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All About a Cloud or Hosted Phone System

Many small and large business owners have come across terms like “hosted phone system” or “cloud phone system. However, not everyone understands these terms.

If you also don’t know about this term, let us help you understand this term easily. The majority of the public consider the hosted phone system the same as the VoIP phone system. However, in reality, there are differences between both of them.

In this comprehensive article about the hosted phone system, we will discuss all of it and how it can benefit you in the growth of your business.

What is a Hosted Phone System?

It is a phone system that runs over the Internet that is not physically located at your company. VoIP providers host these phones and route calls with clients’ phone numbers. They do this using SIP, a virtual communication protocol. In other words, your phone system’s servers are located in a data centre rather than in your office. There will be no need for a costly hardware setup.

How Does a Hosted Phone System Work?

Unlike traditional phone systems, a hosted phone uses the internet to send and receive voice messages through the IP network. All the process happens through a router that connects the IP network to phone call traffic.

In an inbound call, your PBX system converts voice into digital packets, which are then connected to the IP network and the cloud host. From here, the caller is directed to the right person or department.

A connection with the caller is established through the conversion of digital packets into voice messages. Hosted phones require a stable internet connection and enough bandwidth since everything occurs online. In technical terms, bandwidth is the maximum amount of data you can transmit. To find out what your internet speed is, you can run an online test.

What are the advantages of a hosted phone system?

Hosting your phone system has a number of key advantages: some of them are below.

Cost savings

Due to the cloud phone system’s nature, hosted phone systems are also less expensive than other phone systems. It also costs less to maintain because cloud-based telephone systems use IP networks. You must contact an engineer if your traditional phone system fails, whereas a hosted telephony pbx system allows your staff to fix the issue internally without spending any additional money.

Easy installation

In contrast with traditional phone systems, hosted phone systems have an easy installation process, and their setup isn’t complex, expensive, or time-consuming. Furthermore, a cloud-based system can be installed and set up online, which means you don’t need to leave the comfort of your office. Additionally, it is less expensive, which is another benefit for small businesses.


It is an extremely expensive issue to experience a data breach, sometimes costing millions of dollars. You may be able to have your phone system mirrored and data were stolen, or hackers may just take over your whole system. The hosted phone system, however, automatically protects against cyber-attacks since it has identity management tools. In addition, hosted phone service providers use strong encryption to prevent hackers from listening to confidential business calls.


With a hosted phone system, you can pick up the phone wherever you are. Irrespective of whether you’re working remotely or away from the office, it doesn’t matter where you are. Users can access most hosted phone systems via mobile applications. Your employees will only have to download the app on their smartphones. It’s up to the communication service provider to route the incoming or outgoing calls to your device.

Unified Communications

A unified communication platform provides you with a single interface for communicating internally and externally. A hosted phone system can do more than just make phones calls. It can provide essential features for your business as well. As an example, we can use it for video conferencing or instant messaging. Furthermore, you don’t have to buy other tools that feature the same functionality, which also saves you money.

What Are Wonderful Features of Hosted Telephone Systems?

The following are some advanced features of a hosted phone system provider:

Voicemail to email transcription

Phone systems come with voicemail as an essential feature. You can have your voicemail messages transcribed and sent to your email inbox after they are received through the Voicemail to Email Transcription feature. Without listening to the voice message, you can determine what the call was about by reading the transcription.

Video conferencing

In a world where many companies work remotely, video conferencing allows teams to connect in a nearly physical way. You don’t have to install applications such as Google Meet, Skype, or Zoom to use a hosted phone system as a conferencing tool. If you choose a hosted phone system, make sure it offers this feature.

Call recording

Recorded calls help you analyze interactions between your customer support team and the customer. If you examine the tapes, you may discover that a rep is unable to close sales or that the customer’s engagement is too poor. Analyzing this data provides the information for making changes and improving customer interactions.


Many large and small businesses are concerned about the security of hosted phone systems. One aspect that should be scrutinized is the provider’s uptime. With Wavetel, you will get secure communications and 24/7 network monitoring that prevents and detects security issues immediately.

Real-time analytics

Traditional phone systems do not offer real-time call data, which is the main advantage of a hosted phone system. We collect data on inbound calls, voicemails, international calls, internal/external calls, missed calls, and total calls received. Businesses can use these statistics to track growth and make informed decisions.

What are the Challenges of a Hosted phone system?

Let’s explore the downsides of hosted phone systems now that you’re familiar with the benefits.

To function properly, a hosted phone system needs power and network infrastructure to connect to the Internet. It would be impossible to use the phone system effectively without a reliable power source.

In regard to the internet connection, we mentioned that it should be reliable and be able to handle a lot of traffic. In remote teams, each member is responsible for securing a stable connection and a backup plan.

Hosted phone systems, therefore, get power from two different sources: the internet and electricity.

One final downside of these systems is their vulnerability to cyberattacks, which don’t happen with traditional phones.

Conclusion about Hosted Phone Systems

The following are just a few of the amazing features and benefits of hosted phones. Traditional phone systems don’t require costly installation or maintenance.

  • It’s easy to set up a hosted phone system, and it can save you a lot of money
  • Hosted phones are a great choice if you want to offer remote workers some flexibility
  • The hosted phone requires a reliable internet connection and a battery.
  • With video conferencing, call recording, voicemail to email, and more, you can stay connected
  •  Your communication will be safe and secure thanks to these phone systems

PBX and VoIP services are included in hosted phone systems, making everything more efficient and cost-effective. It is important to assess your needs and compare them to what each provider has to offer in terms of features, security, and user-friendliness.


I am a passionate writer about the latest technologies and trends. I have been writing for 5 years. Most of my blogs are ranked at the top of search engines. I am also publishing a book that can be released in 2022.

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