Hosted Phone System: Features, Benefits, Pros & Cons

When a business grows, so too will its requirements for infrastructure like telephone line systems. The traditional way to provide phone services in an office environment, for example, is with a traditional PBX (private branch exchange) setup. Such setups are usually very expensive, inflexible, and complicated to install and administer. These days, a better solution is to use a hosted phone system (sometimes known as a virtual PBX).

If you’re new to hosted phone systems, the following will explain more about them and how your organization could benefit:

What Is a Hosted Phone System?

A hosted phone system is a virtual PBX that operates through a permanent Internet connection. The most common is a cloud-based hosted phone system where all phones get connected to an external VoIP (Voice-over-IP) data center. Virtual PBXs come with enterprise features all modern businesses and organizations need, such as voicemail to email with text transcription, video conferencing, auto attendants, call diversions, and more.

How Does It Work?

An online server manages all inbound and outbound calls via a SIP (Session Initiation Protocol) trunk over a VoIP connection. For inbound calls, the cloud-based server essentially converts voice call information into digital data “packets.” It transmits them over the Internet to your desk phones, smartphones, or even desktop and laptop computers.

Advantages of a Hosted Phone System

Hosted phone systems undoubtedly offer businesses and other organizations plenty of flexibility. The call quality is excellent, and the market for such phone system solutions is growing by around 15% each year. But why else should you consider a hosted phone system for your business or organization?

Simple to Install

Firstly, hosted phone systems are a breeze to implement in any workplace environment compared with traditional PBX phone systems. The setup for a cloud-based solution is all done online, and you don’t need any installers to come out to your premises. As you can appreciate, such simplicity means it’s also great for teams that work remotely, such as from home or out on the field.

Significant Cost Savings

Another massive advantage of hosted phone systems is the cost savings. You don’t need to have expensive telecommunications equipment installed at your premises, nor must you invest in costly desk phones. In fact, you can use the equipment you’ve already got. The cost savings are a boon for startups as well, as they can use more of their startup capital towards other areas.

It’s a Perfect Solution for Working From Home

The COVID-19 pandemic has undeniably meant that many office workers have had to transition to working from home. Such changes have caused some businesses and other organizations logistical problems. A hosted phone system is quick and easy to set up for teams working from home, and they work seamlessly with iOS and Android smartphones.


Lastly, cybercrime is a growing problem for today’s modern businesses and organizations, and data breaches can cost millions of dollars. Thankfully, hosted phone systems are very secure. All call data gets transmitted digitally over the Internet, and that data gets encrypted for peace of mind. That makes it virtually impossible for any nefarious members of society to eavesdrop on any confidential conversations.

Benefits for Specific Industries

Hosted phone systems are very scalable and work well for any business or organization, whether they have two employees or 20,000 team members. However, did you know certain industries can significantly benefit from using hosted phone systems? Take a look at the following examples to find out how:

Healthcare providers such as doctor’s surgeries, hospitals, and clinics strongly need flexible telecommunication solutions. That’s why it makes sense for such organizations to use hosted phone systems. They enable healthcare teams to be always available to patients, and all voice communications are safe and secure.

Government Agencies
It’s no surprise that the U.S. government has many agencies that help serve its citizens as efficiently and productively as possible. Telecommunications is crucial to helping deliver the services utilized by all citizens each day. That’s why it makes sense to use a secure hosted phone system. The technology behind such systems is scalable and can meet the stringent performance demands required by government agencies.

Hosted phone systems for the education sector help unite communities, especially where students and teachers must learn and work from home, respectively, due to COVID-19 restrictions. Another advantage is how affordable such solutions are, especially given how many educational facilities cannot justify the cost of expensive traditional phone systems.

The insurance industry is a fundamental sector that supports other businesses, organizations and, of course, is an essential service to individuals. It’s crucial that customers can contact insurance companies at any given time for various reasons. Hosted phone systems enable insurers to scale up their operations at a moment’s notice, and they allow insurance company employees to work from home and deal with clients, resulting in increased flexibility.

Roofing contractors can seldom make and receive calls in an office environment due to the nature of their work. It’s important that customers and suppliers can contact them at any given time, whether they’re on someone’s roof or at ground level. The good news is that roofing contractors can benefit from hosted phone systems as they work on any mobile device, and they are affordable solutions.

Restaurant and Retail
Lastly, hosted phone systems enable hospitality sectors like restaurants and retail to serve more customers, handle high call volumes, and scale their businesses with ease. They’re also more reliable and considerably cheaper than traditional PBX systems.

Disadvantages of a Hosted Phone System

The only main disadvantage of hosted phone systems is the need for Internet access. Thankfully, all your office needs is a standard DSL or fiber connection. Plus, remote workers can use their home Internet connections or the data networks on their smartphones.

Why Choose Carolina Digital Phone?

Carolina Digital Phone is an established provider of hosted phone systems. We can provide you with an easy setup solution that boasts competitive pricing, and our local North Carolina support teams are there to help you if needed. We also offer a $100 discount off your first month’s service to help you get started. Contact our friendly team today to learn how a hosted phone system from Carolina Digital Phone can benefit your business.

Nicky Smith

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