What Is Hosted VoIP? Everything You Need to Know (2025)

Managing global communications while maintaining call quality and controlling costs can feel like an impossible balancing act. As your business expands internationally, you need a reliable phone service that scales with you—without the headaches of traditional phone hardware. 

That's where hosted Voice over Internet Protocol (VoIP) phone systems come in, offering cloud-based communication solutions that eliminate on-premise equipment while providing enterprise-grade features.

In this article, we'll discuss how you can extend your reach into challenging markets by combining hosted VoIP phone systems with (Session Initiation Protocol) SIP trunking capabilities to ensure crystal-clear calls and streamline your telecommunications infrastructure.

What is hosted VoIP?

Hosted VoIP is a cloud-based business phone system that transmits voice calls over the internet rather than traditional telephone lines. Unlike traditional Private Branch Exchange (PBX) systems that rely on physical wiring and hardware, hosted VoIP operates entirely over the internet.

Your service provider hosts and maintains the core PBX system infrastructure in its data centers, which eliminates the need for on-premise hardware. This setup reduces maintenance costs and operational expenses, resulting in significant cost savings.

Gartner analysts predict that by 2025, over 85% of organizations will adopt a cloud-first strategy, driving businesses to seek flexible, internet-based communication solutions. Hosted VoIP supports this shift by providing enterprise-grade calling features accessible from any internet-connected device, whether it's a desk phone, smartphone, or computer.

How does hosted VoIP work?

Hosted VoIP works by converting analog voice into digital data packets at the start of the call. The data packets are then routed through the VoIP service provider’s cloud-based PBX over the internet and directed to the intended recipient.

The PBX, which the provider manages, routes the call to its destination and ensures that the voice data arrives correctly. Since this system travels over the internet, it works seamlessly with other online services. It also offers features like voicemail-to-email, call forwarding, and the ability to host virtual meetings.

Hosted VoIP vs. hosted PBX, cloud VoIP, and SIP trunking

Understanding the differences between various business phone solutions can help you make the right choice for your organization. Let's break down how hosted VoIP compares to similar technologies:

Hosted VoIP vs. hosted PBX

While both solutions are cloud-based, they serve different purposes. A hosted PBX focuses on call routing and basic telephony features, providing a structured phone system for businesses. 

Hosted VoIP builds on PBX functions, offering advanced capabilities like video conferencing, instant messaging, and mobile integration for a more comprehensive communication solution. Think of hosted VoIP as the evolution of hosted PBX, with enhanced features and greater flexibility.

Hosted VoIP vs. cloud VoIP

There's actually no difference between hosted VoIP and cloud VoIP—they're the same technology but with different names. Both terms refer to phone systems that service providers operate and maintain over the internet.

While the industry uses these terms interchangeably, “hosted VoIP” clearly emphasizes the service provider's role in managing the infrastructure.

Hosted VoIP vs. SIP Trunking

SIP trunking complements hosted VoIP rather than competes with it. While hosted VoIP provides your complete phone system, SIP trunking is the technology that connects your VoIP system to the traditional phone network.

SIP trunking can enhance your hosted VoIP deployment by providing direct carrier connections for improved call quality and expanded global reach.

Top hosted VoIP providers compared

Choosing the right hosted VoIP provider can be overwhelming since there are so many options on the market. Each offers unique advantages for different business needs. 

While most business VoIP providers offer standard VoIP features, they differentiate themselves through specialized capabilities, geographic coverage, and integration options.

AVOXI SoftwarDirect carrier connections; Global coverage in over 150 countries; SIP trunking integration; Compatibility with leading VoIP providers Developer Premium international coverage; Enterprise call quality with cloud voice solutions; Flexible deployment options Focuses on voice services & requires initial configuration Free demo
RingCentral Video meetings with up to 200 participants; Advanced analytics; Custom app integrations Extensive third-party integrations; Comprehensive Unified Communications as a Service (UCaaS) solution Higher learning curve & premium pricing for advanced features 14-day trial
8x8 Call center features; Team messaging; Video conferencing Global reach; Integrated contact center Basic analytics in lower tiers & limited customization options Demo
Zoom Phone Native video integration; Voicemail transcription; Auto attendant Reliable platform; Seamless video meetings Limited international coverage & basic phone features No
Microsoft Teams Phone Office 365 integration; Presence integration; Screen sharing Deep Microsoft ecosystem integration; Enterprise-grade security Requires E5 license for full features & complex setup 30-day trial
Nextiva Unlimited internet fax; Customer relationship management (CRM) platform integration; Voice analytics Excellent customer support; User-friendly interface Limited video participants & basic mobile app 7-day trial
Vonage Programmable APIs; Unified communications; SMS capabilities Flexible customization; Strong API documentation; Business app integration Complex pricing structure & requires technical expertise Demo

Data as of February 2025

Features to prioritize in hosted VoIP solutions

When evaluating hosted VoIP providers, focus on these essential features that directly impact your communication capabilities and business operations:

  • Call quality and reliability: A robust hosted VoIP solution should offer HD voice quality and maintain at least 99.99% uptime. Look for providers with redundant data centers and direct carrier relationships to ensure consistent call quality and minimal downtime.
  • Scalability and flexibility: Your system should easily accommodate growth without requiring significant infrastructure changes. Ensure that the provider offers simple user addition and removal, as well as the ability to quickly adjust resources during peak periods.
  • Security and compliance: Priority security features should include end-to-end encryption, secure user authentication, regular security updates and monitoring, and compliance with industry standards like the Health Insurance Portability and Accountability Act (HIPAA), System and Organization Controls 2 (SOC 2), and General Data Protection Regulation (GDPR).
  • Integration capabilities: Your VoIP system should seamlessly connect with your existing business tools. Essential integrations include CRM platforms, productivity suites, and help desk software to maintain workflow efficiency.
  • Advanced call management: Look for features like intelligent call routing, auto-attendant, call recording, and real-time analytics. These tools help you optimize call handling and improve customer experience.
  • Mobile accessibility: The solution you choose should offer robust mobile apps with full feature parity, which allows your team to maintain productivity whether they're in the office or working remotely.

