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With the UK’s PSTN switch-off now firmly underway, businesses across the country are migrating to hosted VoIP at an unprecedented rate. But what exactly is hosted VoIP, how does it work, and what should your business expect to pay in 2025 and beyond? In this comprehensive guide, we break down everything you need to know — from the technical fundamentals and feature comparisons to real-world UK pricing and a step-by-step migration plan.
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What Is Hosted VoIP?
Hosted VoIP (Voice over Internet Protocol) is a cloud-based phone system where all the telephony infrastructure — call routing, voicemail, auto-attendants, and more — is managed off-site by a third-party provider. Instead of maintaining bulky PBX hardware in a server room, your business simply connects IP handsets or softphone apps to the internet, and your provider handles the rest.
Hosted VoIP vs On-Premise VoIP: What’s the Difference?
The distinction is straightforward but critical for budgeting and long-term strategy:
| Feature | Hosted VoIP | On-Premise VoIP |
|---|---|---|
| Infrastructure location | Provider’s data centres | Your office / server room |
| Upfront cost | Low (handsets only) | High (PBX hardware + installation) |
| Ongoing cost | Per-user monthly subscription | Maintenance, licensing, power |
| Scalability | Add/remove users instantly | Requires hardware upgrades |
| Maintenance | Provider-managed | In-house IT team required |
| Disaster recovery | Built-in geo-redundancy | Requires separate DR planning |
| Remote working | Seamless — any device, anywhere | Requires VPN / additional config |
| Best suited for | SMEs, multi-site, hybrid teams | Large enterprises with dedicated IT |
For the vast majority of UK businesses — particularly SMEs and organisations with hybrid or multi-site workforces — hosted VoIP delivers superior flexibility, lower total cost of ownership, and significantly less administrative overhead.
How Does Hosted VoIP Work? The Technical Fundamentals
Understanding how hosted VoIP works doesn’t require an engineering degree. Here’s the process in simple terms:
- Voice conversion: When you speak into a VoIP handset or softphone, your voice is converted from analogue sound waves into digital data packets using codecs such as G.711 or G.722.
- Packet transmission: These data packets travel over your business internet connection (ideally a dedicated leased line or SoGEA connection with QoS prioritisation) to your provider’s cloud platform.
- Cloud processing: Your hosted VoIP provider’s platform — housed in geographically redundant UK data centres — handles call routing, number management, voicemail, IVR menus, call recording, and every other feature.
- Call delivery: The call is routed to its destination, whether that’s another VoIP user, a mobile, or a traditional landline via SIP trunking to the PSTN.
The entire process happens in milliseconds. With a quality internet connection and a reputable provider, call quality on a hosted VoIP system is indistinguishable from — and frequently superior to — traditional landlines.
What You Need to Get Started
- A reliable internet connection — each concurrent call requires approximately 100 Kbps of bandwidth. For businesses with more than 10 users, a dedicated leased line or Ethernet connection is recommended.
- IP handsets or softphone applications — modern desk phones from manufacturers like Yealink or Poly, or software-based phones for laptops and mobiles.
- A hosted VoIP provider — this is where the quality of your experience is truly determined.
Hosted VoIP UK Pricing: What Should You Expect to Pay?
One of the most attractive aspects of hosted VoIP is its transparent, predictable pricing model. UK businesses can expect the following cost ranges in 2025/2026:
| Cost Element | Typical UK Price Range |
|---|---|
| Per-user monthly licence | From £12/user/month |
| IP desk phone (one-off purchase) | £50–£250 per handset |
| Number porting | Usually free or included |
| UK landline calls | Often included in bundles |
| UK mobile calls | Included or 1p–3p/min |
| Call recording storage | Often included; premium tiers for extended retention |
| Setup / installation | Free–£250 (provider dependent) |
Compare this to a traditional on-premise PBX system, which can cost £3,000–£15,000+ upfront before you’ve even made a single call. For most UK businesses, hosted VoIP reduces telephony costs by 30–60% compared to legacy systems.
Want a tailored quote for your business?Request your free hosted VoIP quote from Connection Technologies →
Hosted VoIP Features: What’s Included?
