Hosted VoIP Phone Systems for Small Business [FAQ]

Looking at hosted VoIP phone systems for small businesses? You're in the right place. Here is an information-packed FAQ on hosted VoIP solutions, starting with the basics and ending with a few modern hosted VoIP options for your business.

What Is a Hosted VoIP Phone System?

A hosted VoIP phone system is an IP-based phone system for businesses that is hosted by a service provider. Without running any on site equipment, businesses can connect phones to their hosted VoIP provider over the Internet and leverage business telephony features such as dialing the Public Switched Telephone Network (PSTN), extension dialing, auto attendants, voicemail-to-email, call routing rules, etc.

Is Hosted VoIP Reliable? High-Quality?

Business professionals who are just now considering hosted VoIP might ask, "is it reliable?" and/or, "is it high-quality?" This is typically because they’ve had an experience with a free VoIP service, such a Google Voice or Skype— and you get what you pay for. Free VoIP services are engineered to minimize the provider's costs, which can lead to oversubscribed networks and quality degradation. 

The answer is a resounding yes, not only are many hosted business VoIP services reliable, they offer high-definition voice and other capabilities, such as deep data integrations and video conferencing.

These advancements, combined with the cost efficiencies of utilizing the same physical network that your computers do, drive hosted VoIP adoption. Today, more businesses “already use VoIP service (36 percent of our sample) than any other type of voice service (POTS usage is at 24 percent, and PRI usage is at 11 percent)," and the adoption rate of hosted VoIP has now matched that of on-premise VoIP systems [].

What's Needed for a Hosted VoIP Phone System? 

Adequate Internet Connectivity

Not surprisingly, the key aspect of successfully using a hosted VoIP service is quality Internet connectivity. For multiple phones in an office location, you’ll need business-grade broadband with enough bandwidth. We rarely encounter businesses that don’t have “enough” bandwidth, but a fast-and-hard rule is: One VoIP call requires 100 kbps each way to be safe— 200 kbps total. An average business can anticipate 1 call per 10 employees at all times. So, if you have 10 employees, figure you need 200 kbps dedicated to VoIP traffic at all times. (It can be 5-10x this amount for video calling.)

If you’re supporting phones at homes, residential broadband that allows you to stream video (e.g. YouTube) with negligible buffer times and hiccups is likely good enough.

Adequate Router

Offices leveraging hosted VoIP need business-grade routers. A residential router will not cut it, simply based on the amount of traffic it needs to handle. (Some hosted VoIP providers require router configurations only available on business-grade routers, as well.)

Not sure if you have an adequate router? Learn about what separates a business router from a consumer router here. Better yet, give us a call, or consult your router manufacturer. 

VoIP Phones

To use hosted VoIP, it’s best to used IP phones, meaning desk phones with Ethernet ports, or software phones. With some hosted VoIP providers,  you can use Analog Telephone Adapters (ATAs) with plain old telephones. However, this limits the phone capabilities; for example, they will not support HD voice. If you’re switching to hosted VoIP, and you plan to grow your business beyond just a few employees, we recommend you purchase IP phones.

And not just any IP phones. Get SIP phones. Session Initiation Protocol (SIP) is the de facto standard VoIP protocol. Be very weary of any provider that requires you to purchase non-standard phones or phones that are locked with their software. Purchasing standard SIP phones will give you the freedom to switch providers down the line, should you need to. Your investment will go farther.

Can You Use Mobile Phones with Hosted VoIP?

Yes. As mentioned above, VoIP makes it possible to use software phones (softphones) instead of, or in addition to, physical desk phones. The term mobile VoIP refers to using an app that allows you to make VoIP calls. In other words, you can download a softphone app to receive all of your work calls, and your outbound calls will appear with your professional caller ID.

Wondering about quality? It depends on your wireless network. VoIP over WiFi can deliver excellent call quality— if you have excellent WiFi. In addition, VoIP over a strong 4G LTE signal on a mobile network can also deliver reliable HD voice.

If you’re considering using mobile VoIP full-time, test the quality before you make your final decision. Also note: Most mobile VoIP apps take a pretty big toll on your cell battery when running continuously. 

What Should Be Considered When Researching Hosted VoIP?

