quality. Most analog phone systems charge the owner extra if they call long distance outside of a certain area. However, VOIP phone systems plug directly into your internet router and use the internet for communication. These systems offer the ability to call many long distance areas without any extra charges and, if long distances calls that are not included in the subscription are required, the charges are usually much lower than analog phone systems.

There are two types of VOIP systems, the first is used by most individuals and non-businesses. This system involves using a standard broadband service with a VOIP subscription to make calls. The second system is primarily used by businesses. It is designed to link multiple locations to a single line, and requires specialized equipment to be installed at the location.

In this guide we will be looking at the first type of VOIP system which most individual consumers use, its cost, features and the installation requirements of two of the top brands: Vonage and Skype.

Internet Access

Broadband internet access is required for the majority of hosted VOIP systems. A typical broadband subscription will run $75 to $200 per month depending on the speed and other add-ons like cable television.

router 1 may need to be purchased for homes that only have a cable model. Routers 1 can cost $25-$200 depending on the desired features like wireless speed, range and reliability.

Netgear RangemaxIt is a popular starter router 1 that can work for Skype or Vonage and it is one of the lowest priced router 1 options.Some reviewers have complained about the wireless signal strength with this router 1, a few had breakdown issues within a few months of use. It isn’t as fast as some of the higher priced routers 1.$21
TP-Link Archer C7It is a moderately priced router 1 with some top features including 1.75 Gbps bandwidth 2 and 802.11ac which is the next generation of WiFi which offers superior performance for Skype or Vonage.Some signal drop issues. $94
Netgear AC1750It is designed for homes with multiple wireless devices and can support Skype or Vonage with 1.75 Gbps speeds and 802.11ac wireless.Some signal drop problems.$129
ASUS RT-AC68UAt the high end the ASUS RT-AC68U dual band Gigabit router 1 offers wireless-N data speeds which are up to 33% faster with dual band data rates up to 1.9 Gbps. A great choice for either Skype or Vonage.The main disadvantage is the higher price for this router 1, however it does offer some of the best wireless performance of any router 1 currently available.$191


Many VOIP service providers allow a homeowner to use their current phone system to connect such as Vonage. Services like Skype require a Skype-ready phone which needs to be purchased separately.

A Skype compatible phone can cost between $30 and $200 depending on the features, there are many phones available on the market that are compatible with Skype.

Philips 080One of the lowest priced Skype compatible phones and equipped with the ClearChat feature that improves the call quality.Must be attached to the computer in order to be used and some customers have had compatibility issues when using it.$32
Grandstream GS-GXP2160The Grandstream GS-GXP2160 IP Telephone can be used with Skype and it is one of the most feature rich VOIP phones available with advanced communication features.Some reviewers have said that the warranty is too limited and that the interface can be slow to use sometimes.$107
Cisco-Linksys CIT300The Cisco-Linksys CIT300 is a dual mode phone that is compatible with Skype and can be used as an analog phone as well.Some have complained about the battery life which doesn’t last overnight and the computer has to be on for the phone to work.$139
Polycom VVX 500Compatible with Skype and has several advanced features like audio processing and supports up to 12 lines with a multi-touch interface.One of the higher priced phones for Skype, a few customers have said that it could be more ergonomic.$189

Most smartphones, tablets and laptops have a microphone and speaker built-in 3 and can use Skype after it is installed. However, quality of the call can be improved with a headset, that can cost between $25-$260 depending on the brand and the quality desired.

Logitech ClearchatIt is much lower in cost than the mid-range headsets but offers good reliability and microphone quality.Some reviews mention that the microphone is too sensitive and picks up every sound in the room. Other negative reviews mention durability issues.$26
Logitech Wireless H800It offers digital sound and has the benefit of being wireless so it offers more mobility than regular headsets for Skype.Wireless performance may suffer from some issues and interference when further away from the computer, and the range is limited.$63
Logitech G35It is a 7.1 surround sound headset that offers better performance for sound and it is equipped with a high quality microphone.Some customers have mentioned durability problems with this headset when used frequently, but it does come with a 2-year limited warranty.$93
Sennheiser PC363DAn excellent choice for a headset, although it is designed for entertainment it can function just as well for business and it can double up as an entertainment headset.The high price is the main disadvantage with this headset, otherwise it is a great option for any business use.$256


