04 Dec 2023

Modern communication has become the nucleus of every successful business operation. The ever-evolving landscape of technology, traditional communication limitations have given way to a more revolutionising telecom innovation. That innovation is hosted PBX , a transformative approach to voice communications managed and operated by service providers. But what is hosted PBX?

This blog is a guide which not only explains what Hosted PBX means or Hosted PBX features but also the interchangeable terms like VoIP hosted PBX, cloud PBX, hosted virtual PBX, hosted phone system, SIP trunking or Hosted IP PBX. Further, you will come to know the on-premises phone limitations with hosted PBX phones and also the hosted PBX system benefits, the platform and businesses that benefit from PBX as a service. Additionally, How Wavetel Business’s hosted phone system provides a competitive edge to businesses of any size or geographical location. So lets start this learning journey to understand the core of Hosted PBX phones by peeling off the layers.

What is Hosted PBX

A hosted PBX is a type of private branch exchange (PBX) managed and operated by a service provider. It enables businesses to conduct voice communications, both incoming and outgoing, over the internet. This technology has gained popularity as a modern substitute for traditional PBX systems, which rely on copper wires and landline phones.

What is Hosted IP PBX

A hosted IP (internet protocol) PBX is an interchangeable term used for a hosted Phone system which uses IP for communication where the entire PBX hardware and feature are hosted and delivered by a service provider like Wavetel Business.

Instead of relying on traditional telephone lines, the hosted PBX phone system uses the internet to facilitate voice communication. Overall, hosted PBX enables businesses to make and receive calls using Voip (Voice over Internet Protocol) technology. VoIP gives greater flexibility, scalability, and cost-effectiveness compared to traditional PBX systems. With a Hosted IP PBX, businesses can access advanced features like voicemail, call routing, and conferencing without the need for on-premises PBX equipment.

Benefits of hosted PBX phone systems

The shift from on-premises PBX to hosted VoIP PBX is gaining traction among businesses, driven by a range of compelling benefits. Here's a breakdown of the top advantages that prompt businesses to adopt hosted IP PBX solutions, particularly appealing to startups:

1. Affordable setup

  • Eliminates upfront expenses for hardware, licensing, and setup.
  • Requires only VoIP phones and software, reducing initial investment significantly.

2. Ongoing free maintenanc

  • Cloud-based hosted PBX eliminates the need for on-site maintenance.
  • Service providers address issues, relieving businesses of IT staff or administrator involvement.

3. Advance features

  • Feature-rich VoIP hosted PBX systems surpass basic calling functionalities.
  • advanced hosted phone system features include call routing, queuing, phone menus, IVR, conference calls, voicemail, and call recording.

4. Flexibility of customisation

  • Easy and cost-effective adjustment of communication settings.
  • Employees can configure features like call forwarding, routing, voicemail, call conferencing and business SMS.

5. Operational saving costs

  • Offers cost savings through flat per-minute or monthly rates.
  • Avoids paying for unused phone lines, optimising operational expenses.
  • Low international rates contribute to overall cost-effectiveness.
  • Diminishes maintenance costs, as service providers handle troubleshooting and upkeep.

6. Smoothly scalable

  • Facilitates easy addition of numbers without significant time or cost implications.
  • Allows businesses to scale communications up or down effortlessly.

7. Minimal downtime

  • Utilises multiple VoIP data centers, preventing downtime.
  • Seamless connectivity by rerouting phones to alternate data centers in case of a failure.

8. Multi-location connectivity for remote workers

  • Enables communication across different business locations using VoIP.
  • Remote workers can connect through mobile apps or laptop software.

Limitations of traditional PBX systems

Traditional PBX systems faces limitations, particularly when compared to the range of compelling benefits of hosted PBX solutions:

Upkeep and maintenance

On-premises PBX systems require businesses to manage their upkeep and maintenance. Further, it demands specialised IT staff for problem-solving and troubleshooting within the PBX system.

Higher setup costs

Setting up a traditional PBX involves significant upfront costs for hardware and phone lines.

Can be financially burdensome, making it less cost-effective, especially for small businesses.

