23 Nov 2023

In the digital age, where seamless communication is the backbone of successful businesses, the hosted phone system emerges as a revolutionising technology in the telecom industry. Imagine a business phone solution that operates effortlessly over the internet, managed by expert third-party providers. That's precisely what a hosted phone system offers. Its state-of-the-art communication solution eliminates the need for heavy on-site equipment and expensive servers.

Utilising cutting-edge Voice over Internet Protocol, a VoIP technology, hosted phone system transmits calls over internet connections, paving the way for unparalleled flexibility and substantial cost savings. This innovative approach allows businesses to enjoy a wide range of features, ensuring efficient and reliable communication without the complexities of traditional phone systems.

This blog is a comprehensive guide that will provide yyou with a complete understanding of hosted phone systems, its features, how it works, benefits, pros and cons and the best pricing offered from some of the most reputable providers.

What is a hosted phone system?

A hosted phone system is a cutting-edge business telephone solution that operates over the internet and is managed by a third-party provider. Unlike traditional phone systems that necessitate maintaining servers and equipment within your office premises, a hosted phone system leverages off-site data centres or cloud-based platforms to host hardware and applications.

By utilising VoIP technology, calls in a hosted phone system are transmitted over internet connections, eliminating the need for physical phone lines. This setup not only streamlines communication but also eradicates the requirement for expensive on-site equipment and servers, leading to substantial cost savings for businesses in terms of maintenance and equipment expenses.

Businesses opt for hosted phone systems to access advanced Hosted VoIP features to meet their business communication needs with using various industry terms such as hosted telephony, VoIP hosted phone system, cloud-based PBX and hosted PBX etc. This modern solution provides unparalleled flexibility, scalability, and reliability, making it an ideal choice for businesses looking to enhance their communication capabilities without the burden of managing complex on-premises infrastructure.

What is a hosted small business phone system?

A hosted small business phone system is an interchangeable term used for cloud-based communication solutions for small businesses, where a third-party provider manages and hosts the phone system infrastructure off-site. Instead of investing in on-premises equipment, businesses use internet-based technology for their phone services. Hosted VoIP small business phone system approach offers cost savings, scalability, and a range of features tailored to the needs of small businesses providing efficient and reliable communication solutions.

Types of hosted phone systems

Cloud hosted phone systems

Cloud hosted phone systems operate entirely in the cloud, eliminating the need for on-site hardware. They offer scalability, flexibility, and seamless integration with various communication tools, providing businesses with cost-effective solutions.

SIP trunking

SIP (Session Initiation Protocol) trunking enables the connection of an on-premise phone system to the internet, allowing for the transmission of voice and multimedia over IP networks. It offers a more efficient and scalable alternative to traditional phone lines, facilitating cost savings and improved communication capabilities for businesses.

Difference between traditional and cloud based hosted phone systems

The choice between traditional and cloud based hosted phone systems marks a significant shift in how businesses manage their communication infrastructure. On-premise systems, as the name suggests, involve physical hardware installed at the company's location, requiring maintenance and updates on-site. In contrast, hosted phone systems leverage cloud technology, allowing businesses to access advanced communication features remotely without the need for physical infrastructure. The key distinction lies in where the system is located and how it is managed, as on-premise systems demand in-house maintenance, while hosted systems offer flexibility and scalability through cloud-based services.

Below is a comparison table that clear insight on the difference between the traditional or on-premise phone system and hosted phone system:

Traditional On-Premise Phone System Hosted PBX & Cloud Based Phone System
  • Physically located at the user's site
  • Hosted in the cloud by a third-party provider
  • Requires upfront hardware investment and maintenance
  • No upfront hardware costs, provider handles maintenance
  • Offers full control and customisation
  • Relies on provider for updates and feature additions
  • Scalability limited by physical infrastructure
  • Easily scalable, accommodating business growth
  • Higher initial costs, lower ongoing fees
  • Lower initial costs, predictable monthly fees


How does a hosted VoIP solution work

Your hosted phone provider that offers a cloud PBX (Private Branch Exchange). This provider connects you to their secure off-site data centres, ensuring reliable services. The hosted PBX acts as the intermediary, facilitating smooth communication.

  • When an incoming call is received, it is directed to your hosted PBX system, which acts as the central hub for your phone communications.
  • The hosted PBX system then converts the call data into digital packets, a process essential for VoIP (Voice over Internet Protocol), the technology powering hosted phone systems. These digital packets are designed to be transmitted efficiently via the internet.
  • The PBX system intelligently routes the incoming call to your office's designated desk phone.
  • Upon reaching your desk phone, it rings, indicating an incoming call. When you answer, the digital packets are swiftly converted back into clear voice messages, establishing a seamless connection between you and your caller.

