Hosted PBX
A hosted PBX is a business phone system that runs in the cloud, delivered and maintained by a provider, instead of sitting as hardware in your building. It handles the same job a traditional on-site phone system did — routing calls to the right people — but over the internet.
PBX stands for Private Branch Exchange (you'll also see PABX, Private Automatic Branch Exchange). Traditionally it was a box in a comms room. A hosted PBX moves that box into the provider's data centre and delivers it as a service over VoIP.
It's often confused with a cloud contact centre, but they solve different problems — a distinction this guide makes clear.
This guide explains what a hosted PBX is, how it works, how it differs from an on-premise PABX and from a cloud contact centre, and how to choose one.
What it is
A business phone system (PBX) hosted in the cloud by a provider and delivered over the internet, rather than run on hardware on your premises.
Why it matters
It's how many businesses replace an ageing on-site PABX as copper and ISDN are switched off — with no hardware to buy or maintain.
What this guide covers
What a hosted PBX is, how it works, hosted vs on-premise PABX, hosted PBX vs cloud contact centre, and choosing a provider.
What is a Hosted PBX?
In plain English
A PBX is the phone system that connects calls within a business and out to the public network — transferring calls, running extensions, hunt groups, voicemail and auto-attendants. A hosted PBX does all of that from the cloud: the provider runs the system in their data centre, and your handsets, softphones and apps connect to it over the internet.
You get the features of a business phone system without buying, housing or maintaining any of the hardware yourself. It's also called a cloud PBX or hosted phone system.
Because it runs over VoIP, a hosted PBX is location-independent — staff can connect from the office, home or a branch using the same system and numbers.
What it is
A cloud-hosted business phone system that routes calls and provides phone features as a service, delivered over the internet.
What it isn't
It's not a contact centre platform. A hosted PBX handles business telephony; it doesn't provide the queuing, routing and reporting a contact centre needs (see below).
How a Hosted PBX Works
Instead of a phone system on site, everything is delivered from the provider's cloud.
The PBX lives in the cloud
The provider hosts and maintains the phone system in their data centre, updating and securing it for you.
Devices connect over the internet
Your IP phones, softphones and mobile apps register to the hosted PBX over your internet connection.
Calls are routed as VoIP
The PBX routes internal and external calls using VoIP, handling extensions, transfers, voicemail and menus.
You manage it online
Adds, moves and changes are made through a web portal rather than a technician visiting your comms room.
💡 Typically a per-user subscription
Hosted PBX is usually charged per user per month, with no upfront hardware cost. That shifts phone systems from a capital purchase to an operating cost, and makes it easy to add or remove users as your team changes.
Hosted vs On-Premise PABX
The core difference is where the phone system lives and who looks after it.
On-premise PABX
The phone system is hardware in your building that you buy, house and maintain, usually with IT or a phone vendor. It gives you full control, but means upfront cost, ongoing maintenance and physical connections such as ISDN or SIP trunking.
Hosted PBX
The provider runs the phone system in the cloud and delivers it as a subscription. There's no hardware to maintain, updates are handled for you, and you can scale and manage it online — trading some control for simplicity and flexibility.
Hosted PBX vs Cloud Contact Centre
This is the distinction that trips people up. Both are cloud-based and both run on VoIP, but they're built for different jobs.
Hosted PBX — business telephony
Designed to run a whole organisation's phones: extensions, transfers, voicemail, auto-attendants and hunt groups. It's about connecting people across the business efficiently.
The one-line distinction
A hosted PBX runs your office phones; a cloud contact centre runs your customer service operation. Some businesses use a hosted PBX for staff and a separate contact centre platform for their customer-facing teams. If you need queuing, routing and agent reporting, you need a contact centre solution, not just a PBX.
The Australian Angle
For Australian businesses, hosted PBX is one of the main destinations as the old networks are retired.
A common path off copper and ISDN
As the traditional copper (PSTN) network is switched off through the NBN migration, and Telstra retires ISDN services, many businesses replace an ageing on-site PABX with a hosted PBX rather than buying new hardware. The alternative is to keep an existing system and move it to SIP trunking.
