You are currently viewing Understanding the Technology Behind Hosted Phone Systems
  • Post category:Phone Systems
  • Post last modified:10th December 2023
  • Reading time:9 mins read

In the ever-evolving world of business communications, hosted phone systems (also known as cloud-based phone systems or UCaaS) have emerged as a compelling solution for organisations of all sizes. These innovative systems offer a range of benefits, including scalability, cost-effectiveness, and enhanced flexibility. However, understanding the technology behind hosted phone systems requires a grasp of key concepts and protocols.

SIP Trunking: The Foundation of Hosted Phone Systems

At the core of hosted phone systems lies SIP trunking, which stands for Session Initiation Protocol. SIP is an open-standard signaling protocol that enables the establishment, management, and termination of multimedia communications sessions over IP networks. In the context of hosted phone systems, SIP trunking provides a secure and reliable connection between your business’s phone system and the public switched telephone network (PSTN), the traditional phone network.

How SIP Trunking Works

When a call is placed through a hosted phone system, the call is routed through the SIP trunk to the PSTN. The PSTN then connects the call to the recipient’s phone number. Upon completion of the call, the SIP trunk sends a termination message to the hosted phone system, notifying it that the call has ended.

Benefits of SIP Trunking

SIP trunking offers several advantages over traditional analog phone lines, including:

  • Scalability: SIP trunks can accommodate varying call volumes, enabling businesses to expand or contract their communications infrastructure as needed.
  • Cost-effectiveness: SIP trunks typically cost less than analog phone lines, offering significant savings over time.
  • Flexibility: SIP trunks can be easily provisioned and provisioned remotely, enabling businesses to manage their telecommunications infrastructure from anywhere.
  • Improved Quality of Service (QoS): SIP trunk providers offer various QoS features to ensure smooth and reliable call quality.

Components of a Hosted Phone System

A hosted phone system consists of several key components that work together to provide comprehensive communication solutions:

  1. Hosted Phone System Provider: The provider manages the underlying infrastructure and software of the hosted phone system.
  2. SIP Trunk Provider: The provider connects your business’s hosted phone system to the PSTN through SIP trunks.
  3. Phone Devices: The physical or virtual phone devices used to make and receive calls. These devices can range from traditional desk phones to mobile devices and softphones.
  4. Management Portal: A web-based portal provided by the hosted phone system provider to manage user accounts, configure settings, and monitor usage.

Benefits of Hosted Phone Systems

Beyond SIP trunking, hosted phone systems offer a multitude of benefits for businesses:

  • Reduced IT Infrastructure Costs: Hosted phone systems eliminate the need for on-premises hardware, reducing hardware acquisition, maintenance, and support costs.
  • Enhanced Productivity: Hosted phone systems provide unified communications features, such as voicemail, call forwarding, and call recording, which can streamline business processes and improve employee productivity.
  • Improved Customer Experience: Hosted phone systems can enhance customer service by providing features like call recording, call queues, and automatic call distribution.

A wide range of providers offer hosted phone systems, catering to businesses of all sizes. Some of the most popular providers include:

  • Pathway Telecom
  • Microsoft Teams
  • RingCentral
  • 8×8

How to Choose a Hosted Phone System

When choosing a hosted phone system, businesses should consider factors such as:

  • Number of Users: The number of users will determine the required call capacity and feature set.
  • Desired Features: Consider the specific features that align with the business’s communication needs.
  • Scalability: Ensure the system can accommodate future growth and expansion.
  • Support: Evaluate the provider’s customer support offerings and track record.
  • Cost: Compare pricing plans and consider long-term costs.


Hosted phone systems have emerged as a powerful and flexible solution for businesses of all sizes. By understanding the technology behind hosted phone systems, businesses can make informed decisions about their communication needs and select the right solution to enhance their productivity, customer experience, and overall communication efficiency.

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