TDS managedIP Hosted

ROI Calculation

A phone system is an essential part of your business. And most often, it’s the first interaction customers have with your business. To accurately calculate your return on this most important investment, you need to understand all the costs associated with it. With the technology improvements and addition of VoIP solutions, calculating the VoIP ROI can be difficult. But, TDS will make it easier for you.

The ROI Equation*—compare the business case for VoIP phones.

To reduce their local and long distance costs, XYZ Corp wants to switch to a Hosted VoIP system. XYZ Corp can accommodate the change with its existing networking infrastructure. They have 20 employees (seats), 20 phone lines, and a T-1 data connection already installed. The two VoIP comparisons below are:
  • IP PBX phone system: the equipment resides at XYZ’s location
  • Hosted VoIP system: the equipment resides in the service provider’s data center

IP PBX Hosted VoIP
Upfront Hardware & Phones $15,000.00 Included
Maintenance $1,500.00 per year Included
Upgrades $500.00 per year Included
Employee Costs (managing system) $10,000.00 per year N/A
Primary Rate Interface (PRI) $4,000.00 per year Included
Long Distance Charges $2,400.00 per year Included
Internet Service $1,200.00 per year Included
Data Network $1,000.00 per year Included
TOTAL FIVE YEAR COST $118,000.00** $72,000***

Cost savings over a 5-year contract is $46,000.

(With nearly 50% of the savings in the first year of the contract at $21,200 and $6,200/year the remaining 4 years)

*The return on investment for VoIP and cost savings vary depending on business size, service provider costs and services selected.

**Estimated costs of an average IP PBX for a 20 phone system in a 5 year contract. Actual cost may vary.

***Estimated costs of an average 20 seat managedIP Hosted VoIP system in a 5 year contract. Actual cost may vary.

Bottom Line

Your system should provide critical cost savings and practical business advantages. TDS is committed to providing the right solution for your business. And, we will help you evaluate all costs so your business can achieve a return on investment for VoIP!


  • Maintenance and Upgrades—are there costs for additional maintenance and upgrade fees so your business can maintain functionality and stay competitive? Are there additional fees for server and operating system maintenance?
  • Capacity—Are there additional costs if your business grows?
  • Licensing—Are there licensing costs associated with IP functionality for the system and/or handsets?
  • Expense—Does the solution require an upfront capital purchase or is it a monthly fee?
  • Data Switched Network—is the best-in-class data switching gear included along with the maintenance and configuration of the equipment?
  • Trunking—Are there any impacts with call set up and call routing within the IP PBX at the customer’s site versus a Hosted VoIP Solution? Will my customers receive a busy signal with either option?
  • Disaster Redirect—In the event of a power interruption or a cut circuit, will the system re-route incoming calls to a cell phone, voice mail, or remote location?

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