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Why Switch to a Hosted Phone System?

Daniel Hill |

April 2022

Business Phone Line Supplier

Both new and existing business owners will have heard of the phrase ‘hosted telephony’. Hosted PBX phone systems such as hosted VoIP phone systems allow businesses to communicate over the internet. More and more business owners are investing in digital systems, which require less maintenance and upfront costs than traditional systems. 

If you are thinking about switching to a hosted network, you are just in time. The upcoming PSTN switch-off could create long-lasting problems for business owners who rely on analogue networks for their communication and security needs. 

At Love Energy Savings, our experts take the mystery away from complicated concepts. ‘What is a hosted telephone system?’ and ‘how does a hosted telephone system work?’ are two of the most common questions that our readers ask. Keep reading to find answers to the most pressing questions about hosted networks.

What Is a Hosted Phone System?

Hosted telephony is a modern alternative to traditional analogue phone systems such as PSTN systems. Hosted telephone systems, which are also called hosted PBX phone systems, connect to IP networks. 

PBX (Private Branch Exchange) systems transmit data through the internet. Unlike traditional systems, which require physical hardware, hosted telephony relies on secure internet connections. Business owners in the UK can also access this type of system through dedicated leased lines

How Does a Hosted Phone System Work?

Whereas traditional phone systems depend on physical infrastructure that is located at business premises, hosted PBX phone systems do not require on-site hardware to be fully operational. Most hosted systems reside in the cloud. The term cloud computing refers to online data storage and computing power. The software and services offered by the cloud operate over the internet. Businesses can use clouds to outsource their computing needs. 

Hosted systems operate on either the cloud or off-site data centres. Off-site data centres are secure, physical locations. They are not located on the premises of the businesses that they serve. In this sense, hosted networks that operate from off-site premises are not entirely digital. 

Hosted telephony is a popular option because it is easy to connect to the cloud and off-site data centres. Business owners pay a monthly fee and simply plug in the desk phones that their provider has sent them. The provided desk phones will automatically connect to either the cloud or the off-site data centre. Traditional networks have much longer installation times, which can pose a problem for businesses that need to react quickly to customer demand. 

Hosted PBX Phone System Pros and Cons

Hosted PBX phone systems are becoming more and more popular. There are lots of benefits to these modern systems. Here are some of the reasons why they have grown in popularity. 

  • No upfront costs - Lots of business owners choose hosted telephony because it does not require large upfront costs. In the past, big businesses invested in expensive leased lines for improved networks. Leased lines require weeks if not months to install. Hosted customers only have to pay for initial setup costs for essential items such as compatible handsets, routers, and modems.
  • Incoming calls - Hosted systems are perfect for call centres and busy offices. Employees can answer incoming calls on desk phones, mobile phones, or even applications.
  • Manage international communications - A interface is all that PBX customers need to manage international communications. This feature is perfect for business owners who want to expand their reach.
  • Modern alternative - Hosted PBX phone systems transmit data through a secure internet connection. They are modern alternatives to traditional analogue PSTN networks. By investing in a PBX system now, managers can avoid the disruption that will come with the PSTN switch-off. 
  • Range of features - Hosted phone systems come with a range of features. With hosted hybrid systems, business owners can pick and choose the features that suit their organisation. This is ideal for people who want tailored services. Hosted systems are very versatile, and can adapt to meet the needs of any kind of business.
  • The provider manages maintenance - The cloud host or off-site data centre manager will maintain the network. They will complete all the necessary updates to keep the software running smoothly. People who invest in PBX systems never have to worry about expensive maintenance bills. 


The biggest disadvantage of hosted telephony is that it requires a stable internet connection and suitable bandwidth. However, business owners can opt to increase their bandwidth whilst setting up their preferred hosted network.

It is important to remember that not all hosted systems are the same. True cloud-hosted phone systems and hosted hybrid phone systems are similar, but there are a few significant differences. 

True Cloud Hosted Phone System

True cloud-hosted telephony systems are designed for small businesses. It is a common misconception that true cloud systems allow small business owners to choose features that suit them. There are only a few pre-set features available to organisations that want this type of system. This system offers small businesses communication features that they would only otherwise be able to access through premise-based, traditional phone systems. 

Small and blossoming enterprises might not be able to pay for expensive premise-based systems. In this case, true cloud-hosted telephony systems are ideal. 

True cloud-hosted PBX phone systems operate entirely over the internet. As with other PBX systems, this is both the biggest advantage and disadvantage. If the internet connection is not secure or strong, the communications features will not work. 

Hosted Hybrid Phone System

Hosted hybrid phone systems require a physical data centre. The data centre is not located on the business premises. In simple terms, hosted hybrid systems are just like premise-based phone systems, except they are located off-premises. Hosted telephony systems like this prove to be a hassle-free alternative to traditional on-site phone systems. The data centre will handle any updates and maintenance tasks. 

Whereas true cloud systems offer pre-set features to small businesses, hosted hybrid systems offer a much larger range of features to businesses of every size. Business owners can add features and applications to their packages as their businesses grow. We recommend this hosted PBX phone system for business owners who want responsive, flexible software. 

What Is a Hosted VoIP Phone System?

VoIP (Voice over Internet Protocol) systems allow businesses to take and make calls over the internet. It operates on an IP (Internet Protocol) system. Hosted VoIP phone systems offer business owners all the same benefits of true cloud and hosted hybrid systems. 

One of the biggest benefits of hosted VoIP phone systems is that they have a range of features. Big and small businesses can receive 24/7 customer support to ensure the smooth running of their operations. VoIP guarantees call analytics, call forwarding and handling, and call recording. Business owners can also use an online admin portal to manage their VoIP expenses and communication needs. 

It is important to remember that all hosted and cloud systems operate on an IP system, but not all IP systems are hosted.

Browse through our VoIP system packages to find one that suits your business. 

What Is the PSTN Switch-Off? 

Phone network providers have dubbed the switch from analogue to digital phone systems the ‘PSTN switch-off.’ PSTN stands for Public Switched Telephone Network. Since the early 1800s, domestic and commercial phone network users in the UK have used analogue PSTN networks for their communication needs. 

In 2019, Openreach announced that PSTN networks will be defunct in 2025. Openreach is a UK-based company that manages all the telephone ducts, cabinets, exchanges, and cables in the UK. It will stop selling new systems that operate on PSTN networks in 2023. 

This transition will cause a lot of disruption for business owners and homeowners who do not switch to a hosted telephony system before 2025. Essential equipment such as panic alarms, burglar alarms, and even security systems that operate on PSTN networks will stop working by 2025. We recommend switching to a hosted PBX phone system as soon as possible. 

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About the author

Daniel has been writing for over 10 years and has a passion for helping businesses and households reduce their utility bills. He has a wealth of experience in professional services, so he knows the importance of business efficiency.

In his spare time, Daniel can be found catching touchdowns playing American Football and spending his Sundays watching the Los Angeles Rams in the NFL. 

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