Hosted Phone System Guide: Pros and Cons

If you’re in the market for a hosted phone system, you might have a lot of questions. Hosted phone service, also called virtual private branch exchange, or PBX gives you all the features of a traditional phone system without the heavy costs. But how does it work? What does it take to set up a hosted phone system? And is a cloud-hosted telephone system actually reliable?

In our guide, we’ll explain it all. Read along to find out the answers to your questions and learn about the benefits (and drawbacks) of a hosted phone system. 

What Is a Hosted Phone System?

A hosted phone system is one that uses an internet connection rather than a traditional copper wire. The phone system is hosted for you at another location, so there’s no need to keep servers on-site. There are two kinds of hosted phone systems to choose from, depending on your business’ needs. 

If you already have a PBX system in place, you can opt for PBX SIP trunking. SIP trunking allows you to use existing hardware to connect your PBX system to the cloud. Setup for PBX trunking might require someone with IT experience, but many providers offer assistance to help you with installation.

The other option is a cloud-hosted phone system. Cloud-hosted phone systems route all calls through your internet connection. VoIP-hosted phone systems are easy to set up and easy to manage. Cloud-hosted phone systems also give your company more flexibility. Employees can make and receive phone calls on any internet-connected device, unlike PBX SIP trunking, which requires employees to be in the office. You might make calls from a computer, a smartphone, or even a tablet. All you need is to download the provider’s app to get started.  

How Does a Hosted Phone System Work?

A hosted phone system uses a VoIP connection to access the server where your PBX is hosted. Essentially, you pay a monthly fee to be able to connect to the server. The server uses a SIP trunk to manage both incoming and outgoing calls. 

When you receive an incoming phone call, the following happens:  

1. Your hosted PBX system receives a call. 
2. The call is converted into digital packets, which are sent using a VoIP connection. 
3. The call is routed to your phone (which might be your office phone, laptop, tablet, etc.) from the hosted PBX. 
4. When you answer your phone, the digital packets are converted back into voice data. The connection between you and the caller is established, and the conversation can begin. 

It might sound a little complicated, but this process happens in a matter of seconds. Sound quality is just as good as, if not better than, a call on a traditional landline. 

Benefits of Using a Hosted Phone System

If you’re considering converting to hosted phone service, you’ll be happy to hear about the benefits of a hosted PBX. In fact, cloud-hosted phone systems have many features that a traditional phone system just can’t support. Here are some of the top benefits of using a hosted phone system:

• Cost savings:

With a traditional PBX system, you need a large amount of capital to get started. From hardware to installation, setup is expensive. Additionally, the complex nature of the equipment requires a dedicated IT department. With hosted PBX, you can use hardware you already own to get started. Additionally, your service provider maintains the servers hosted in its data centers, cutting down on another cost. With all factors considered, hosted PBX is significantly more affordable than a traditional phone system. 

• Ease of installation:

Installing a traditional PBX system is labor-intensive and requires skilled professionals, which also means it’s expensive. But a hosted phone system can be set up in a matter of minutes and doesn’t require expertise. In fact, it’s all done online. No one has to come to your office for you to get started. 

• Scalability:

Traditional PBX makes installing new lines or reducing the number of lines difficult. In turn, this might force you to pay for more lines than you need in the hopes that you will someday grow. Luckily, hosted phone systems are incredibly easy to scale up or down. Pay only for the lines you need now, nothing more. And when you’re ready to add another team member, all you have to do is log in to your provider’s platform and add the line. 

• Security:

With the prevalence of hackers and data breaches today, security is of the utmost importance. One popular scheme used against businesses is called social engineering. Hackers call your business, pretending to be your service provider, and ask for information that might allow them to take over your system. Most VoIP providers, however, use identity management tools to protect you from hackers. Plus, calls are well-encrypted so that hackers can’t listen in to steal sensitive information. 

• Flexibility:

Nowadays, many teams are fully remote. Using a hosted phone system allows your team to work from wherever they are. 

• Unified communications platform:

A unified communications platform is one tool for all of your communication needs. Whether internal chats between coworkers, video conferences with clients, or phone calls with customers, hosted phone services let you do it all in one place. 

Cons of Using a Hosted Phone System

Truthfully, there aren’t a whole lot of disadvantages of using a hosted phone system. But we’ve got to do our due diligence and explain the possible cons of a hosted telephone system.

One drawback is the need for a reliable internet connection. This might not be an issue if your workforce is all in one place. You’ll get gigabit speeds with typical business internet, while VoIP only needs 100kbps upload and download bandwidth per line. However, a huge number of businesses have made the switch to part-time or full-time remote work. If your employees are remote, you’ll need to make sure each one has a strong enough internet connection for your hosted phone service. 

The biggest disadvantage to hosted phone service is probably the need for power. In order for your phone system to work, both the network and the phones need to be connected to power. In the case of power outages, you’ll be unable to make and receive calls. 

Hosted Phone System Features You Should Have

When trying to decide between VoIP providers, you’ll want to make sure your hosted phone system has these features. 

• Voicemail to email transcription:

Voicemail lets your customers leave messages when you can’t answer the phone. But sometimes the sheer volume of voicemail you receive makes it hard to keep on top of it all. Voicemail transcriptions sent to your inbox allow you to move through messages quickly while also making sure you don’t miss anything. 

• Video conferencing:

With so many offices going remote, video conferencing is more important than ever. Many hosted phone systems offer video conferencing tools within the system so you don’t have to use third-party software to meet with your team.  

• Reliable network:

One of the most prevalent concerns for those switching to hosted phone service is the reliability of cloud technology. Fortunately, VoIP connections are as reliable and secure as copper phone lines. When picking your provider, one metric to look at is guaranteed uptime. If the guaranteed uptime is less than 99%, you’ll want to move on to a different provider. 

• Call recording:

Call recording allows you to listen to employee calls with customers after the fact. This can be used for training employees, reviewing performance, and keeping an eye on customer interactions. 

• Auto attendant:

Auto attendant, also called Interactive Voice Response (IVR) routes calls to the appropriate agent. Some auto attendants have customers press a button to be routed to a specific department. Others use voice activation technology to do the same. This saves time for your employees and allows your customers to be helped more efficiently. 

• Crystal clear call quality:

If you’re worried that a call quality suffers with a hosted phone system offers, think again. Even though VoIP-based phone systems don’t use wired connections, the call quality is often even better than that of traditional phone service. 

• Business app integration:

The ability to integrate third-party apps like Zoom, Slack, or Salesforce into your hosted telephone system allows for greater efficiency. Rather than switching between apps for different tasks, your employees can do it all in one place. 

• Messaging:

You’ll want to make sure your hosted phone system comes with internal SMS and MMS capabilities. Gone are the days where the only way to communicate is in person or over the phone. Internal messaging allows coworkers to quickly communicate without leaving their desk or disrupting the flow of their work.

The Right Provider for Your Hosted Phone System

Now that you understand what a hosted phone system is and how it works, you might be ready to find a provider for your business. There are a lot of great providers to choose from. If finding a provider on your own seems overwhelming, OneStop Communications can help. We work with the best providers in the country, including Nextiva, ATT, Verizon, Vonage, and more. We’ll help you find the right provider with the right features for your business telecom needs. We’re based in Atlanta and serve the entire southeast including Miami, Birmingham, Orlando, and more. Get started with your free quote today!

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