Advance calling features

Traditional PBX systems offer a rudimentary phone call system lacking advanced features. Adding advanced phone features like auto attendants, voicemail greetings, or conference calling may be challenging.

Limited scalability capacity

Traditional PBX systems often support a restricted number of desk phones. It's less cost-effective for large or scaling businesses due to the expenses associated with increasing or upgrading connected phones.

Restricted connectivity for remote employees

In an era of increasing remote work, traditional PBX systems struggle to connect on-site and remote employees seamlessly. Unable to automatically route incoming calls to the devices used by remote and mobile workers.

Comparing hosted PBX vs traditional PBX

Traditional PBX systems, alternatively referred to as on-premises PBX or analog PBX, operate using physical hardware, including copper telephone wires, and on-site software installed at a company's office. In the traditional PBX setup, when a call is made, the on-premises PBX establishes a connection between the landline and the Public Switched Telephone Network (PSTN).

On the other hand, hosted virtual PBX employs the internet, typically utilising VoIP technology, to transmit voice traffic. Businesses utilising virtual PBX service often deploy VoIP phones (IP phones) or softphones instead of traditional desk phones with individual extensions. The infrastructure of virtual PBX VoIP is entirely maintained by the service provider, relying on an internet connection rather than traditional copper wires and the PSTN.

Below is a hosted PBX comparison table with traditional PBX that outlines the key differences:

Features Traditional PBX Hosted PBX
Cost Structure Costs per user No upfront costs
Internet Dependency No use of the internet Modest use of network bandwidth
Calling Features Basic calling features Advanced calling features
Maintenance Costs Unexpected maintenance costs No maintenance
Infrastructure Management You manage the infrastructure Managed by a third party or based on Cloud
Hardware/Software On-Site Requires additional hardware/software No additional on-site hardware/software needed
Data Transmission

Copper telephone wires or  through Public Switched Telephone Network (PSTN)

Moves through the cloud over the internet
Flexibility and Scalability Beneficial for businesses with room to grow Ideal for lean startups and scalable business needs
Device Compatibility Requires specific IP desk phones Compatible with various devices, including softphones and mobile apps
Configuration Changes Hard-coded dialling prefixes Flexible and easily configurable setting
Updates and Learning Curve Rarely receives updates, steep learning curve Regular updates, user-friendly interface
Long-Distance Calls Restricts long-distance calls Offers flexibility and ease in long-distance calls


What is a virtual PBX

The terms hosted PBX and virtual PBX are often used interchangeably, but this isn't entirely accurate from a technical perspective. In reality, virtual PBX systems represent just one element within the broader framework of hosted PBX. For instance, a virtual PBX system might manifest as an auto attendant, delivering automated interactive voice response (IVR) and call routing functionalities as part of the overall hosted PBX infrastructure.

How does hosted PBX work?

A virtual PBX comprises three essential components:

  1. The hosted PBX provider
  2. A VOIP phone
  3. An Internet connection

Your phones establish a connection to the PBX host through the Internet, maintaining an open line for both incoming and outgoing calls.

Hosted PBX software operates by replacing your traditional phone with cloud phone services. All calls, whether inbound or outbound, are directed through the Hosted PBX services. The service provider oversees your entire phone system, and in the event of a data center outage, calls are seamlessly redirected to alternative data centers, ensuring continuous and uninterrupted phone system functionality. A dedicated team of professionals at the hosted PBX provider works tirelessly to deliver efficient and secure phone services.

With the configuration and maintenance handled by the service provider, you and your employees simply need to log in to online portal like Wavetel's HUB UC to conduct calls over the Internet. Any necessary adjustments to settings can be made instantly through the online portal with just a few clicks, streamlining the process for optimal user convenience.

What is the difference between VoIP and hosted PBX

A hosted PBX functions as a complete phone system, while Voice Over Internet Protocol (VoIP) serves as the underlying technology for making calls. Additionally, VoIP extends beyond phone systems and finds application in various telecommunication services, such as video conferencing. VoIP service providers like Wavetel Business offer comprehensive cloud-based business communication solutions, combining PBX functions with telephony and communication features, known as business VoIP phone systems.

