September 20, 2021
What are the Different Types of Telephone System?

What are the Different Types of Telephone System?

Read time:
4 Minutes

If you’re looking to upgrade your business telephone system, then the vast array of options can be daunting. We’re here to help you find the best option for your business—by breaking down what types of telephone systems are available, and which option might be best for you.

There are three main types of business telephone system, they are:

  • Hosted telephone systems
  • On-premise PBX telephone systems
  • Hybrid VoIP telephone systems

These three types of telephone system make up the vast majority of what’s on the market today. Most businesses are using one of these three systems, whether they’re working from home, or based in a centralised office location.

Read more about the three different types of telephone systems below to find out which one suits your business.

Hosted Telephone System

Hosted telephone systems, often called ‘VoIP telephone systems’ are a virtual phone system, hosted in the cloud. As with most cloud solutions, the flexibility of hosted telephone systems are their biggest advantage.

With no on-site hardware required, you can issue your team with their own phone or soft phone user and have them connect to your telephone system—whether they choose to use a VoIP powered desk phone, a mobile app, or even a computer soft phone.

Hosted Telephone System Mobile App
Hosted Phone System Mobile App

How does a hosted telephone system work?

Hosted telephone systems use your broadband connection to make and receive calls. This negates the requirement for multiple telephone lines, making it more cost effective than the alternatives.

Hosted telephone system diagram
Hosted telephone system diagram

Most businesses are moving their telephone system to the cloud. The ease of use, scalability and flexibility of hosted telephone systems make them a much better alternative to the traditional communication methods.

And, with a hosted telephone system, you’ll still have access to enterprise-level features, such as:

  • Auto attendants and hunt groups
  • Call queuing
  • Call transferring, holding and forwarding
  • On hold music and messaging
  • DDi/extensions for each user
  • And more

Advantages of hosted telephone Systems

Hosted telephone systems are by far the most cost effective option for most small to medium businesses, with reduced hardware, no leasing and call bundles included

ISDN Switch-off ready
In 2025, the UK’s ISDN will be switched off. In short, this means that traditional on-premise solutions and telephone lines will no longer work—meaning that every business will need to switch to VoIP in the coming few years.

Easier home working/mobility
Mobile apps and softphones work seamlessly with hosted telephone systems. With no complicated setup, you can give users the ability to work from home with no hassle.

Disadvantages of hosted telephone systems

As a hosted telephone system uses the cloud, it can be seen as ‘less robust’ than it’s on-premise counterpart. However, we have methods (such as dedicated hosting) to mitigate any effect this might have.

Overall, hosted telephone systems are the most popular and most up-to-date option for businesses across the UK. Whether you’re upgrading an existing system, or starting a new business—they’re perfect for businesses of every size and shape.

2. On-Premise PBX Telephone System

On-premise PBX telephone systems, often refereed to ‘on-prem’, are the grandad of the telecoms world. Having been around for many decades, they have long been the backbone of business communications.

On-premise PBX telephone systems are a physical piece of hardware in your office. Often stored in a comms cabinet or store room, they make and receive your office telephone calls, directing them to different members of staff and controlling the general call flow of your business.

On premise PBtelephone system

As you might imagine, having a physical piece of hardware in your office means that upgrades, installation and adding users can be costly and difficult—as site visits are sometimes required.

How does an on-premise PBX telephone system work?

On-premise telephone systems use telephone lines to carry their calls. With one line being able to carry a single call. Most businesses with a PBX have multiple telephone lines to carry their concurrent calls.

On premise PBX telephone system diagram
On premise PBX telephone system diagram

An on-premise system takes these calls, and directs them to their location—whether that is a main switchboard, or directly to a user. The PBX also deals with inter-company dialling, transferring and holding.

There is no hiding the fact that on-premise PBX phone systems are outdated. They’re old fashioned, bulky and often not fit for purpose, especially with businesses embracing home working and more flexible positions.

Advantages of on-premise telephone systems

With physical, on-premise hardware, there is that ‘traditional dependability’ that comes with a piece of kit, and some businesses prefer to have a physical phone system.

Disadvantages of on-premise telephone systems

It is not very easy to scale an on-premise telephone system. Often physical changes and upgrades are required—which can be quite costly.

Outdated technology
Lets not beat around the bush—the technology in on-premise telephone systems are outdated, old fashioned and not as future-proof as their hosted equivalent.

With long term lease agreements, maintenance, hardware upgrades and expensive lines and calls, an on-premise telephone system often comes with a whole host of avoidable costs.

Overall, we would recommend most businesses stray away from on-premise telephone systems. They’re costly and often not fit for purpose. Most SME’s would be better off with a hosted telephone system. If you’re keen on keeping an on-premise telephone system, but want to reduce costs, then a hybrid solution may be best for your business…

3. Hybrid VoIP Telephone System

Hybrid telephone systems (often called IP-PBX or ‘VoIP PBX”) are a combination of hosted and on-premise systems. They bridge the gap between a fully cloud based solution, and a fully on-premise telephone system.

Upgrading to a hybrid telephone system is the perfect solution to those who don’t want to wave goodbye to their existing telephone system, or are still tied into a lease agreement; but want to save some money and prepare for the ISDN switch off.

Hybrid telephone system

How does a hybrid telephone system work?

Hybrid telephone systems use the connectivity of a hosted system for their voice, while retaining the physical on-premise hardware. With a hybrid telephone system, you can use your existing broadband connection for calls, as well as data.

By making better use of this connection, you can reduce call charges and line bills—while retaining your existing on-premise telephone system.

Hybrid telephone system diagram
Hybrid telephone system diagram

These hybrid telephone systems often use a technology called SIP Trunks, which are essentially a ‘virtual’ telephone line. SIP Trunking allows you to add home users, soft phones and other features that are typically come with a fully hosted solution.

Advantages of hybrid telephone systems

Cost reduction
Moving to a hybrid telephone system is a great way to reduce some of your running costs. By eliminating line bills, call charges and more.

More features
On-premise telephone systems are often limited by their feature set, but with a hybrid phone system, you can have access to some of the great features of hosted, without needing to move away from an on-premise system.

Disadvantages of hybrid telephone systems

Still using on-premise technology
While hybrid telephone systems do make your communications more modern, with an updated technology and standard, they are still using your existing PBX telephone system for call control, which is often outdated.

Hybrid telephone systems do come with greater flexibility than on-premise, but they don’t come close to the flexibly of a fully hosted solution.

Overall, we would recommend that hybrid telephone systems for those looking to move to VoIP communications, but want to keep their on-premise telephone system. It’s a great solution for the short to medium term, and will help your business migrate slowly towards a fully hosted solution.

Which type of telephone system is best for my business?

The honest answer is: it depends. With telephone systems, there is no ‘one-size-fits-all’ solution. While the most popular and most common type for SMEs is a hosted telephone system, your business may well not be suited to this setup.

We would recommend speaking to one of our technical team to go through what you have at the moment, and what you require in future and they’ll be able to advise on the best solution for your businesses needs. Or select ‘online quote’ at the top of the page to get more information about a telephone system built for your business.

If you have any questions, or would like some more information about how Bytes Digital can help your business, email hello@bytesdigital.co.uk give us a call on 03331 301 021.

Or, get your free, no obligations online quote using the button below...

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