In today’s digital world, businesses have several options for their communications needs: Hosted PBX vs VoIP. Both are telephone systems that use Internet Protocol (IP) to facilitate communication. But what are the differences between these two services, and which one is right for your business?

Let’s start with a basic understanding of both hosted PBX vs VoIP.

What Is a PBX and VoIP System? How Do They Work?

At a basic level, hosted Private Branch Exchange (PBX) is an all-in-one telecom solution which handles voice, video, and data services over the internet. It gives businesses access to advanced features such as automated attendants, music on hold, conference calling, and more. PBX is expected to grow 13% in market size between 2023 to 2035.

On the other hand, Voice over Internet Protocol (VoIP) is a service that allows users to make and receive calls using only the internet. Around 31% of businesses have adopted VoIP technology, stating they use this tech due to a notable increase in productivity.

The main difference between Hosted PBX and VoIP technology lies in the infrastructure needed to support them. Hosted PBX systems require an on-premises server, while VoIP systems rely entirely on the cloud for communication.

Hosted PBX vs VoIP: The Differences

With so many options on the market, it can be hard to decide which one is right for your business. Here are a few of the key differences between PBX and VoIP:


  • Reliable connection due to quality dedicated lines
  • Requires additional hardware, such as phones and cables
  • Can be expensive depending on the size and complexity of the system
  • Connects multiple users to a single phone system within a physical location


  • Uses a broadband internet connection for communication
  • Can be used anywhere with access to an internet connection
  • Easily scalable for businesses of any size or complexity
  • Lower operational costs than traditional PBX systems

The Benefits of Each System

Both hosted PBX vs VoIP offer several benefits that are entirely dependent on what your business needs:

PBX Advantages 

  • Secure communication due to dedicated lines
  • High-quality connection for clear audio and video conferencing
  • Integration with other software applications, such as CRMs

VoIP Advantages

  • Ability to use the same telephone number across multiple locations or devices
  • Automated features such as call routing and voicemail transcription
  • Lower initial cost of setup and maintenance

The Disadvantages of Both

Although there are many benefits of each service, there are also some drawbacks you might experience with hosted PBX vs VoIP:

PBX Disadvantages

  • High initial installation and setup costs
  • Complicated to set up and maintain in-house
  • Not easily scalable for businesses that need to add more lines or users quickly

VoIP Disadvantages

  • Lower-quality connection due to shared bandwidth
  • Service can be unreliable during peak hours
  • Higher risk of eavesdropping or hacking due to its digital nature

Which Is Better for Your Business?

Hosted PBX vs VoIP: What is the right choice for your business? The answer depends largely on the size and complexity of your organization. For larger businesses, hosted PBX is often seen as the better option due to its ability to scale up quickly and easily without requiring additional hardware or setup fees.

For small businesses that don’t need a lot of features or a complicated setup, VoIP may be a good fit. It is important to consider the benefits and drawbacks of each system to decide which one is best for your business. Consider talking to an IT professional like Telewire about what type of system would work best for you. 

Take the Next Step with Telewire

At Telewire, we can settle the debate between hosted PBX vs VoIP. We understand that every business has unique communication needs. That’s why we proudly offer our own FCC-regulated Cloud PBX, or PBX-as-a-Service, which is a cloud-based VoIP system. 

Our team of experts will work closely with you to determine the best solution for your business and provide a tailored, end-to-end communication system that perfectly aligns with your specific needs. Contact us today to learn more about how our hosted PBX services can help you stay connected.