Features VoIP Hosted PBX
Functionality Serves as the underlying technology for making calls. Functions as a complete phone system, encompassing call management and other features.
Scope of Application Extends beyond phone systems to various telecommunication services. Primarily designed as a comprehensive phone system, with a focus on business communications.
Usage in Telecommunication Applies to various services, including voice calls, video conferencing, etc. Primarily designed for voice communication, call routing, and associated phone system features.


Hosted PBX platform: Choosing the right path

To integrate a hosted PBX solution into your business telephony system, you have two primary options, depending on your existing PBX setup. Choosing between Cloud PBX and SIP Trunking PBX depends on your current PBX setup.

Cloud PBX

  • A widely embraced hosted PBX solution.
  • VoIP phones connect to an external cloud system, typically hosted in a VoIP data center by a service provider.
  • Requires no physical on-premises PBX server.
  • Entirely managed by the provider, offering simplicity and scalability.

SIP trunking PBX

  • Ideal for businesses with a SIP-enabled IP PBX server.
  • Connect your on-premises PBX system to the internet through a SIP trunk.
  • Facilitates integration of communications or virtual PBX software with existing on-premises infrastructure.
  • Suitable for businesses with legacy PBX systems looking to transition gradually to a hosted PBX replacement.
  • May involve on-site maintenance, unlike the maintenance-free cloud PBX.

Cloud PBX Vs. SIP trunking

The decision between a Cloud PBX system and SIP trunking totally depends on your current infrastructure. Below is a comparison table that provides an overview of the distinctions to assist you in making the best option:

Aspect Cloud PBX SIP Trunking
Low Setup Costs Low setup costs Low setup costs as long as you already have on-premises PBX equipment.
Maintenance Responsibility Maintenance is handled by the cloud phone system provider At least some maintenance is handled by your IT
Ideal Business Size Best for small businesses Best for larger businesses
Security Dependency Security is dependent on the cloud phone system provider’s security protocols Very secure infrastructure


Who benefits from hosted PBX

Hosted PBX solutions cater to the specific needs of various business scenarios. Hosted PBX solutions benefit startups, call centers, remote workers, and businesses with multiple offices by providing cost-effective, scalable, and feature-rich communication systems tailored to their specific operational needs.Here's how different businesses benefit from these business hosted PBX services:


  • Benefit from low upfront costs.
  • Enables rapid scalability as the business grows.
  • Allows quick and cost-effective adjustments, crucial for dynamic startup environments.
  • Smooth relocation without disrupting phone system access.

Call Centers

  • Quick and cost-effective setup for small call centers.
  • Utilises advanced features like IVR, direct routing, and auto attendant.
  • Larger contact centers can explore seamless integration with hosted call center PBX solutions.

Remote Workers

  • Enhances call forwarding for remote employees.
  • Streamlines communication for a mobile workforce.
  • Provides a professional and efficient way to manage calls, especially for fieldwork scenarios.

Multiple offices

  • Cost-effective solution for businesses with multiple offices, especially across different countries.
  • Efficient handling of long-distance calls.
  • Simplifies communication management, fostering connectivity across dispersed office locations.

How much does hosted PBX cost?

The cost of hosted PBX (Private Branch Exchange) services is based on several factors, including the provider’s pricing plans, the features included, the number of users, and any additional services or add-ons you may require.

Per-user pricing

Many hosted PBX providers charge on a per-user basis. The cost per user per month can range from $10 to over $30, depending on the features offered.

Features and add-ons

The more advanced features you require, the higher the cost may be. Basic plans typically include standard features like voicemail, call forwarding, and auto-attendants, while more advanced plans may include features like call recording, integrations with other software, and advanced analytics.

Number of extensions

The number of extensions or lines you need for your business will impact the cost. Some providers offer unlimited extensions, while others may have tiered pricing based on the number of users.

Contract terms

Some providers offer month-to-month contracts, while others may require an annual commitment. Contracts with longer terms may provide discounts.

Setup and installation fees

Some providers may charge a one-time setup or installation fee. Others include this cost in their monthly fees.

International calling

If your business makes a lot of international calls, check the international calling rates; hosted PBX proves significant for your business.


