5 Considerations When Picking a Hosted IP Phone Provider

Updated: June 02, 2011

Phone and System Features

Make sure you are getting the features you need and want. Most providers have the basic features, like hold and transfer but other providers have unique features like hot desking (using any phone on the network) and mobile twinning (sending calls to both your cell phone and desk phone simultaneously) that can really enhance your operational efficiency and improve employee productivity. Make sure to get a full list of features and an explanation of each before making a decision.

Another important item to consider is to make sure your phone features work even if your phone is offline or if you have logged out of the devices. While some systems have features like call forwarding or call redirect that are "in the cloud", other systems put those features and settings in the device. This could really be disruptive to your business in a time of need. Imagine buying a system that promised disaster avoidance only to find out that those features don't work when you need them most, like when you have a power failure.


This is a big area to keep an eye on. The brand of phones used and the types of phones offered should be an item to check. Make sure that the physical phone you are getting is from a quality vendor. There are a lot of cheap phones on the market from unknown vendors and while they may look great in a picture, the worst thing that could happen is you get the phone on site only to discover that it is not a quality product. Also make sure that you can get the types of phones you want. You may want a small phone for a lobby or point of sale location and a high quality conference phone for the board room. Having lots of phone options provides you with ultimate flexibility.

Pricing/Business Model

Generally, there are two types of pricing models offered by service providers: unlimited per user plans and custom plans. Unlimited plans are simple to understand but you're often stuck paying for features you may not use and you can easily over buy as well. For example, if you have five users, each on an unlimited plan, you'll likely get five phone lines too. The odds of you needing five lines for five users are slim. Custom pricing plans let you tailor the service to your exact requirements. Another consideration is whether to buy or rent the phones. Buying phones may be a good option for some but if they break or need to be upgraded to enable a new system feature, you are on the hook to pay for new phones. Pricing and business models vary greatly by provider and a few providers offer both purchase and rental options for equipment.

Call Quality

Just like pricing models, there are two general types of hosted providers. The first we'll call Internet-based providers. These providers use the Internet to transport calls from your office into their own network. This is usually fine for smaller companies or remote users but you need to make sure you have enough bandwidth to support the volume of calls at each site and you should attempt to manage Quality of Service on your local network to prioritize VoIP traffic. The Internet is a best effort network so call quality can suffer. The second type of provider offers services over a managed circuit and generally will guarantee call quality and reliability. Some of these providers also offer Internet-based services as well, giving you the flexibility to scale up or down as needed, depending on your requirements, applications and budget. Many companies use Internet-based service for smaller locations while large sites have dedicated services to ensure quality.

Vendor Experience

This is probably the most important item to consider. VoIP is not a new technology and the barriers to entry into this market are low. It seems like a new Hosted IP phone provider is born every week in the US. While some providers are very good, other providers will fail and you could be left high and dry for voice service. Review any and all financial data you can so you know the health of the company you are signing up with and make sure you know how long they have been providing service. While the barrier to entry is low, it takes years of experience to develop the right type of service and support structure to support a business customer in the manner they deserve to be treated.

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