Why do businesses need a hosted VoIP phone system

  • Businesses benefit from various hosted telephony and hosted VoIP phone solutions, allowing for flexibility and scalability in communication.
  • Additionally, hosted voice systems and hosted communication services ensure efficient and reliable interactions.
  • Further, the use of cloud-based phone systems and hosted IP phone systems not only simplifies communication processes but also reduces costs associated with traditional phone systems, making hosted phone systems a popular choice among businesses today.

10 essential hosted phone system features you need

Hosted Phone System Features

1. Call quality

  • Hosted VoIP phone systems offer clear calls comparable to or even better than traditional phone lines.
  • Call quality remains excellent despite not being wired connections.
  • Suitable for long-distance communication, maintaining clarity and quality even during extended conversations.

2. Real-time reporting and analytics

  • Provides rich individual, team, and business-wide analytics in real time.
  • Offers comprehensive metrics tracking, including average speed to answer, call volumes, customer wait times, call abandonment rates, and more.
  • Custom-built dashboards from providers like Wavetel business offer easy access to historical and real-time data for performance analysis.

3. Video conferencing

  • Enables face-to-face communication for globally dispersed teams.
  • Integrated within Unified Communications as a Service (UCaaS) solutions, eliminating the need for third-party tools.
  • Allows seamless transitions from phone calls to instant messaging to video meetings.

4. Interactive voice response (IVR) system

  • Acts as a virtual receptionist, allowing callers to interact with pre-recorded menus.
  • Routes callers to the right department or person, reducing wait times and improving first-call resolutions.

5. Automatic call routing

  • Utilises preset routing rules to distribute calls efficiently.
  • Options include skills-based routing, least occupied agent routing, time-based routing, and rotary routing.
  • Routing rules can be adapted based on staffing levels, customer demand, and seasonality.

6. Call recording

  • Records calls for training, compliance, and reference purposes.
  • Call recording enables call centres and customer support teams to provide exceptional service by reviewing customer interactions for quality assurance and training purposes.
  • Allows agents to take detailed notes and revisit recorded discussions, ensuring accurate information retrieval and addressing customer queries effectively.
  • Recorded calls serve as valuable training resources, enabling agents to learn from successful interactions and enhance their communication skills.
  • Enables supervisors to monitor calls, assess agent performance, and maintain service quality standards.
  • Provides a clear record of conversations, promoting accountability among agents and fostering a customer-centric approach.

7. Voicemail to email transcriptions services

  • Transcribes calls and voicemails, sending searchable transcripts to email for easy access.
  • Voicemail-to-email transcription allows users to read message contents if they cannot listen to the voicemail.

8. Powerful integrations

  • Integrates with essential business software, enhancing workflow optimisation.
  • Unifies applications such as CRM, collaboration, and productivity tools.
  • Compatible with popular platforms like Salesforce, Microsoft Office 365, Pipedrive, HubSpot, Zoho, Bitrix24 and Google Workspace, streamlining data flows and functionalities.

9. Security assurance and reliability guarantee

  • Hosted phone systems, specifically VoIP connections, are as secure, if not more, than traditional wired setups.
  • Opt for a reputable providers like Wavetel Business, Nextiva, Ringcentral and Vonage with 99.999% uptime, ensuring consistent and reliable service.
  • Connections made through secure carrier-grade data centers, minimising the risk of hacking and eavesdropping on phone calls.
  • Businesses can operate confidently, knowing their communications are protected and reliable in a hosted phone system environment.

10. Unified communication apps

  • Provides employees with powerful mobile apps for on-the-go communication.
  • Mobile apps turn smartphones, tablets, and laptops into fully functional business phones.
  • Offers advanced call management features, ensuring consistency for employees working remotely.

Hosted phone systems: Pros and Cons


Quick deployment

Hosted phone systems offer straightforward setup processes, allowing businesses to get up and running swiftly without lengthy installation timelines.

User-friendly interfaces

Intuitive interfaces make configuration and management easy, reducing the complexity of system setup for businesses.


Lower initial investment and reduced maintenance costs, making it budget-friendly for businesses.


Easily adaptable to changing business needs, allowing seamless expansion or contraction of services.


Accessible from any location with internet connectivity, enabling employees to work from various locations.


Offers advanced features like video conferencing, call recording, and integration with business applications, enhancing productivity and customer interactions.


Hosted phone systems often feature built-in redundancy, ensuring continuous operation even in case of hardware failure or network issues.

Data backups

Providers offer regular data backups, safeguarding essential communication data, and facilitating quick recovery in the event of a disaster.

Automatic updates

Providers handle system updates and maintenance, ensuring businesses always have access to the latest technology.


Dependence on internet

Relies heavily on a stable internet connection; disruptions can impact communication.


