What Is Hosted VoIP? A Plain-English Guide for Business Owners

If you've been shopping for a new phone system, you've probably seen the term "hosted VoIP" everywhere. But what does it actually mean, and is it right for your business?

VoIP in 30 Seconds

VoIP stands for Voice over Internet Protocol. Instead of sending your voice over traditional copper phone lines, VoIP converts your voice into data and sends it over the internet — the same connection you use for email and web browsing.

"Hosted" means the system runs in the cloud, managed by your provider. You don't need to buy, install, or maintain any server hardware in your office.

How It Works

When you make a call with hosted VoIP:

1. Your voice is captured by a phone, headset, or computer microphone
2. It's converted into digital data packets
3. Those packets travel over your internet connection to your VoIP provider's data center
4. The provider routes the call to the recipient — whether they're on VoIP or a traditional phone line

The whole process happens in milliseconds. With a decent internet connection, call quality is equal to or better than a traditional landline.

What You Get That Landlines Don't

The real advantage of hosted VoIP isn't just cost — it's what the system can do:

• Work from anywhere — take your business line on your phone, laptop, or desk phone at home
• Auto-attendant — professional call routing without a receptionist
• Voicemail-to-email — get voicemail transcriptions in your inbox
• Call recording — for training, compliance, or quality assurance
• Analytics — see call volume, wait times, and team performance in real time
• Easy scaling — add or remove users in minutes, not weeks

What Does It Cost?

Traditional VoIP providers charge per extension — typically $25-$45 per user per month. That adds up fast when you include conference rooms, lobbies, and fax lines.

Some providers, like TechWave, use a smarter pricing model based on employee count rather than extensions, which can cut costs significantly for most businesses.

What You Need to Get Started

The barrier to entry is low:

• Reliable internet — a standard business broadband connection works for most teams
• IP phones or softphones — many existing desk phones can be reused, or your team can use apps on their computers and mobile devices
• A provider you trust — look for transparent pricing, no long-term contracts, and responsive support

Is Hosted VoIP Right for You?

Hosted VoIP is a strong fit for most businesses, especially if you:

• Have remote or hybrid employees
• Want to reduce your monthly phone bill
• Need features like call recording, analytics, or auto-attendant
• Are tired of dealing with aging phone hardware

The main exception is businesses in areas with unreliable internet. VoIP depends on your connection, so if your internet goes down, so do your phones (though most providers offer mobile app failover for exactly this scenario).