Hosted VoIP implementation best practices

A successful hosted VoIP deployment requires careful planning and execution. Follow these critical steps to ensure a smooth transition:

  1. Assess your business needs: Start by evaluating your current call volume, peak usage times, and specific feature requirements. Take your growth projections and international communication needs into account to ensure that the solution you choose can scale effectively with your business.
  2. Verify network readiness and bandwidth optimization: Before implementation, run network tests to determine whether your internet connection can handle VoIP traffic. To maintain call quality, implement quality of service settings that prioritize voice traffic and allocate sufficient bandwidth, especially during peak usage periods.
  3. Choose the right hosted VoIP provider: Not all providers offer the same capabilities, so it's important to select one that aligns with your business needs. Consider key factors like geographic coverage, technical support quality, and how well the provider integrates with your existing systems to ensure a seamless transition.
  4. Implement strong security measures: Though cloud solutions offer flexibility, they also raise concerns about breaches, data loss, and unauthorized access. To address these risks, you need to deploy robust security protocols, including strong passwords, two-factor authentication, and encrypted connections. Establishing clear security policies for remote access and device management helps ensure comprehensive protection.
  5. Plan for number porting and business continuity: Transferring existing numbers can be complex, so creating a detailed timeline will help you prevent service disruptions. It’s also wise to develop contingency plans for potential outages by arranging backup internet connections and implementing failover procedures.
  6. Monitor performance: Once your VoIP system is live, continuous monitoring keeps service quality high and ensures smooth operation. Tracking tools help evaluate call quality, system usage, and user adoption, providing valuable insights. Regular performance reviews also allow you to detect and resolve issues early, preventing disruptions before they impact your business.

Should you integrate hosted VoIP and SIP trunking?

Combining hosted VoIP with SIP trunking can maximize your communication capabilities while optimizing costs. Here's how integration can benefit your business:

  • Expanded global coverage: With hosted VoIP and SIP trunking, you can connect directly to carriers in different countries to ensure seamless call routing and reliable service in any market. Instead of establishing a physical presence, you can instantly deploy local numbers while complying with regional regulations. This approach strengthens your international reach, keeps your operations efficient, and allows you to retain existing phone numbers while expanding globally.
  • Improved call quality: Optimized routing paths reduce latency and prevent dropped calls. With carrier redundancy in place, you can maintain a stable connection, even during peak usage, ensuring consistent performance when call traffic is high. This reliability, combined with HD voice codecs, delivers crystal-clear audio. 
  • Reduced costs and easier scaling: You can replace costly international toll charges with local connections and pay only for the capacity they need. This flexibility allows you to scale up or down based on demand, eliminating unnecessary expenses without sacrificing service quality. By consolidating vendors, you also simplify management and billing, creating a more efficient communication setup.

How AVOXI's hosted VoIP makes global connection easier

As your business expands globally, you’ll need a VoIP solution that keeps pace with your growth while maintaining enterprise-grade call quality. AVOXI offers comprehensive UCaaS and Contact Center as a Service (CCaaS) solutions that enhance global connectivity. 

AVOXI's hosted VoIP services specifically address these challenges through three key capabilities:

1. Ensuring compatibility with leading VoIP platforms

AVOXI seamlessly integrates with major CRM platforms like Microsoft Teams, Zoom, and other leading VoIP solutions. This compatibility ensures that you can enhance your existing communication infrastructure without disruptive changes. That way, your team can maintain the workflow they’re used to while gaining access to expanded global coverage and improved call quality.

2. Bridging coverage gaps in challenging markets

When your business needs to reach markets where traditional providers struggle, AVOXI can deliver reliable connectivity through direct carrier relationships. This network of local partnerships ensures consistent service quality and regulatory compliance in over 150 countries, allowing you to expand confidently into new territories.

3. Providing premium voice services via direct carrier partnerships

Direct carrier partnerships improve call quality by eliminating intermediate hops—the network devices like routers, switches, or gateways that data packets pass through from the source to the destination–that can degrade call quality. 

AVOXI maintains carrier-grade infrastructure with built-in redundancy so your calls are crystal clear and reliable. Real-time monitoring and automated failovers protect your business from service disruptions while maintaining enterprise-grade call quality.

Scale your business with reliable hosted VoIP

Selecting the right hosted VoIP solution is crucial for businesses that are expanding their global communications. By prioritizing features like call quality, security, and scalability while following proper implementation practices, you can ensure a successful deployment that supports your organization's growth.

AVOXI is a leading hosted VoIP provider for businesses that want reliable global coverage and premium call quality. With direct carrier relationships in over 150 countries, seamless integration capabilities, and enterprise-grade infrastructure, AVOXI delivers the robust communication foundation you need to connect confidently across international markets.

Ready to enhance your global business communications? Contact AVOXI today to learn how our hosted VoIP solutions can support your business growth.

Commonly Asked Hosted VoIP Questions

Hosted VoIP typically costs $10–$30 per user per month for basic plans. Prices vary based on the provider, features, and number of users you select. Premium plans with advanced features may cost more.