What is a hosted PBX?

A hosted PBX is a telephone system located in one or more data centres connected to the internet. Unlike traditional telephone systems where you need to purchase the hardware, you pay a monthly service fee with a hosted PBX instead. 

Hosted PBX is a Internet Phone System
A hosted PBX is an internet telephone system

Most often, a hosted PBX will use VoIP rather than legacy technologies such as ISDN and PSTN. VoIP and acronym for voIce over internet protocol, or more concisely, internet telephone calls.

We say that ISDN and PSTN are legacy technologies because, in 2025, BT will be turning off those networks, so all businesses and consumers will need to move to VoIP before then. Yes, that means everyone! The good news is that the industry is already geared up for the change, and there are plenty of VoIP services you can switch to that'll not only help avoid being cut off in a few years but also give you a far superior service.

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How does a hosted PBX work?

A hosted PBX is entirely digital and uses IP (internet protocol) to transmit your telephone calls (where the IP in voice over IP comes from). 

Whether you're working in your office with a handset or making a call via a softphone installed on your laptop, you'll be connected to your VoIP provider's hosted PBX over the internet. Your IP enabled phone will convert your voice to packets of data before transmitting them to your provider's hosted PBX. From there, the call is routed over the internet to the recipient's phone system and its final destination. With incoming calls, as you might expect, everything happens but just in reverse.

The diagram below shows a simplified view of how the technology works and importantly highlights that your employees can be working from anywhere and make and receive calls. 

Diagram showing how a hosted PBX works
Diagram showing how a hosted PBX works

What are the benefits of a hosted PBX?

There are numerous benefits of moving your telecoms to the cloud and replacing your phone system with a hosted PBX. Namely, you'll save money, get more functionality, give your team more flexibility and future proof your business. 

It's important to note that not every business will save money by moving to a hosted PBX; in some instances, it is still more cost-effective to buy an onsite piece of hardware. If you don't know which is for you, don't worry, we can help with both and give you unbiased advice as to which is best for your business.

Cost reduction

Most, but not all businesses, will save money by moving to VoIP and indeed a hosted PBX. Calls made over the internet are significantly cheaper than those over ISDN and PSTN lines, especially if you make many international calls. Many businesses currently use ISDN, and aside from the fact that it's being phased out, it can be expensive, especially if you have many lines. On the other hand, VoIP runs over your internet connection, so as long as you have sufficient bandwidth, you'll be able to save the money you were spending on ISDN and use it for something else.

Another benefit from a cost perspective is that seeing that you don't buy and own the infrastructure your phones are connected to, you don't need to worry about the maintenance and upkeep of any of it. Your provider will be responsible for ensuring that the system is well protected, resilient and up to date, leaving you to focus on your business. Finally, you may not even need handsets if your team has mobiles or computers to install a softphone. A softphone is simply an app installed on your laptop, phone or tablet that connects to your hosted PBX; you can now take your business phone number (and low call rates) anywhere with you.

Extensive feature set

Probably one of the most prominent advantages of a hosted PBX is that you'll have access to a vast array of features that will all be manageable via a user-friendly web portal. The types of features that you will have previously have been reserved for companies with a big enough budget to buy an enterprise-grade phone system, and even then, many of the things included with a hosted PBX would be add-ons.

Features of a hosted PBX:

Our hosted PBX includes all of the following features:

  • Voicemail to email
  • Free internal calls
  • Music on hold
  • Windows, Mac, iOS and Android apps
  • Call forwarding
  • Time of day call routing
  • Call hold and resume
  • Hunt groups
  • Call recording
  • Call queues
  • Auto-attendant
  • Call screening
  • Call logs
  • Call monitoring
  • Call analytics
  • Speed dial
  • With more being added all the time…
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Unlimited numbers

A significant benefit of getting a VoIP service is getting pretty much an unlimited amount of VoIP phone numbers. You can choose from local and national numbers and get them quickly and easily added to the system; you can even get international numbers if you've got a presence abroad, and the numbers will feed straight back into your hosted PBX. This is great from a marketing perspective if you want to show you've got a presence in a specific area or if you want to give people a local number to call when they are trying to call your company. Examples of the numbers we can provide are:

  • 01 & 02 geographic numbers
  • 03 non-geographic numbers
  • 0800 free phone numbers
  • 056 VoIP specific numbers
  • 0844 and 0843 premium numbers
  • 0870 numbers premium

Of course, if you're an established business, you will more than likely wish to keep your current range of numbers, which isn't a problem at all. Part of the process of switching to VoIP will be to port your numbers over to the new service. It only takes a few weeks, and we'll ensure that any disruption is minimised before and after the move. Importantly, make sure you choose a reliable partner for your hosted PBX as trusting a company with your precious business phone numbers is a responsibility that shouldn't be taken lightly,


Having a hosted VoIP PBX will immediately free you from the limitation of being tied to a physical phone line for your calls. As your business phone service will be internet-based, you can make and receive calls anywhere you have an internet connection. Take the pandemic as an example. Had you had a hosted PBX, your team could have taken their handsets home and plugged them into their internet connections and continued to take calls. Better yet, with our softphones, they wouldn't even need their handset; as long as they have a mobile or a laptop to hand, they'll be available. As we move forward and out of the pandemic, many employees will likely want to keep a certain amount of flexibility about where they work. Yes, working from home isn't always great, but on the flip side, having the option between the office or home is a nice balance. With the next generation of workers coming out of universities and the workplace, you can expect them to have high technological expectations. They're used to being online all the time and having the ability to communicate from anywhere. Businesses will need to adapt and to keep the best and brightest implement new technologies like hosted VoIP.


In times gone by, if you wanted to add more telephone numbers or indeed users to your phone system, you might need to upgrade your ISDN line and buy additional physical cards for your phone system and software licenses too. With a hosted PBX, that's no longer the case. A hosted phone system like our Horizon platform is hugely scalable, with it being able to support thousands of users, which means there isn't the risk of you outgrowing it unless you're the next Jeff Bezos.

The only thing we would say on the subject of scalability is that while our hosted platform can support thousands of users, there would come the point where it would be more cost-effective to buy the equipment yourself. If you're expecting significant growth in the next 5-10 years, please mention it to your T2k account manager, who'll be able to make sure whatever you implement takes this into account.

Easy to use

A web-based phone system is exactly what the name suggests, and with most of us know more than at home with web software and tools, almost anyone in your organisation can administer it (if you give them access). IT departments, office managers, call centre team leaders and more love the user interface as it allows them to do what they need to do and do it in the shortest time possible.

Of course, while it's easy to manage, we'll still be on hand for anything a bit more complicated, so while it's hosted, you're not alone with it.


Finally, let's talk about the reliability and resilience of a hosted PBX. As we've already mentioned, a hosted PBX is located in data centres; ours are dotted around the UK. We've invested heavily into their resilience, so if one data centre goes down, the system stays up. That's a big if, though, you need to remember that data centres are themselves highly resilient, with onsite generators, multiple fibre connections and military-grade security. For most businesses, achieving this level of resilience isn't possible.


By switching to a hosted PBX, you future proof your business, reduce costs, improve resilience, give your team more flexibility and superpowers from the stack of features they'll have at their fingertips. With all companies and consumers having to transition to VoIP before 2025, the question is more when will you do it rather than if. 

We hope you found this guide to hosted PBX services in the UK useful. For more information or to speak to a VoIP expert about your specific needs, please get in touch.