If you’re just beginning to research hosted phone system solutions, start by listing key points regarding your needs:

  • Number of employees?
  • Number of phones you anticipate? 
  • Number of conference phones you anticipate? 
  • Need to port phone number(s) or purchase?
  • Current phone usage (inbound/outbound minutes)?
  • All employees have broadband Internet access?
  • Must-have phone system features: voicemail, auto attendant, ring routing, business-hour rules, call detail records, etc.
  • Must-have collaboration features: conference calling, text chat
  • Must-have call center features: Automatic Call Distribution (ACD) queues, real-time dashboard, reporting, recording

Want more? Click here for an extensive list of phone system features to consider. This information is a great starting point to expedite the quoting process with hosted VoIP providers.  

What Are Today's Hosted VoIP Phone System Options?

Here are hosted VoIP options by your business size:

Vonage Personal - Single Employee Home Office

As a single employee home office, you likely need a dedicated business phone number, reliable connectivity, and voicemail. We recommend Vonage Personal, which runs $9.99/mo for a full year for unlimited calling to the U.S, Mexico, Canada, and Puerto Rico. Vonage delivers a free phone adapter (ATA), so you will not need to purchase a phone if you have one.  

Note: If you plan on hiring any time soon, see the next up recommendation.

Ooma Business - Small Office of 2 - 4 Employees

If you have up to four employees, you would likely benefit from a main business phone number, an auto attendant to answer your calls, extension dialing, and a voicemail box per employee. These are basic phone system features also offered in the next up recommendation, but they are not typically big enough requirements to constitute the cost jump. For this range, a recommended service is Ooma for Business

Ooma for Business requires a one-time purchase of the Ooma Office Base station at $249.99. After that, it’s $9.99 per month per user. This price includes unlimited U.S. and Canada calling, extension dialing, voicemail per user, ring groups, and music on hold.

While Ooma does expand to 20 employees, scaling it to 5 users and beyond puts you in $50/mo range, where you can get more phone system functionality and value with other providers. As a hosted VoIP provider, we at OnSIP are biased and hope you’ll consider our service. But, we've added a competitor below to highlight key differences.

OnSIP Hosted VoIP - High Flexibility & Efficiency for 5 or More Employees

OnSIP Business VoIP is the most flexible, efficient option for U.S. small and medium sized businesses. We offer over 50 phone system features with a unique pay-as-you-go pricing plan that allows your phone system to scale with your business. Pay only for the phone system features and external calling minutes they actually use. Users, phones, lines, and on-network calling are free. OnSIP gives you control to add and remove features in the OnSIP Admin Portal, saving businesses time and money on additional IT assistance. 

For example, the 5-seat businesses garner the basics at $49.95/mo (+ PSTN usage) for 5 voicemail boxes, auto attendants, ring groups, a dial-by-name directory, announcements, music-on-hold, and WebRTC-based calling solution sayso.

Our larger customers typically add features like HD conferencing suites (10 for $50), Smart Queues and its real-time dashboard ($14.95/user), and integrations with leading platforms Zendesk and Salesforce. With OnSIP, businesses can drive their costs down to as low as $16 per user.

OnSIP offers the freedom to use any SIP standard desk or softphone, including our free web phone. Our platform is geographically distributed and scalable for enterprise-grade reliability. And finally, our friendly U.S.-based Customer Success Team has earned us an American Business Award and 98% satisfaction rating.

8x8 Hosted VoIP - Robust Bundled Features, Unlimited Pricing for 5 or More Employees

If your business is heavily phone-based (e.g. call center or phone sales), you might look for a provider with an unlimited business VoIP calling plan. Most of our hosted VoIP competitors offer this, but we’ll highlight 8x8 here for its longevity and reliability. 8x8 is one of the biggest brand name hosted VoIP providers with enterprise-grade features and unlimited calling bundled at a per-seat price.

In addition to phone system features, collaboration applications, and call center features, they also boast the highest levels of security and compliance accreditation. Furthermore, if your business is located outside of the U.S., 8x8 services International offices. 

8x8 does not publish their pricing, but we’ve heard from past customers it can range $29.99 - $49.99 per user for their virtual office plans, pending your needs. Their call center software is separate and can run an additional $100+ per user.

Topics: SMB Leadership, Business Technology