Modern hosted VoIP platforms go far beyond simple voice calls. Here are the features UK businesses should expect as standard:
- Auto-attendant / IVR — route callers to the right department automatically
- Call recording — essential for compliance in regulated industries
- Voicemail-to-email — receive voicemail transcriptions directly in your inbox
- Hunt groups & ring queues — distribute incoming calls intelligently across teams
- Softphone apps — make and receive calls on your mobile or laptop using your business number
- Microsoft Teams integration — unify your calling and collaboration platforms
- Real-time analytics & wallboards — monitor call volumes, wait times, and agent performance
- CRM integrations — screen pops and click-to-dial with platforms like Salesforce and HubSpot
- Number porting — keep your existing business numbers
- Presence & status indicators — see who’s available, on a call, or away
Our Recommended Solution: HyperCloud by Connection Technologies
At Connection Technologies, we provide hosted VoIP solutions built on our HyperCloud platform — a next-generation unified communications system designed specifically for UK businesses.
HyperCloud delivers:
- Enterprise-grade reliability with geo-redundant UK data centres and 99.999% uptime SLA
- Flexible licensing from just £6/user/month — scale up or down as your business demands
- Native Microsoft Teams integration — use Teams as your complete business phone system
- Advanced call management — including IVR, call recording, wallboards, and detailed analytics
- Dedicated UK-based support — no overseas call centres, no chatbot runarounds
- Free number porting and fully managed migration from your existing system
Whether you’re a 5-person consultancy or a 500-seat contact centre, HyperCloud scales to fit. Learn more about HyperCloud and get a free quote →
The Pros and Cons of Hosted VoIP
Advantages
- Lower total cost of ownership — no expensive hardware, no maintenance contracts
- Instant scalability — add new users or locations in minutes, not weeks
- Business continuity — calls route automatically if your office is inaccessible
- Remote & hybrid ready — your phone system works wherever your people do
- Always up to date — new features and security patches are deployed automatically
- Future-proof — fully aligned with the UK’s all-IP network transition
Potential Drawbacks
- Internet dependency — call quality relies on a stable broadband or leased line connection (easily mitigated with proper connectivity planning)
- Ongoing subscription costs — while cheaper overall, you’ll pay a recurring monthly fee rather than a one-off capital expense
- Provider dependency — choosing the wrong provider can mean poor support and unreliable service (which is precisely why choosing a trusted UK partner like Connection Technologies matters)
Migrating to Hosted VoIP from the PSTN: A Step-by-Step Guide
With BT’s PSTN and ISDN networks being switched off by January 2027, migration isn’t optional — it’s essential. Here’s how to make the transition to hosted VoIP smoothly:
Step 1: Audit Your Current Setup
Document your existing phone lines, numbers, call volumes, and any equipment such as door entry systems, fax machines, or alarm lines that currently rely on the PSTN.
Step 2: Assess Your Internet Connectivity
Ensure your broadband or leased line can handle the additional bandwidth. As a rule of thumb, allow 100 Kbps per concurrent call. For businesses with 20+ users, we strongly recommend a dedicated Ethernet or leased line connection with QoS.
Step 3: Choose Your Hosted VoIP Provider
Look for a UK-based provider with proven reliability, transparent pricing, and dedicated account management. Connection Technologies’ HyperCloud platform ticks every box.
Step 4: Plan Your Number Porting
Your existing business numbers can be transferred (ported) to your new hosted VoIP platform. This process typically takes 7–14 working days and can be managed entirely by your provider.
Step 5: Configure and Test
Your provider will configure your call flows, IVR menus, hunt groups, and user extensions. Thorough testing before go-live ensures a seamless transition.
Step 6: Go Live and Decommission Legacy Lines
Once your hosted VoIP system is fully operational and all numbers have ported successfully, your old PSTN/ISDN lines can be ceased. Congratulations — you’re future-proofed.
Need help planning your PSTN migration?Talk to our team for a free consultation and migration roadmap →
Who Is Hosted VoIP Best Suited For?
