VoIP Costs
Per-Extension Pricing Models Explained
“Per extension” sounds like one pricing model. It is at least four, and the difference decides whether a warehouse phone used twice a day costs you $3 or $30 a month. Providers choose the model that presents best in their headline; your job is to map it onto how your people actually use phones.
This guide defines each model — per-seat (per-user), per-device, per-extension in the classic PBX sense, and shared/common-area licensing — with the business profiles each one suits and each one quietly taxes.
The four models
| Model | You pay for | Suits | Overcharges |
|---|---|---|---|
| Per-seat / per-user | Each named user, all their devices included | Knowledge workers with desk + mobile + softphone | Part-time, shared and rarely-used phones |
| Per-device | Each registered endpoint | Fixed stations; predictable device counts | Users with 3 devices each |
| Per-extension (classic) | Each extension number on the PBX | On-premise systems; extension-heavy sites | DID-heavy setups if numbers also bill separately |
| Common-area / shared license | A reduced-feature license for lobby, warehouse, break-room phones | Any site with utility phones | Nothing — if offered; many quotes omit it and bill full seats |
The warehouse-phone test
Walk your building and count phones that belong to a place, not a person: warehouse, lobby, conference rooms, the shop floor, a courtesy phone. In a 40-phone business it is common to find 8–12 of them. At a $25 full seat, those phones cost $200–$300 a month for near-zero features; on common-area licenses (often $5–$10 in published pricing) they cost a third of that. If a quote prices every endpoint as a full seat, that single question — “what is your common-area license?” — is frequently worth more than haggling over the seat price itself. Conference phones and fax ATAs deserve the same question.
Audit a quote against your real phone population
- Inventory endpoints and label each: named user, shared/common-area, utility (fax, door, elevator), or spare.
- Map the quote's model onto the inventory: count what you are actually being billed for in each category.
- Ask for common-area licensing for shared phones and utility pricing for ATAs; get refusals in writing (they tell you about the provider's flexibility).
- Check whether mobile/softphone apps for a named user are included or billed as extra devices.
- Model growth: price the quote at +20% users. Per-seat models scale linearly; device models scale with your hardware habits.
Frequently asked questions
- Is per-seat the same as per-extension?
- No. A seat is a person with an identity (apps, voicemail, personal settings) and usually includes several devices. An extension is a number on the system. One seat typically equals one extension plus apps; one person with three desk phones is one seat but three devices.
- Can one extension be shared by several people?
- On most hosted plans, an extension maps to one user license; sharing credentials across shifts violates many providers' terms and breaks caller ID and voicemail privacy. Common-area licenses are the legitimate way to price shift-shared phones.
- Which model is cheapest overall?
- The one matched to your phone population. Device-heavy knowledge work favors per-seat; station-heavy environments (clinics, schools, retail floors) favor per-device or common-area mixes. Mismatched models routinely differ by 25%+.