VonageVonage has the benefit of being easy to set up with helpful support and several standard features included for free such as retrieve voicemails, caller ID, anonymous call block, 3-way calling, do not disturb, call waiting and transfer.There are no text or video capabilities with the service.Starting at $9.99 per month with a 1 year contract or $24.99/month with no contract for unlimited calls to U.S./Canada/Mexico up to $9.99/month for the first 6 months followed by $27.99/month for another 6 months, with a 1 year contractor 27.99/month with no contract for unlimited landline calls to 60 countries. Self-installation is free.
SkypeSkype is one of the most feature rich and lowest priced VOIP phone solutions, because of this it is very popular. It offers video calls and texting which many other services don’t offer. It only requires a PC computer and microphone/speakers with broadband internet access.Skype doesn’t work with many types of hardware phones like Vonage and other services do. It also lacks 911 calling ability and call return.Starting at $2.99/month for unlimited U.S./Canada calls up to $13.99/month for unlimited landline calls to 63 countries. No install fee.


Upgrading a current analog system to a digital phone system is very simple. It usually only requires unplugging the analog phone system, cancelling the analog subscription and following a few basic steps for the VOIP phone like plugging the VOIP box into the internet.

The only potentially major cost is the cost to install broadband internet if a home hasn’t been wired for it. Most internet service providers like Comcast will do a home cable installation for relatively cheap, around $100 or a discounted rate.

Enhancement and Improvement Costs

  • Upgrade the service to be able to call landlines in more countries. This is very useful for those who make long distance calls to landlines on a regular basis and need a low cost service. It can save hundreds of dollars on long distance fees for those who use long distance frequently.​
  • Vonage Business is $39.99/month/line. However, Skype Business is priced much lower at $2/user/month (in addition to the standard monthly subscription). Vonage Business is intended more for companies that have a physical location, as separate lines and extensions can be added for different departments, while Skype Business may be more suited for home based companies.
  • A hosted PBX phone which is connected to the internet and has numerous business features like call waiting, routing, extensions, hold, and other features will cost between $20-$100 per user per month based.

Additional Considerations and Costs

  • Removing an old phone system can be performed by the homeowner and doesn’t require any technical experience.
  • If a broadband company won’t handle the cable installation, hiring an electrician to do one can cost between $65-$85/hr. and take 3 to 8 hours or $195-$680 depending on the complexity of the installation. Flat rate installations can cost between $150-$700.


  • What is a digital phone?

A digital phone uses your internet connection and modem to make calls, rather than the wires used by analog phones, making the cost for long distance calls comparable to the costs of local calls.

  • How does a digital phone work?

A digital phone plugs into your internet router and uses your internet connection for communication, rather than copper wires.

  • What is a digital phone line?

A digital phone line makes use of your internet connection to make calls. You plug the phone directly into your internet router, rather than a typical phone jack.

  • Is digital phone the same as VoIP?

Yes, a digital phone is the same as a Voice over Internet Protocol, or VoIP, system.

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Remodeling Terms Cheat Sheet

Definitions in laymen's terms, cost considerations, pictures and things you need to know.
See full cheat sheet.
glossary term picture Router 1 Router: A device used to share data packets between computer networks
2 Bandwidth: The amount of data that electronic communications systems can send and receive within a certain time period. Bandwidth is measured in bps (bits per second)
glossary term picture Built-in 3 Built-in: An item of furniture, such as a bookcase or set of cabinets, that is built directly into the structure of the room. Built-ins are therefore customized to the room and not detachable

Cost to install a digital phone system varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

Digital or VOIP (voice over IP) phone system installed


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Compared to national average
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Austin, TX
Bolton, MS
Brooklyn, NY
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New York, NY
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Oklahoma City, OK
Orlando, FL
Pensacola, FL
Philadelphia, PA
Phoenix, AZ
Portland, OR
Sacramento, CA
Saint Louis, MO
Saint Paul, MN
San Antonio, TX
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