Top Reasons to Use a Hosted PBX Service Instead of a Traditional Telephone System

Hosted PBX services provide many advantages over the purchase or use of a traditional telephone system because they furnish advanced telephone system features as a service over the Internet. Many of those advanced features are expensive to deploy as part of a telephone system. Hosted PBX service is delivered with equipment located on the premises of the provider. This means a business does not need to invest in a telephone system to take advantage of its rich features and capabilities. In most cases, you will only need to purchase or lease the phones which are significantly less expensive than a phone system’s common equipment.

The advantages of a Hosted PBX service can be divided into 4 categories: Financial, Operational, Service and Marketing. Below is a categorized listing of those advantages divided among the categories:


1. Typically, Hosted PBX services only require the purchase of telephone instruments. They have a significantly lower upfront capital expenditure without the need of purchasing cabinets, cards, additional cabling and installation labor.

2. The entire monthly payment can be expensed instead of depreciating the system over 5 years.

3. Hosted PBX services that bundle outbound domestic long distance into their package have more predictable charges each month. The bills do not fluctuate monthly as the use of long distance minutes rise and fall.

4. Expanding a Hosted PBX system is as simple as adding telephones. Telephone and PBX systems can require additional circuit cards, cabling, card cabinets and labor along with the cost of the telephones.

5. Maintenance/repair costs are minimal or none at all.

6. In most situations, the Hosted PBX customer will save money on the monthly recurring charges associated with a telephone system such as telephone lines and line features.

7. Business users that have multiple small offices and especially small offices in different local calling areas will certainly save the most on recurring charges.

8. Employees can easily work from home with Hosted PBX services. Working from home reduces operational costs including rent on office space, equipment, furniture and utilities.


9. Call capacity is more flexible with a Hosted VoIP provider. The number of simultaneous calls is only limited by the amount of available Internet bandwidth and the number of telephones. With a telephone system, call capacity is limited to the number of subscriber lines it has from the Local Exchange Carrier (LEC).

10. Regular fax lines only receive one fax at a time. Many Hosted PBX services terminate faxes electronically allowing for multiple faxes to be received simultaneously.

11. Faxes received electronically in an email can be effortlessly stored and redistributed in email form.

12. Faxes can be sent out while simultaneously receiving faxes from important customers.

13. Sometimes the customer does not know who to call when they have problems with their telephone system. Their equipment could be malfunctioning or it could be a problem with the telephone lines provided by the LEC. Confusions about who to call coupled with the occasional finger pointing between the two providers can lead to disruptive trouble for the business. There is no confusion or finger pointing when a Hosted PBX service is used.

14. It is far easier to connect users in multiple offices into a seamless voice system with a Hosted PBX service than with a telephone system, even a VoIP telephone system.

15. Premium Hosted VoIP providers deliver Automatic Call Distribution (ACD) in their service.

16. Telecommuters can be set-up as easily as taking a phone home and plugging it into a cable or DSL modem. Telephone systems can require a special IP card and other special routing equipment to make this possible.

17. Small businesses can use Direct Inward Dial (DID) numbers at a lower price point than paying for a PRI circuit. 10 digit DID telephone numbers can be assigned to any extension allowing a customer to call a department or individual directly, bypassing a receptionist.

18. Many key employment positions can be filled from other cities and states through the use of telecommuting thus broadening the available talent pool.


19. Telephone systems frequently require on-site visits from the vendor’s technicians for routine repair. Hosted PBX customers may never see a technician from their provider. Generally, Hosted PBX services provide quicker response time to service issues since they do not have to dispatch a technician to their customer’s office.

20. Hosted PBX customers can move their own phones within their office.

21. Many Hosted VoIP providers monitor their customers 24 hours a day and can repair trouble without the customer’s knowledge. Traditional telephone system customers must discover their own problems with the phone system and then initiate the repair process.

22. Fire, hurricane, tornado or an extended power outage can destroy your telephone system and stop your office from processing calls. Many VoIP providers can program calls to re-route automatically if their equipment looses contact with your office. Regardless, auto attendants, voicemail boxes and call forwarding will still process calls from the provider’s Point of Presence (POP).

23. Inclement weather can keep employees from the office and answering phones. The Mobile PBX feature automatically processes calls in any weather when someone is away from the office. Further, the Hosted VoIP provider can redirect call to any 10-digit number with a simple phone call.


24. Hosted PBX services can provide their customers with published telephone numbers in market areas where they do not have a presence. Now companies can test new market areas and provide the feel of a local presence with minimal investment.

25. Businesses can relocate without ever having to change their telephone number. This can be across town or into another state.

26. Key personnel can be recruited from other cities and states with the availability of telecommuting.

27. Supporting a business within or under a parent company can get costly and complicated to manage. An independent telephone identity (multiple published numbers in hunt) and communications for a “Tenant” can be expensive or impossible on some traditional telephone systems. Using Hosted PBX services reduces the complications and removes the cost barrier for providing professional call processing and published telephone numbers for each tenant you add.

28. Mobile PBX feature integrates an employee’s mobile phone with the Hosted PBX service. Companies can live up to the personal level of service that they have promised when employees can get their calls no matter where they are.

29. Small companies can have their incoming calls automatically handled with the grace of a large company’s ultra-flexible auto attendant system. This can greatly improve the professional image for a small organization.

30. Providing toll-free numbers to attract and simplify the way customers or prospects reach a business is a great use of marketing dollars. With Hosted VoIP providers, obtaining, managing and reporting toll-free numbers is cost effective and simple.

The many advantages of a Hosted PBX service can make it an ideal choice for most small business. Large PBX features can be delivered to the customer for less than the cost of a small phone system. Further, VoIP providers with their Hosted PBX or Virtual PBX services can save their customers money on their recurring telephone line charges in addition to the many other financial, operational, service and marketing benefits.