If your business is likely to grow, consider how easily the hosted PBX solution can scale to accommodate additional users.

How to choose a hosted PBX provider

Switching from a traditional PBX system towards a hosted PBX phone system requires choosing the right hosted PBX provider. There are numerous hosted PBX providers offering the best feature-rich VoIP PBX services at a more cost-effective pricing than traditional PBX setup. But before choosing among the best business hosted PBX providers, consider the following factors to ensure a seamless transition, cost-effectiveness, and reliable support for your business communications:


  • Evaluate setup costs, ensuring compatibility with your devices to avoid unexpected expenses.
  • Examine recurring costs, monthly fees, and rates to make an informed cost-effective decision.

Effortless installation

  • Assess the applications and software offered by Cloud PBX providers for managing business communications.
  • Ensure a seamless transition from traditional PBX to hosted PBX, guaranteeing user-friendly systems for you and your employees.

Advance features

  • Confirm that the provider offers the features you need, such as call forwarding or an auto attendant.
  • Explore the range of features provided by the hosted PBX and VoIP service, ensuring they align with your business

Customer support quality

  • Check customer reviews to assess the level of support provided by the hosted PBX provider.
  • Ensure reliable support for maintenance and upkeep tasks delegated to the provider.


  • Verify the security measures and practices implemented by the hosted PBX provider.
  • Check for security certifications like PCI, FISMA, and HIPAA to ensure robust telecom security.

How does Wavetel Business hosted PBX system offer a competitive edge to your business

Wavetel Business's hosted PBX system goes beyond the ordinary, providing your business with a competitive edge in the dynamic world of telecommunications. Lets see how our innovative hosted PBX phone systems can elevate your business:

Scalability for every stage

Wavetel Business understands that business needs evolve. Our hosted phone system for business is scalable, allowing your communication infrastructure to grow seamlessly with your business. Whether you are a startup, small business, call center or an established enterprise, our business hosted PBX adapts to your evolving requirements. Even this is the best hosted PBX small business solution that gives an opportunity to PAY-AS-YOU-GO to businesses working on tight budgets.

Global connectivity, local presence

With the capability to make local and toll-free calls in over 120 countries, Wavetel Business opens up a world of opportunities for your business. Reach clients, partners, and colleagues across the globe effortlessly, fostering international collaboration and expanding your market presence.

Efficiency through automation

The multi-level auto attendant feature streamlines communication processes, saving time and enhancing efficiency. Connect with employees swiftly and provide customers with self-service options, ensuring they get the information they need without unnecessary delays.

Versatile messaging options

In addition to unlimited calling, our hosted PBX system incorporates SMS messaging, offering a versatile means of communication. Stay connected with clients and colleagues through text, providing a convenient and efficient channel for quick updates and information sharing.

Unified workforce from anywhere

Wavetel Business brings your workforce together, regardless of geographical locations. Our hosted PBX system unifies your team, fostering collaboration and ensuring that everyone stays connected. Experience enhanced productivity and seamless communication across the organisation.

Tailored features for your business

Enjoy a range of features designed to meet the unique needs of your business. From call recording to advanced analytics, Wavetel Business's hosted PBX system empowers you with tools to optimise your communication strategy, giving you a competitive edge in the market.

Final thoughts: Is hosted PBX the future?

In the last five years, the workplace has undergone a great transformation. The pandemic compelled a rapid shift towards exclusive remote work, prompting numerous businesses to adopt hosted PBX solutions. This enabled their workforce to seamlessly receive calls and operate from the comfort of their homes. Those still using traditional PBX systems, such as hotels with room-specific phones, often find themselves tied up to these setups due to substantial upfront investments and ongoing financial commitments.

Softphones are set to replace traditional desk phones as the standard in modern offices. Call centers are shedding outdated PBX systems in favour of modern hosted solutions that seamlessly connect agents worldwide, facilitated by nothing more than a stable internet connection.

So here arises an important question: is your traditional PBX equipped to keep pace with this transformative landscape? The answer of this for businesses is clear that earlier adaptability to hosted PBX to secure and increase your business potential.


No Extra Spending, Just Extra Features – Discover Our Business Phone System!

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