Either way the destination is VoIP over the NBN. Which path suits you depends on the age of your current system, number of sites, and whether you're also modernising your contact centre. This is general information, not telecommunications advice.
Choosing a Hosted PBX Provider
Providers differ on features, reliability, support and price, so compare against what your business actually needs.
💡 What to look for
Consider call quality and network reliability, the features included (voicemail-to-email, auto-attendants, mobile apps, integrations), number porting, support and onboarding, resilience if your internet drops, and per-user pricing. If any teams are customer-facing at volume, check whether you also need contact centre capabilities the PBX won't cover.
💡 Compare providers
The Business Phone Systems section of the ACXPA Supplier Directory lets you compare hosted PBX and phone system suppliers, and the Contact Centre Technology category covers platforms for customer-facing teams.
Frequently Asked Questions About Hosted PBX
What is a hosted PBX in simple terms?
A hosted PBX is a business phone system that runs in the cloud rather than as hardware in your building. The provider hosts and maintains it in their data centre, and your phones, softphones and apps connect to it over the internet. It handles call routing, extensions, transfers, voicemail and auto-attendants, all delivered as a subscription service over VoIP.
What is the difference between a PBX and a PABX?
In practice they mean the same thing. PBX stands for Private Branch Exchange and PABX for Private Automatic Branch Exchange — both refer to the phone system that routes calls within an organisation and out to the public network. PABX is the older term from when exchanges became automatic; today the two are used interchangeably, and a hosted PBX is simply that system delivered from the cloud.
What is the difference between a hosted PBX and an on-premise PABX?
An on-premise PABX is hardware you buy, house and maintain in your building, giving you full control but with upfront cost and ongoing maintenance. A hosted PBX runs in the provider's cloud and is delivered as a per-user subscription, with no hardware to maintain and updates handled for you. The main trade-off is control versus simplicity and flexibility.
What is the difference between a hosted PBX and a cloud contact centre?
A hosted PBX runs your organisation's office phones — extensions, transfers, voicemail and auto-attendants. A cloud contact centre is built to handle high volumes of customer interactions, with queuing, skills-based routing, IVR, ACD, call recording, dashboards and agent management. If you need those customer-service capabilities you need a contact centre platform, not just a PBX; some businesses run both.
Does a hosted PBX use VoIP?
Yes. A hosted PBX delivers calls over the internet using VoIP, which is what makes it location-independent and removes the need for on-site hardware. It connects to the public telephone network through the provider, often using SIP, so your business keeps its numbers while calls travel as data.
Is a hosted PBX good for a call centre?
A hosted PBX is designed for general business telephony, not for running a contact centre. It lacks the queuing, skills-based routing, IVR, ACD and reporting that customer-facing teams need at volume. A small team taking occasional calls may manage with a hosted PBX, but a genuine contact centre is better served by a cloud contact centre platform, which is purpose-built for the job.
How much does a hosted PBX cost?
Hosted PBX is typically charged per user per month, with little or no upfront hardware cost. The exact price depends on the provider, the features included and the number of users, and there may be extra costs for handsets, number porting or call charges. Because it's a subscription, it shifts phone systems from a capital purchase to a predictable operating cost that scales with your team.
Where to Next
Summary: Hosted PBX
A hosted PBX is a business phone system run in the cloud by a provider and delivered over the internet, replacing the on-site PABX hardware businesses once kept in a comms room.
It routes calls, runs extensions, voicemail and auto-attendants, and is typically charged per user per month with no hardware to buy or maintain. Because it runs on VoIP, staff can connect from anywhere.
Crucially, a hosted PBX runs your office phones — it is not a cloud contact centre, which adds queuing, routing, IVR, ACD and agent reporting for customer-facing teams at volume. The other route off legacy lines is to keep your current system on SIP trunking.
In Australia it's a common destination as copper and ISDN are switched off through the NBN migration. To compare providers, browse the Business Phone Systems section of the ACXPA Supplier Directory.