Hosted VoIP is ideal for virtually any UK business looking to reduce telephony costs while gaining powerful communication features. It is particularly well suited for SMEs, multi-site organisations, remote and hybrid teams, and companies preparing for the PSTN switch-off. Whether you operate a small office or a large contact centre, a hosted VoIP solution can be tailored to your exact requirements.
Ready to make the switch?Get your free, no-obligation hosted VoIP quote from Connection Technologies today →
Frequently Asked Questions
What is hosted VoIP and how does it work for UK business?
Hosted VoIP (also called cloud PBX) is a complete business phone system delivered as a cloud service — calls, voicemail, IVR menus, hunt groups, call recording, voicemail-to-email, mobile and desktop apps, all hosted by the provider rather than on hardware in your office. You connect via your existing internet connection. Users get the same number on a desk phone, mobile app and laptop softphone simultaneously. It replaces both traditional on-prem PBX hardware and ISDN/analogue lines.
How much does hosted VoIP cost in the UK in 2026?
UK hosted VoIP typically costs £5–£15 per user per month depending on features. Entry tier (£5/user) includes calls, voicemail, voicemail-to-email and a softphone app. Mid-tier (£8–£10/user) adds call recording, IVR menus, hunt groups and CRM integration. Premium (£12–£15/user) adds advanced analytics, omnichannel and contact-centre features. Setup is usually free, free UK number porting, and most providers include free desk phones on 36-month terms.
Who is hosted VoIP best suited for?
Best suited to: any UK business with 5+ users still on ISDN/analogue (mandatory move before the 2027 PSTN switch-off); businesses with hybrid or remote workers who need the same number on multiple devices; multi-site businesses that want one phone system across all locations; growing businesses that need easy scaling; businesses replacing ageing on-prem PBX hardware. Less suited to: very small one-person operations (where a virtual mobile number is simpler) or businesses with extreme on-prem call-flow requirements.
Do I need new desk phones for hosted VoIP?
Not necessarily. You can use existing handset hardware via the softphone app on existing PCs and mobiles — no desk phones required. If you want desk phones, modern Yealink or Polycom IP phones cost £80–£250 outright or are usually included free with a 36-month VoIP contract. Existing analogue or ISDN handsets cannot be used directly but can sometimes be connected via an ATA (Analogue Telephone Adapter) for the few cases where it matters.
How long does hosted VoIP take to install?
A typical 10–25 user UK business hosted VoIP installation takes 2–4 weeks end to end: 1–2 weeks for number porting (lasting 5–10 working days for single numbers, 10–25 days for ranges), 1 week for handset shipping and configuration, and final cutover on a scheduled morning. The actual cutover is normally 1–2 hours of overlap during which calls continue working. Larger deployments (50+ users) phase over 4–6 weeks for risk management.
Is hosted VoIP reliable enough for critical business calls?
Yes — modern hosted VoIP platforms operate at 99.99%+ uptime with geographic redundancy across UK data centres. The reliability bottleneck is usually your local internet connection, which is why we always recommend a primary fibre connection plus a 4G/5G failover for any business with mission-critical calls. With dual-WAN setup, hosted VoIP is more reliable than legacy ISDN by every meaningful measure.
See also our guide on VoIP Number Porting UK 2026: How It Works, Timelines, PAF & Cost for more details.
Can I keep my business phone numbers with hosted VoIP?
Yes — number porting is included free with most UK hosted VoIP providers. Geographic numbers (01, 02), non-geographic numbers (03, 0800) and DDI ranges all port in. Porting takes 5–10 working days for single numbers, 10–25 working days for full ranges. We coordinate the port date with you to minimise disruption — calls continue normally before and after the port.
Does hosted VoIP comply with the 2027 PSTN switch-off?
Yes — hosted VoIP is one of the two compliant replacements (the other being SIP trunking) for ISDN and analogue lines being switched off across the UK by January 2027. Hosted VoIP is the more comprehensive replacement: SIP trunking only replaces the lines, hosted VoIP replaces both the lines and the PBX hardware. For most UK SMEs hosted VoIP is the right modernisation path.
Related Guides
- VoIP vs landline for UK businesses
- best hosted VoIP providers in the UK
- preparing for the 2027 landline switch-off
- best business phone systems compared
- how SIP trunking works and costs
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