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Cisco SPA8800 - IP Phones For Small business

I have 3 analog phone line. I would like to set up a PBX like system in business to route transfer, auto answer etc. So i did some researching and found Cisco SPA8800. I am hoping just to purchase this device and about 4 to 6 IP (Which i am also looking for recommendations too). I came across a post that says i have to setup a sip server. Is that true. What are your recommendation for a IP PBX system.  Whats phones recommend.

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