Choosing the right business phone systems has never been more consequential. The UK’s PSTN switch-off is now barely twelve months away, cloud adoption is accelerating across every sector, and the way teams communicate has fundamentally changed since the shift to hybrid working. Whether you run a five-person consultancy or a 200-seat contact centre, the telephony decisions you make in 2026 will shape your productivity, costs and customer experience for years to come.
This guide covers every mainstream business telephony option available to UK companies today — from traditional PBX hardware to fully managed UCaaS platforms — and helps you decide which approach fits your organisation best. We also look at Microsoft Teams integration, the real cost of each system type, and what the PSTN closure means for businesses still running legacy lines.
If you already know you need a hosted VoIP solution, our HyperCloud Hosted VoIP page explains exactly what we offer and how it works.
Types of Business Phone Systems Explained
Before comparing features and pricing, it helps to understand the four main categories of business phone systems available in the UK market.
Traditional PBX (Private Branch Exchange)
A traditional PBX is a physical telephone switch installed on your premises. It connects internal extensions to each other and routes calls to and from the public telephone network via analogue or ISDN lines. PBX systems were the backbone of business telephony for decades, but they require significant upfront investment, on-site maintenance and dedicated cabling. With the PSTN shutting down in January 2027, traditional PBX hardware that relies on analogue or ISDN trunks is reaching end of life.
IP PBX (Internet Protocol PBX)
An IP PBX performs the same switching function as a traditional PBX but uses your internet connection instead of copper phone lines. Calls travel as data packets over your local network and out through a SIP trunk to the public telephone network. IP PBX systems offer better call quality, more features and lower call costs than analogue PBX, but you still own and maintain the server hardware on-site. That means capital expenditure, IT overhead and the risk of a single point of failure if the server goes down.
Hosted VoIP (Cloud Phone System)
A cloud phone system moves the entire telephony platform off your premises and into the provider’s data centres. You connect IP handsets, softphone apps or headsets to your broadband, and the provider handles call routing, voicemail, auto-attendant, call recording and every other feature from the cloud. There is no server to buy, no hardware to maintain and no software to patch. You pay a predictable per-user monthly fee, and scaling up or down takes minutes rather than weeks.
Hosted VoIP is the fastest-growing segment of the UK business telephony market, and for good reason. It combines enterprise-grade features with the simplicity and cost-efficiency that small and mid-sized businesses need. For a full comparison of VoIP against traditional phone lines, read our VoIP vs landline guide.
UCaaS (Unified Communications as a Service)
UCaaS takes the cloud phone system concept further by bundling voice, video conferencing, team messaging, file sharing and presence into a single platform. Rather than running separate tools for calls, meetings and chat, everything lives in one application. UCaaS platforms are designed for organisations that want a fully integrated communications experience — particularly those with distributed or hybrid teams. Our UCaaS UK guide covers the technology, benefits and leading platforms in detail.
System Type Comparison Table
The table below summarises how the four main business phone systems compare across the factors that matter most to UK organisations.
| Feature | Traditional PBX | IP PBX | Hosted VoIP | UCaaS |
|---|---|---|---|---|
| Upfront cost | £3,000–£15,000+ | £2,000–£10,000+ | £0–£100 per handset | £0–£100 per handset |
| Monthly cost per user | £25–£45 (line rental + maintenance) | £10–£25 (SIP trunk + maintenance) | £5–£15 | £10–£25 |
| Hardware location | On-premise server room | On-premise server room | Provider’s data centres | Provider’s data centres |
| Maintenance responsibility | Your IT team or contractor | Your IT team or contractor | Provider-managed | Provider-managed |
| Scalability | Slow — requires new hardware | Moderate — limited by server capacity | Instant — add users online | Instant — add users online |
| Remote working support | None without call divert | Limited (VPN or softphone) | Full — any device, anywhere | Full — any device, anywhere |
| Video conferencing | Not included | Requires add-on | Available on most plans | Fully integrated |
| Team messaging | Not included | Not included | Some platforms include it | Fully integrated |
| Auto-attendant / IVR | Expensive add-on | Software module required | Included | Included |
| Call recording | Separate hardware needed | Server-based, limited storage | Cloud-stored, searchable | Cloud-stored, searchable |
| Call analytics | Very limited | Basic reports | Real-time dashboards | Advanced analytics and AI insights |
| CRM integration | Not possible | Limited via middleware | Native integrations | Deep native integrations |
| Microsoft Teams integration | Not possible | Possible via SIP gateway | Direct routing available | Native or direct routing |
| PSTN switch-off ready | No — end of life | Yes (uses SIP trunks) | Yes | Yes |
| Best suited for | Legacy estates only | Businesses needing on-site control | Most SMEs and mid-market | Hybrid and distributed teams |
Cloud vs On-Premise: Which Approach Is Right?
The most fundamental decision in business telephony is whether to keep your phone system on-premise or move it to the cloud. Here is how the two approaches compare in practice.
