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Hosted PBX phone systems

Hosted PBX phone systems

(Understanding the low cost hosted PBX)

The search for a hosted PBX phone system can raise all sorts of unexpected and technical

questions. Like – What is a hosted PBX? Is it the same as a Virtual PBX? How does it work?

And where do I start?

This handy guide will set you on the path to understanding hosted phone systems and help

you to compare and choose the right cloud communications service for your business.

hosted phone system

Before hosted phone systems (the bad old days)

Not so long ago, if a business wanted to operate multiple phone lines in their office, they

needed a special piece of equipment called a PBX (short for private branch exchange). A PBX

phone system provides the technical ‘smarts’ to deliver multiple calls at the same time. It

also allows those calls to be handled through manual features (like call transfer) or

automated features (such as a mobile diversion or hunt group).

But, traditionally, this powerful technology has come with significant challenges.

Challenge #1 – Equipment costs

Traditionally, PBX phone systems have been an expensive investment. An office PBX can cost thousands of dollars by itself, not to mention compatible handsets, configuration and setup costs, office cabling and networking. Furthermore, traditional PBX has a limited number of device ports. (Each port is one handset/user). So company growth requires the purchase of a new (larger capacity) PBX, and further costs for setup and configuration.


Challenge #2 – Line rental and call costs

Not only are users stuck with a significant upfront cost, but they’re subject to hefty ongoing costs too. Traditional PBXs use the old-fashioned (PSTN / ISDN) landline network. This means that every single user requires a separate phone line with a seperate phone number, compounding monthly line rental costs.

Furthermore, the legacy phone networks can often have high call rates and flagfall charges. If you use the phone alot, this will quickly compound your monthly charges.

Challenge #3 – Technical limitations

Traditional PBXs are notoriously complicated systems. And, when housed and managed in-office, require a specialist technician or IT consultant to make system changes. Sometimes, the cost and complexity mean that the phone system is almost unusable.

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