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Posted on 15th February 2017

When 'free' is not really 'free'

Over the past 2 or 3 weeks, I have come across several competitors quoting ‘free hardware and installation’ or no upfront costs, and working with one of our customers we done a little digging to see what it was all about.... READ MORE>>

When 'free' is not really 'free'

Over the past 2 or 3 weeks, I have come across several competitors quoting ‘free hardware and installation’ or no upfront costs, and working with one of our customers we done a little digging to see what it was all about.

OK, so on the face of it, there was no cost for the hardware or any set up or installation charges, sounds good... YES!

However, I wanted to know what the total cost of ownership over a number of years, as surely this was key in making any decision for the buyer.

Without going into loads of detail, this was a hosted telephone system for about 40 users.

                                                   Comms Supply         Competitor

Upfront Costs                                    £6200                    ‘Free’

Monthly Costs                                    £240                      £420

                                                    Comms Supply        Competitor

Cost Over 3 Years                             £14840                    £15120

Cost Over 5 Years                             £20600                    £25200

Cost Over 7 Years                             £26360                    £35280

Now I would like to think my brand new hosted telephone system is going to last at least 5 years, and over 5 years the ‘free hardware’ option is 20% more expensive. Realistically the service should last 7 years and then saving is 25%.

We have seen many quotes like this over the past few weeks, so please make sure you are checking the cost over the longer term, before being stuck with a very expensive phone system.

While I appreciate removing upfront costs can be beneficial to businesses, my advice is to look at leasing options, this means once the lease is paid off, you are not stuck with high monthly rentals.  

Karl Alderton

Managing Director, Comms Supply