The Case for Cloud
A cloud phone system eliminates capital expenditure, removes the burden of hardware maintenance and gives you instant scalability. You pay a flat monthly fee per user, and the provider handles uptime, security patches, feature updates and disaster recovery. For the vast majority of UK businesses — particularly those with fewer than 250 employees — cloud telephony is the most cost-effective and flexible option.
Cloud also wins decisively on business continuity. Because the platform runs in geo-redundant data centres, a fire, flood or power cut at your office does not take your phones down. Staff simply take calls on their mobiles or laptops using the same business numbers.
The Case for On-Premise
On-premise IP PBX still makes sense for a small number of organisations with very specific requirements: businesses in regulated industries that mandate on-site data storage, companies with unreliable broadband in remote locations, or large enterprises with dedicated telecoms teams and the budget to maintain their own infrastructure. Even in these cases, hybrid models — where the core PBX sits on-site but connects to cloud services for remote users — are increasingly common.
Key Features to Look for in a Business Phone System
Regardless of which system type you choose, certain features have become essential for UK businesses in 2026.
- Auto-attendant and IVR: A professional greeting that routes callers to the right department without human intervention. Reduces wait times and ensures calls are never missed.
- Call recording: Record inbound and outbound calls for training, compliance and dispute resolution. Cloud-stored recordings are searchable and accessible from anywhere.
- Real-time analytics: Dashboards showing call volumes, wait times, missed calls and agent performance. Essential for sales teams and customer service departments.
- Voicemail to email: Voicemail messages delivered as audio files to your inbox, so you never need to dial in to check messages.
- Softphone apps: Desktop and mobile applications that let staff make and receive calls on their business number from any device.
- Call queuing and ring groups: Distribute incoming calls across teams fairly, with hold music and position announcements for callers waiting in the queue.
- Number porting: Keep your existing phone numbers when you switch providers. Customers and suppliers see no change.
- CRM integration: Automatically log calls, pop customer records on screen and click-to-dial from your CRM. Integrations with Salesforce, HubSpot, Zoho and others save hours of manual data entry.
Microsoft Teams Integration
Microsoft Teams has become the default collaboration platform for a huge number of UK businesses. If your organisation already uses Teams for chat, video meetings and file sharing, it makes sense to ask whether you can handle voice calls through it as well.
The answer is yes — but with caveats. Microsoft offers Teams Phone (formerly Phone System) as an add-on licence, which enables PSTN calling directly within Teams. However, many businesses find that a dedicated hosted VoIP platform integrated with Teams via Direct Routing or Operator Connect delivers better call quality, more granular control and lower costs than relying on Microsoft’s native calling plans.
Direct Routing connects your hosted VoIP provider’s SIP trunks to Teams, so users can make and receive external calls from within the Teams interface while the underlying telephony is handled by a specialist provider. This gives you the best of both worlds: the familiar Teams experience for your staff, and enterprise-grade call routing, recording, analytics and failover from a dedicated voice platform.
Connection Technologies supports Microsoft Teams Direct Routing through our HyperCloud platform, giving you seamless integration without the limitations of Microsoft’s own calling plans.
Pricing Tiers: What to Expect in 2026
Pricing for cloud solutions UK businesses can access varies depending on the features included, the number of users and the contract length. Here is a realistic breakdown of what the market looks like.
- Entry-level hosted VoIP (£5–£10 per user/month): Includes a UK number, inclusive UK calls, voicemail, basic call routing and a softphone app. Ideal for micro-businesses and sole traders who need a professional phone presence without complexity.
- Mid-range hosted VoIP (£10–£18 per user/month): Adds auto-attendant, call recording, call analytics, CRM integration and ring groups. Suited to growing SMEs with 10–100 users who need robust call management.
- UCaaS / premium plans (£18–£30 per user/month): Includes everything above plus video conferencing, team messaging, advanced analytics, AI-powered call insights and Microsoft Teams integration. Designed for mid-market and enterprise organisations with complex communication needs.
On-premise IP PBX costs are harder to generalise because they depend heavily on the hardware chosen, the number of extensions and ongoing maintenance contracts. As a rough guide, expect £2,000–£10,000 upfront for the server and licensing, plus £100–£300 per month for SIP trunks and support.
Choosing the Right System for Your Business Size
Sole Traders and Micro-Businesses (1–5 Users)
An entry-level cloud phone system is almost always the best fit. You get a professional business number, voicemail, call forwarding and a mobile app for under £10 per user per month. There is no hardware to buy and no IT overhead. If you outgrow the plan, upgrading takes a single phone call.
Small Businesses (5–50 Users)
Mid-range hosted VoIP delivers the features you need — auto-attendant, call recording, analytics and CRM integration — without the cost or complexity of on-premise hardware. This is the sweet spot for the majority of UK SMEs, and it is where cloud solutions UK providers offer the most competitive pricing.
Mid-Market and Enterprise (50–500+ Users)
At this scale, UCaaS platforms or premium hosted VoIP with Microsoft Teams integration become compelling. You benefit from advanced analytics, AI-driven call insights, contact centre features and deep integrations with your existing software stack. Some larger organisations opt for a hybrid model with on-premise IP PBX at headquarters and cloud extensions for branch offices and remote workers.
