North Lincolnshire Council has calculated that an IP communications network could save it £70,000 a year.
The council will move all of its services to the system this week.
Under a £1.2m contract, Redstone will provide voice and data lines linking more than 140 council premises. The system will automatically bill each department and offer call cost analysis.
The council said it would make savings of about 55% on call charges and 25% on line rentals. It identified an additional £10,000 of savings from underused ISDN lines.