Types of Phone Systems

  • Business phone systems offer features that help manage call volume and routing to employees.
  • Business phone systems are usually available in three types: KSU, VoIP and PBX. Each has advantages and disadvantages.
  • Confirm that the business phone system provider is reliable, with high customer satisfaction rates and quick technical assistance turnaround.

Business phone systems

Business phone systems provide companies large and small a way to manage their inbound and outbound calls. Business phone systems offer significantly different features from residential phone systems. The phone system must be designed to handle multiple calls at once and to transfer calls within the organization.

Today’s business phone systems may include the following features:

  • Multiple lines: Permitting multiple lines allows employees to switch between calls to better manage times of high call volume. The size of your business will determine how many lines you need for your business phone. Small businesses can usually work well with two to four lines.
  • Auto-attendant: A business phone line can offer an automated attendant to greet callers and route them to the right employee.
  • Visual voicemail: Voicemail systems for business phones can do more than just store recorded messages. They can transcribe the voicemail and send it directly to the employee by email or text message.
  • Conference calls: Meetings can be scheduled by phone, with multiple callers participating in the conference call. This feature is a must for organizations with remote employees.
  • Call forwarding: Calls can be forwarded to another number as needed, or even to an email address.
  • On-hold messages: You can record a message that lets those on hold know that their call will be answered as soon as possible. You could also play music over the line for the caller while they wait.
  • Handset support: Modern business phone systems should be compatible with wired and wireless headsets.

As you look at each feature provided by business phone system retailers, consider the vendor itself too. Confirm the company has a solid track record with good client reviews and readily available customer service should a problem with the system arise.   

Editor’s note: Interested in a business phone system? Fill out this questionnaire to have our vendor partners contact you with more details.



What are the different types of phone systems?

There are three basic types of business telephone systems: KSU, PBX and VoIP. For each of these systems, there is a hosted (cloud) and a nonhosted version. Let’s take a closer look at how they differ.

Key system units

The most basic phone system is the key business telephone system that uses the key system unit (KSU). This type of system is only suitable for small businesses with no more than 40 employees working as phone operators, given the limitations on the number of phone lines it can incorporate. 

It’s an easy-to-use system, comparable to a home telephone. It has all the basic features a business will need; however, it lacks portability and flexibility. It uses a central switching device – the KSU – to manually determine the phone-line selection.

The variation of this system is called KSU-less, which has the same phone capabilities as the basic system; however, it is portable and flexible, as it does not use the central switching unit, and entirely wireless.

The KSU-less system has some serious limitations, though. It only allows for approximately 10 phone operators, and it’s not sold commercially – you must specifically request it from a phone system provider. A KSU-less phone system is ideal for a very small business that doesn’t intend to expand its workforce; it’s not that useful for small businesses looking to grow.

Private branch exchange

Another type of system is private branch exchange (PBX). This is a more advanced system than the KSU and KSU-less systems, so it allows more features. It uses programmable switching devices, enabling the automatic routing of incoming calls.

This type of business phone system is suitable for a company with 40-plus employees, as it’s a largely automated system. Another major advantage of the PBX system is that it features an uninterruptible power supply, allowing a business to remain functional without electricity for some time.

A modification of this system is the hosted PBX. The only difference with this system is that the programmable switching device is no longer installed on-premises – it’s hosted by a telephone provider. The main advantage is the ability for a business to avoid some installation and maintenance costs involved with the standard PBX system without losing any of the advanced features it initially has to offer.

Voice over Internet Protocol

The latest telephone innovation for businesses is Voice over Internet Protocol (VoIP). This is the most advanced system by far, allowing a potential client and phone operator to communicate even if the two are in completely different countries. It works with the use of both the internet and a computer. However, this also makes it the most expensive system, with the cost determined by the number of employees who need to use it. The main benefit of this system is that all its functions are accessible by computer.

Similarly to PBX, the VoIP system can be hosted. The hosted version offers the same advantages as the basic VoIP system, with less installation and maintenance involved for the business using it, as the service provider hosts the main telephone system.

What is the average cost of a business phone?

The best business phone systems’ monthly costs start at about $12 to $20 per user. Some popular providers, such as Zoom, charge less than this per month (starting at $10 per user in Zoom’s case) but also charge per minute (3 cents).

Any service has varied costs, though, and business phones are no different. Some factors affect the cost of business phone lines more than others. The biggest factor is the number of lines. For larger businesses, bundled line services are an option. For smaller businesses, each new line is a multiplier on the monthly cost.

The type of phone service also matters. Traditional landlines do not run at the same cost as VoIP services. Whether you can hold teleconferences and video conferences, store messages, and access other popular communication mechanisms will impact the price per line (or per user). Special features such as answering services, mobility services and extra support can also drive up the price of a business phone.

How often should you upgrade your phone system?

There are many viable answers to this question. For mobile phone systems, the general practice is to upgrade every two years. This prevents maintenance problems with mobile phones and ensures that the business is operating with up-to-date systems.

This cycle can be pricey, so there are two other ways to determine the time for an upgrade. The first is functionality. In other words, if your phones are working fine, keep them. Don’t upgrade until they start to show consistent problems. For many businesses, this can slow the average upgrade time to every five years.

You might also decide to upgrade when a new feature will make a major difference for your business operations. When cell phones became smartphones, they offered productivity benefits that many businesses ultimately adopted. The migration from 3G to 4G had similar impacts. Right now, 5G is proliferating and becoming more available, and the increase in capabilities could prove beneficial for many businesses. Any major upgrade that will generate a clear return on investment is worthy of your attention.

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