How Does a Hosted Phone System Work?

As the technology advances, more and more businesses are opting to move most of their processes and applications to the cloud in place of making in-premise investments. Telephony is one such area that is seeing a lot of developments lately. 

Hosted telephony, popularly known as Voice Over Internet Protocol (VoIP) is quickly gaining popularity among businesses, all thanks to the many benefits it offers over conventional phone solutions. 

But even then, a lot of business owners and leaders are still unsure what this phone system is about and how it can benefit their companies.

We compiled this quick guide to show you what a hosted phone system is, how it works, and various ways you can leverage it to move your business forward in 2022 and beyond. Let’s dive in!

What is a Hosted Phone System?

Put simply, hosted telephony is a phone system that uses the internet (in place of physical copper lines used in traditional systems) to relay voice data. A specialist cloud provider like Metrotech moderates and manages your business phone system in a secure, networked data centre while also supporting the entire environment for you.

Even so, you will still use most of the existing phone system tools including IP handsets, mobile phones and desktop applications. What’s more, all voice data will pass through the local phone exchange, which means you will pay local rates.

How Does It Work?

As we said, hosted telephony sends voice data through the local phone exchange via the internet. Incoming calls are routed through the IP network and then to the remote host. The dialled number connected is forwarded to the appropriate department or person. The connection is usually established over the Internet or via a dedicated link customised for your company.

You can make and receive calls using IP handsets, mobile phones or even a desktop application.

Benefits of Using a Hosted Phone System

In recent years, communications technology has advanced at a breakneck pace to see systems like hosted telephony become a reality. This relatively new tech is now regarded to be more dependable and efficient compared to legacy phone systems.

Below are some benefits of using VoIP.


The most significant benefit of hosted telephony is that there are no upfront equipment costs. This is majorly because it’s delivered on an operating expense rather than a capital expense basis.

Also, while you will pay fixed monthly payments once installed, you are free to change based on your usage in the future. For example, you may decide to reduce the number of handsets down the road which in turn saves you money.

Additionally, because your system is a host in the cloud rather than in your office, there’s little to no maintenance costs, and office-to-office calls across many sites are free.


Your hosted telephony system is flexible and scaled to meet your needs as your business grows. As a result, new employees can be quickly hired, and your bandwidth can expand to accommodate more users and incoming calls.

If your company moves, you also won’t have to worry because it’s all in the cloud. The system can move to your new location with no extra work or hassle for your team.

Once you start using hosted telephony, there is no limit to how big your company can be; it’s wholly tailored and scalable to your needs.

Easy installation

Because there are no physical cables to install and connect, hosting telephony is simple to set up. Once you’ve identified a good provider to work with, all you’ll need is access to the internet.

Put simply, hosted telephony options are ‘plug and play’ once configured, so they can move around if you need to move your office.

Disadvantages of Hosted Telephony

As with anything, there are a few downsides to using VoIP and related hosted telephony systems. For starters, you’ll need a strong internet connection to support the system, lest your call quality may suffer. Fortunately, modern businesses can now access various dependable, dedicated services at any one time, so there’s no reason to put up with a poor internet connection.

Yet, the biggest drawback of hosted systems is that it lacks the always-on nature of traditional phones. For both the phones and the network infrastructure, power is essential to run hosted phone systems.

Ready To Move To a Hosted Phone System?

A hosted phone system is a fantastic idea for any company looking to boost its productivity, save money and time and grow faster in the future. Your specific circumstances will always determine the best phone system for your needs.

As with any major business move, it’s worthwhile to consult with a professional before moving to hosted telephony to determine what’s best for your company’s systems, goals, practices, operations and cost of ownership.

Ready to get connected? Get in touch with us today to get started on this conversation and move your business forward!