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Hosted PBX Systems: The Essential Guide

Updated on February 1, 2015

What is hosted PBX exactly?

Office employees, working class, or some techy people may already be aware of what is the definition of hosted PBX and its uses. However, for a regular netizen, a common online user, hosted PBX might be a new terminology worth looking at.

For the benefit of those who are not yet aware, a hosted PBX system is a type of low cost communication system. This type of system can be leased or rented monthly or annually, can be used by large organizations, SMEs (Small and Medium Enterprise), even for household use.

Since the communication system is rented, this eliminates the need of buying the communication equipment. Needless to say, hosted PBX’s main advantage is cost. Hosted PBX is a cheap but reliable communication system able to organize and handle both incoming and outgoing calls.

Hosted PBX – also referred to as virtual PBX, has evolved to a degree that it can offer more benefits and services than a traditional phone system. Some applications a virtual PBX system can offer are

  • SIP trunking
  • Intelligent call routing, forwarding, blocking, etc…
  • Detailed call history and usages
  • Conference calling
  • Video conferencing

One may wonder “With all its capabilities, how long it would take to get the virtual PBX system installed, up, and running? Surely, it will be longer than the traditional phone system” Interestingly, a hosted PBX system would be up and running faster and easier than the traditional phone system. Remember, the above mentioned info that no equipment would be bought, hence, no installation (and its associated installation fees).

The actual equipment used by a hosted PBX system resides with the CSP (communication service provider). Functionality of these equipments are hosted by the provider and routed through said provider to and from a subscriber’s office or site.

History and Concept and Hosted PBX

Hosted PBX is actually a virtual representation of a traditional PBX system. As can be recalled, a PBX (acronym for Private Branch Exchange) has been employed and utilized by large organizations to handle all of the company’s call traffic. A PBX system is a good solution to handle all internal traffic between employees and external voice traffic to and from the office.

However, traditional PBX is quite expensive because it requires the actual PBX equipment. This would include installation, location, and maintenance fees. The equipment must be within the vicinity of the building which follows that it will take some land area. Installation and Maintenance can be done by trained 3rd party technicians or training some personnel of the technical department of the organization.

Requirements of a Hosted PBX system

Hosted PBX is like an answered prayer for some business owners – especially the ones who would or cannot afford the high price of traditional PBX but badly needs the system. As mentioned, virtual PBX may offer all the functionalities of a traditional PBX and even more.

Hosted PBX systems are able to operate even without the physical equipment because it runs on IP networks. In simpler terms, the medium used by virtual PBX are: data networks, LAN, the Internet. In this alone, one will notice that hosted PBX takes advantage of existing office data network circuitry. No need to put in additional cost and space for voice and data to interconnect with each other.

Another advantage of this is that maintenance and troubleshooting is done in the provider’s side. No need to hire or train personnel. Of course, there are some who would assign administrator or point person to be contacted by the technical support group of the hosted PBX provider.

The added functions, numerous capabilities, and cheap cost, makes hosted PBX system an excellent choice for any organization.


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      Just Passing By 6 years ago

      Hi! Any recommendations? Rough estimate of fees?


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      James 6 years ago

      When I started my business, I did not want to use my home line so I signed up for a virtual phone service. My clients never know that I work from home because when you call my number, you hear, “Thank you for calling. Please enter the ext # of the person you would like to reach. Press for 1 sales etc. And all the calls are forwarded to my home line. I’ve been using a service called by COA Network,, for about a year. It was extremely cost effective and really easy to setup. I’m very happy with the service.