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.
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 £6/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 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 an excellent fit for virtually any UK business, but it’s particularly well-suited to:
- SMEs (2–250 employees) — who want enterprise features without enterprise costs
- Multi-site businesses — who need a unified phone system across multiple locations
- Hybrid and remote teams — who require seamless calling from any device, anywhere
- Growing companies — who need a system that scales effortlessly as they add headcount
- Regulated industries — such as financial services, legal, and healthcare, where call recording and compliance features are non-negotiable
- Any business still on PSTN/ISDN — the clock is ticking, and migration is no longer a “nice to have”
Frequently Asked Questions About Hosted VoIP
What is hosted VoIP and how is it different from a traditional phone system?
Hosted VoIP is a cloud-based phone system where your calls are made over the internet rather than traditional copper phone lines. Unlike a traditional PBX, there’s no on-site hardware to maintain — everything is managed by your provider in secure UK data centres. This means lower costs, greater flexibility, and automatic access to the latest features and security updates.
How much does hosted VoIP cost for UK businesses?
Hosted VoIP pricing in the UK typically starts from around £6 per user per month for core packages. Total costs depend on the number of users, chosen features, and whether you need new IP handsets. Most businesses find that hosted VoIP reduces their telephony costs by 30–60% compared to legacy PSTN or ISDN systems. Connection Technologies offers tailored packages to suit every budget — request a free quote for accurate pricing.
Can I keep my existing business phone numbers when switching to hosted VoIP?
Yes. Number porting allows you to transfer your existing geographic (01/02) and non-geographic (03, 0800) numbers to your new hosted VoIP platform. The process typically takes 7–14 working days and is managed by your provider. At Connection Technologies, number porting is included free of charge with all HyperCloud packages.
What internet speed do I need for hosted VoIP?
Each concurrent VoIP call requires approximately 100 Kbps of upload and download bandwidth. For a small office with 5 simultaneous calls, a standard fibre broadband connection is usually sufficient. For larger businesses or those with 20+ concurrent calls, a dedicated leased line or Ethernet connection with Quality of Service (QoS) settings is strongly recommended to ensure consistent call quality.
Is hosted VoIP reliable enough for business-critical communications?
Absolutely. Leading hosted VoIP platforms like Connection Technologies’ HyperCloud operate from geo-redundant UK data centres with 99.999% uptime SLAs. This equates to less than 6 minutes of downtime per year. Built-in failover and automatic call rerouting mean your business stays connected even during localised outages — something legacy phone systems simply cannot match.
What happens to my hosted VoIP system if the PSTN is switched off?
Nothing — and that’s the point. Hosted VoIP operates entirely over the internet, so it’s completely unaffected by the PSTN/ISDN switch-off planned for January 2027. By migrating to hosted VoIP now, your business is already future-proofed. If you’re still reliant on traditional phone lines, we’d recommend beginning your migration planning as soon as possible. Contact Connection Technologies for a free migration assessment.
Make the Switch to Hosted VoIP with Connection Technologies
The move to hosted VoIP isn’t just about replacing your old phone system — it’s about equipping your business with a communications platform that’s more flexible, more resilient, and significantly more cost-effective. With the PSTN switch-off approaching, there’s never been a better time to act.
Connection Technologies has helped hundreds of UK businesses make the transition seamlessly. Our HyperCloud hosted VoIP platform delivers enterprise-grade features from just £6/user/month, backed by dedicated UK support and a fully managed migration service.
Ready to see what hosted VoIP could do for your business?
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