Hosted phone systems in the cloud are vulnerable to cyberattacks. Businesses trust providers to safeguard data through robust security measures and protocols.

Benefits of Hosted Phone System

Hosted Phone System Benefits
Benefits of Hosted Phone System
Quick Deployment
  • Swift Setup
  • Minimal downtime
User-friendly Interfaces
  • Intuitive User Interface
  • Easy Management
  • Lower Initial Investment
  • Reduced Maintenance Costs
  • Budget-friendly
  • Adaptable to changing needs
  • Seamless expansion of services
  • Any location, any device, anytime
  • Highly supportive for remote work
  • 24/7 connectivity with team and clients
  • Video conferencing
  • Call recording
  • integration with CRM and other business applications
  • Enhancing productivity and customer interactions.
  • Built-in redundancy for continuity
Data Backups
  • Regular data backups
  • Quick recovery
Automatic updates
  • Automated system updates and maintenance
  • Ensuring access to the latest technology


Who should use hosted phone systems

Entrepreneurs and startups

Provides essential features without heavy upfront investments, ideal for new businesses.

Small to medium businesses

Ideal for SMBs looking for cost-effective, feature-rich communication solutions.

Multi-location businesses

Ensures unified communication for companies with multiple offices or branches.

Remote workforces

Suited for companies with dispersed teams needing seamless communication from various locations.

Companies embracing remote work

Facilitates seamless communication for remote and distributed teams.

Businesses scaling quickly

Easily adaptable to changing needs, accommodating growth without infrastructure constraints.

6 Best Hosted Phone System Providers for Small businesses

Compare best pricing for small to medium size businesses SMBs 

As exploring the popular hosted phone system providers, below is a comparison table of their basic plans, monthly costs, and additional features. This table will give you a quick insight of finding the best fit for your business communication needs.


Provider Features Monthly Price
Wavetel Business
  • Unlimited UK calling and text messaging
  • Call queuing and routing, call recording, Voicemail-to-email
  • Integrations with popular CRMs
  • Desktop and softapp
  • 24/7 customer support
  • Dedicated account manager and more VoIP features.
Starts from £4.99 Get Best Offer Today
  • Call queuing and routing, call recording and monitoring
  • Virtual faxing
  • Unlimited calling within the US and Canada
  • Integrations with popular CRMs
  • Mobile and desktop apps
Starts from £16.99
  • AI virtual assistant
  • High-definition call quality,
  • Free video conferencing
  • Unlimited calling and text messaging on all plans
Starts from £12.99
  • Auto attendant, Hold music
  • Video conferencing, Audio-only conferencing
  • Mobile app and desktop app
  • Advanced IVR systems, Caller ID
Starts from £15.99
  • Unlimited calling in the US and Canada
  • Auto attendant, Music on hold
  • Voicemail, Team messaging
  • Hot desking, Call queues
Starts from £19.99
  • Unlimited outbound calls
  • 50+ Integrations and API access
  • Access to API developer support
  • Call recording and monitoring
Starts from £24.99
Note: As prices and features may change, visit the provider's website for the latest and accurate information.


Ready to switch to Wavetel’s hosted phone system?

Switch the future with a hosted phone system, leaving behind the days of tangled copper wires and outdated technology. Ensure your new phone service provider offers the advanced features your business requires, eliminating the hassle of dealing with costly and obsolete phone systems that dominate your office space.

Wavetel Business provides a cutting-edge cloud phone system equipped with all the essential features, starting at just 4.99 per user per month. Don't miss this incredible opportunity to upgrade your communication infrastructure. Schedule a demo today and revolutionise the way your business communicates.

Final thoughts

From its swift deployment and user-friendly interfaces to its cost efficiency and scalability, this VoIP hosted phone system caters to the diverse needs of businesses, from startups and small enterprises to multi-location corporations and remote workforces.

The benefits of a hosted phone system are not just limited to advanced features like video conferencing and call recording; they extend to ensuring continuity through built-in redundancy and reliable data backups. While businesses navigate the challenges of a digital world, the hosted business phone system becomes a reliable partner, facilitating seamless communication and fostering collaboration across teams and locations.

As you consider the switch to a hosted phone system, consider reputable providers like Wavetel Business, RingCentral, Vonage, Nextiva, 8x8 and Aircall . Among these, Wavetel Business stands out as the best affordable hosted phone system provider, offering competitive pricing while ensuring you get the best value for your investment. Embrace the future of communication, free yourselves from outdated technologies, and elevate your business to new heights of connectivity and productivity. Schedule a demo today and witness the transformative power of a hosted phone system tailored to meet your unique business needs.


Boost Productivity Without Breaking the Bank – Try Our Affordable Cloud Phone System!

Don't miss out the Advantages of a Cloud-Based Communication System, Get Wavetel Business Today.