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What is the Difference Between a Hosted PBX and VoIP?
July 4, 2019

What is the difference between a Hosted PBX and VoIP?

Telecoms can be complicated; there are so many acronyms and names for different things. One of the most common misconceptions is that VoIP and hosted PBXs are the same thing - they're not.

Hopefully this article will explain the difference between the two and help you decide if a hosted PBX is best for your business.

What is a Hosted PBX?

Normally, businesses have an on-premise PBX. This means that there is a literal 'box-on-the-wall' that all of your telephones plug into. A hosted PBX uses the cloud, instead of a box-on-the-wall. This can dramatically reduce your businesses running costs.

VoIP Phone system diagram
Diagram of a Hosted PBX

Our diagram above shows you, in a brief outline, how a hosted PBX works. It uses your broadband connection to connect your phones to the cloud. In this magic cloud, there is a phone system that acts as the same as a box-on-the-wall.

Whats the point in a hosted PBX?

Great question. Hosted has a myriad of benefits. These benefits include:

  • No maintenance
  • Cheaper cost per phone
  • Flexible packages

A hosted PBX is a great way to save money. They're more flexible and cheaper than the traditional PBX; making them a great alternative, especially for smaller businesses.

What is VoIP?

VoIP stands for Voice Over IP and is the method for transmitting voice calls using 'the internet'. These voice calls use IP telephony to make their journey from one phone to another. VoIP is most often uses with SIP Trunks, and works like so:

VoIP Diagram
Diagram of VoIP

You can see from our incredibly handy diagram that VoIP sits on top of your existing broadband connection; using that to make and receive calls. VoIP is often branded as a 'hosted VoIP' or a 'hosted VoIP PBX'. This is because a hosted PBX uses a VoIP connection when making and receiving calls.

Why do I want VoIP?

Well, 'cos it's great. Businesses using VoIP have less telephone lines; cutting their running costs. They also have reduced call charges as VoIP often comes with call packages (we offer 5000 minutes). VoIP will also help prepare your business for the 2025 ISDN switch off.

What is the difference between a Hosted PBX and VoIP?

A hosted PBX is a cloud-based phone system; whereas VoIP is the method for making calls. A hosted PBX uses VoIP in it's operation. They both work in unison together as a platform and method.

Combining these two modern telecom technologies is a great way to increase business efficiency and cut costs. It allows for a more flexible telephony environment, with a custom built system and low running costs.

Still confused? Check out our Telecoms Jargon Buster.

If you're interested in upgrading to a hosted PBX or you would like to know more about VoIP, get in touch for a free, no obligations chat on 01934 882200 or email

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