Not sure which tier suits your business? Get a free business mobile quote or call us on 0333 015 2615 and we will recommend the right solution based on your requirements.
Migrating from Legacy Phone Systems
If you are still running a traditional PBX or ISDN-based system, migration to a cloud platform is simpler than most businesses expect. A well-managed transition follows these steps:
- Audit your current setup: Document every phone line, number, extension, hunt group and piece of hardware. Identify which numbers are customer-facing and must be ported.
- Assess your broadband: Each concurrent VoIP call uses roughly 100 kbps. A standard 80 Mbps FTTC connection handles well over 100 simultaneous calls, so most businesses are already covered.
- Select your provider and plan: Choose a provider with UK-hosted infrastructure, transparent pricing, a clear SLA and responsive support. Compare at least three providers before committing.
- Port your numbers: Your existing phone numbers transfer to the new platform. This typically takes 5–10 working days and happens with no disruption to incoming calls.
- Configure and test: The provider sets up call routing, auto-attendant, voicemail, ring groups and extensions. Thorough testing before go-live ensures everything works as expected.
- Go live and decommission: On the agreed date, your new system goes live. Once confirmed working, cancel your old lines and stop paying for hardware maintenance you no longer need.
Connection Technologies manages the entire migration process from audit to go-live, so your team can focus on running the business rather than wrestling with telephony configurations.
The PSTN Switch-Off: What It Means for Your Business
BT Openreach is switching off the UK’s Public Switched Telephone Network by January 2027. Every analogue phone line, every ISDN circuit and every device that depends on the copper network will stop working. Openreach stopped selling new ISDN lines in September 2023, and exchanges are being migrated on a rolling basis.
If your business phone systems still rely on traditional lines, the clock is ticking. Businesses that leave migration to the last minute face longer lead times for number porting, hardware delivery and installation — plus the risk of rushed configuration and service disruption. Starting the process now gives you time to plan properly, test thoroughly and train your team.
The switch-off also affects non-voice services that use analogue lines, including lift emergency phones, intruder alarms, EPOS terminals and fax machines. All of these need upgrading to IP-compatible alternatives before the deadline. For a broader look at how the switch-off affects UK businesses, our best business phone systems UK 2026 guide covers the full landscape.
Frequently Asked Questions
What is the best business phone system for a small UK company?
For most small UK businesses, a hosted VoIP or cloud phone system offers the best balance of features, flexibility and cost. You get a professional auto-attendant, call recording, analytics and mobile apps from around £5–£15 per user per month, with no hardware to buy or maintain. It scales instantly as you grow and supports remote working out of the box.
How much does a business phone system cost in 2026?
Cloud-hosted systems range from £5 to £30 per user per month depending on features. Entry-level plans cover calls and basic routing, while premium UCaaS plans include video, messaging and AI analytics. On-premise IP PBX costs £2,000–£10,000+ upfront plus ongoing maintenance. Traditional PBX systems are no longer a viable investment given the PSTN switch-off.
What is the difference between VoIP and UCaaS?
VoIP (Voice over Internet Protocol) handles voice calls over the internet. UCaaS (Unified Communications as a Service) bundles VoIP with video conferencing, team messaging, file sharing and presence into a single cloud platform. Think of UCaaS as VoIP plus everything else your team uses to communicate, delivered as one integrated service.
Can I integrate my phone system with Microsoft Teams?
Yes. Most modern hosted VoIP providers support Microsoft Teams integration via Direct Routing or Operator Connect. This lets your staff make and receive external calls from within Teams while the underlying telephony is managed by a specialist voice provider. It typically delivers better call quality and more features than Microsoft’s own calling plans.
What happens to my phone system when the PSTN switches off?
Any system that relies on analogue or ISDN lines will stop working when BT Openreach completes the PSTN shutdown in January 2027. You will need to migrate to a VoIP, hosted VoIP or UCaaS platform before the deadline. Number porting ensures your existing phone numbers transfer across, so customers see no change.
How long does it take to switch to a cloud phone system?
A typical migration takes two to four weeks from initial consultation to go-live. The longest part is usually number porting, which takes 5–10 working days. Configuration, testing and staff training happen in parallel. A managed migration provider handles the entire process to minimise disruption.
Is a cloud phone system secure enough for business use?
Yes. Reputable providers use TLS and SRTP encryption for calls in transit, host data in ISO 27001-certified UK data centres, and implement automated fraud detection, role-based access controls and two-factor authentication. A well-configured cloud phone system is more secure than an unencrypted analogue line.
Can I keep my existing phone numbers if I switch systems?
Yes. Number porting transfers your existing geographic and non-geographic numbers to your new provider. The process typically takes 5–10 working days and is handled entirely by your new provider. There is no disruption to incoming calls during the transition, and your customers will not notice any difference.
Ready to find the right business phone system? Get a free business mobile quote or call us on 0333 015 2615 to discuss your requirements with a UK-based advisor.