How to Install Phone Lines: A Step-by-Step Guide (2024)

RingCentral Polycom Phone Setup

Business phone installation is a smart move. People still want to talk to businesses no matter how digital we get. 71% of consumers prefer the telephone to contact small enterprises.

When looking to install a business phone system, phone line installation costs are one of the more common reasons people don’t move forward. But the truth is, installation costs can be the lowest expense, and even that depends on a few other vital factors. 

With so many options available, it is worth your time to consider the big picture before deciding. In this article, we’ve outlined some of the things you need to know and how each impacts the cost of your phone line installation. 

Step-by-Step Guide on Phone Line Installation

  1. When installing a residential telephone jack, start by determining the route and locations for the new phone jack or existing jack and outlets. In old installations, only one pair of phone wires (red and green wire) and no second pair. In the 1960s, black and yellow telephone wiring was popular in providing low-voltage power.
  2. Gather tools such as phone cables, wall jacks, a screwdriver, a telephone wire stripper, a modular connector, and your four wires.

3. Ensure safety by turning off the power, especially when drilling into walls. Choose whether to run the cable through walls or along baseboards and a mounting plate.

4. Secure it using clips or adhesive, and be cautious of electrical and plumbing lines if drilling. Begin by attaching the wires at one end of the phone cable to the corresponding screw terminal on the main phone terminal block.

5. After running the cable through walls or under floors to the new location, connecting the phone cable to a new telephone jack follows the same color-coding scheme.

6. Identify individual wires you will use, the old four wires: primary line – red and green, and secondary line – black and yellow. Remove the junction box cover and expose the mounting plate and holes.

Installing phone cable in finished walls employs techniques similar to electrical circuit cable installation but is simpler due to the cable’s small and flexible nature.

7. Plug in a phone to test for a dial tone. Check all jacks for proper functionality. Bundle and secure new wires excess cable length. Label home phone jacks for easy identification.

8. Conceal cables neatly along baseboards, in conduits, or behind furniture to restore the power.

Factors That Impact Phone Line Installation Cost

Here are three of the main factors that can impact phone line installation costs:

  • Type of Phone System
  • Telephone Service Provider
  • Business Requirements

Types of Business Phone Systems

Analog PBX Phone Systems

PBX is short for Private Branch eXchange. Think of it as the original business phone system, the OG. Until recently, PBX was only functional with onsite hardware, using an analog or digital connection.

Everyone on the PBX is on the same phone system, and their unique extension is plugged into the hardware. Any incoming or outgoing calls are routed from the phone company to the local site and then to the appropriate extension.

PBX business telephone systems offer a variety of features, including multiple options for inbound and outbound calling, business hours, call routing, voicemail, hold, transferring, and more.

While some companies still use an onsite PBX system, it is becoming less and less common in favor of a digital option.

Analog PBX Phone Systems

On-Site IP PBX or VoIP PBX

According to the FCC definition, Voice over Internet Protocol (VoIP) is a technology that allows you to make voice calls using a broadband Internet connection instead of a regular (or analog) phone line.

Unlike analog PBX, VoIP uses a broadband internet connection to make and receive calls rather than analog or digital lines. While the company will still house all equipment onsite, the technology allows faster and more precise connectivity.

VoIP systems are the most used in business. And there’s no sign of this changing anytime soon. Worldwide, the mobile VoIP sector is anticipated to grow by more than 13% until 2025.3

Some businesses have started using a new phone system that takes onsite equipment out of the picture.


Virtual PBX or Cloud PBX

Virtual PBX systems need no onsite equipment except for physical telephones (even those are optional). Cloud PBX uses VoIP to make and receive calls. They are hosted on a cloud server rather than onsite, making them much more hands-off. And since the phone service provider is the virtual server’s host, they are responsible for maintaining it.

A cloud PBX system relies on an internet connection to work. A cloud system may not be suitable for your business if you have anything less than stellar connectivity. An online system also has a higher risk of security or data breaches. Be sure to discuss security with your phone service provider.

Phone Service Provider

When considering a business phone installation, one of the most important decisions is who you choose to be your service provider. Finding a vendor that can support the features, tools, and benefits you are looking for from a phone system is essential.

A service provider will charge a setup and monthly fee. Costs will depend on several things, including what type of system you choose, how many users you have, system features, the level of service required, and more.

There are plenty of quality phone service providers waiting to help you. Some big names are RingCentral, TRENDNet, or Datto, but there are many more.

Do your research to find the best service provider for your business. Read reviews and ask for referrals from other business owners with similar businesses. Once you’ve narrowed it down to your top two or three providers, interview each. It is a vendor-partner that you need to rely on and like working with.

How are their customer service and response times? It may take a little time, but doing this hard work upfront will pay off in the long run.

Business Requirements

Size of Business

What is the size of the business? How many lines need to be installed? Does everyone need their own extension, or will some groups share a number?

Features Needed

Voicemail, conference calling, automated directory, hold music, and call forwarding are just a few of the many options that business phone installations offer. Some come standard but be prepared to pay an additional monthly fee for those not included in your package. 

Number of Locations

Is your business at a single location, or are you looking to install a business phone system at multiple locations? If there are many locations, where are they in relation to each other? 

Type of Equipment

Are you looking to install a physical desk or landline phone? What functions do you need on each phone? Or are you leaning towards a computer or app-based tool instead?  

Cost of Phone Line Installation

The phone line installation costs of a business phone system typically ranges from $100 to $200. It will vary based on the combination of the system, the service provider, and the unique needs of your business.

As with the service provider, find a networking company you want to work with. Phone line installation is the vein of your business. You want to choose a company that you can trust.


Phone Company Tricks When Installing Telephone Jack

In older phone setups, the cable typically contains four wires: red, green, black, and yellow.

When extending lines, you can continue using this cable or opt for a newer Cat-3 or Cat-5 data cable, which works well for phone and data services, such as DSL internet connection.

Once you’ve run the cable to the jack location, wiring the jack is straightforward—match the phone wire colors correctly.


When planning for phone line installation costs, there are many factors to consider. One phone system does not fit all. And with all the options available, there is something out there for every business.

It will be best to find something that fits the specific needs of your business. When you do that, phone line installation costs will fall in line with the needs of your business.

If you want to learn more about business phone installation, call Network Installers, and we can answer any questions or get you started with your business phone system.

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The Network Installers is a low voltage electrical contractor that provides data cabling, network installation, fiberoptic installation, and WIFI installation. We've been serving commercial customers since 2008 with exceptional quality, consistency, and professionalism.


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