Hosted PBX vs SIP Trunks - Which is Better?

Hosted PBX vs SIP: Everything You Need to Know

The time is now to move to VoIP communications. Like many other business owners and decision-makers, you’ll be looking for the best solution that will not just support your business, but will help it to grow and flourish. When looking to upgrade your phone system to enjoy all the benefits VoIP has to offer, the key question that arises is: should you choose SIP trunking or hosted PBX? Although both solutions, ultimately, offer the same result of empowering your business to move away from analogue telephony and take advantage of VoIP, as well as similar functions, their key technical, financial and logistical differentiators need to be considered in order to choose the right solution for your needs.

We’re going to take a look at each solution to give you a clear overview of what they have to offer and key considerations for both solutions, to help you make the right choice for your business.


What is Hosted PBX?

PBX stands for Private Branch Exchange and is the private telephone network used by a business to connect their phones in order to place and receive voice calls. There are two main types utilised by businesses. Traditional PBX, still relies on the PSTN – a network of analogue, copper wires that will become obsolete by 2025. IP PBX works using the SIP protocol, which is a communications protocol that enables calls via the internet.

A hosted PBX is a phone system that is managed by a third-party provider rather than you having to monitor and manage it yourself. When you utilise hosted PBX, there’s no need for on-premise PBX equipment or in-house teams to manage the phone system – all of this is taken care of by the provider. Other names you may have come across for hosted PBX include:

  • Virtual PBX
  • Cloud PBX
  • Cloud phone system
  • Hosted VoIP

Related: Hosted Phone Systems – What’s All the Fuss About


What is SIP Trunking?

SIP trunking is a VoIP service that connects your business’s existing PBX to the internet, allowing you to utilise your existing equipment. The SIP trunk works by providing a direct virtual connection between the two infrastructures – your onsite PBX equipment and VoIP and replaces traditional analogue lines. This technology carries calls by breaking down voice, text and video calls into data packages that are then transported over the network via the internet. SIP is capable of transporting larger volumes of data in comparison with analogue telephony and, is therefore, more suitable for the needs of the modern businesses.

With SIP trunking, you can save money by converting your existing PBX to support VoIP telephony, rather than purchasing an entirely new solution. Further to this, you can leverage your system with SIP technology to enjoy a wider range of features, including video calls and instant messaging to improve the experience of both your employees and your customers.

Related: SIP Trunks – This is Not SIP Trunks for Dummies, It’s SIP for Anyone


What are the Differences between PBX and SIP?

Diagram explaining the difference between Hosted PBX vs SIP Trunking

Ok, so now we’ve looked at a basic overview of each solution, let’s look at the solutions side by side to compare the differences.

Who is it best for?

  • Hosted PBX: Smaller businesses with around 50 or less employees who either don’t have, don’t want or can’t afford expensive on-premise PBX infrastructure and the maintenance of it.
  • SIP Trunks: Larger companies with 50 or more employees, who already possess on-premise PBX hardware and have the capacity to manage their own system.



  • Hosted PBX: Low start-up costs, as there’s no need to purchase or install any additional hardware.
  • SIP Trunking: If you already have an on-premise PBX, then the initial costs are relatively low, as you’re only paying for the SIP trunk solution to convert your existing hardware.


Short-term Benefits

  • Hosted PBX: Simple implementation means your business isn’t disrupted due to long installation processes and your team don’t need to spend a long time getting used to your new system.
  • SIP Trunking: With low initial cost, cheaper calls and existing infrastructure and personnel in place, SIP trunking is a solution where you can see return on your investment quickly.


Long-term Benefits

  • Hosted PBX: Improved productivity and scalability fuels business progression and better experiences for both your team and your customers.
  • SIP Trunk: Access to a more feature-rich communication solution whilst retaining complete control over it’s management, features, security and monitoring.


Maintenance & Management

  • Hosted PBX: No need to pay for a maintenance package or employ a dedicated team to maintain and manage your solution, as this is included within the monthly cost of your solution.
  • SIP Trunk: With an in-house team, you’re always first in line for support if something goes wrong.


Scalability & Flexibility

  • Hosted PBX: Compared with traditional PBX, hosted PBX is more scalable, however changes to accommodate more users can take longer to implement compared with SIP trunk solutions.
  • SIP Trunk: The ability to scale/adapt your solution is quicker compared with Hosted PBX, however you may run into issues with limited compatibility with certain applications and operating systems, which could limit the amount of communication options and features available to you.


Call Quality

  • Hosted PBX: Great for smaller businesses, as hosted PBX can handle a smaller number of high quality calls.
  • SIP Trunk: Capable of transferring large amounts of data, so can handle big volumes of high-quality calls.



  • Hosted PBX: Level of security is dependent on provider’s practices and procedures. Ensure that you ask about their security measures, certifications and standards as part of your enquiry processes.
  • SIP Trunk: Your business has total control over the security of your solution, so your solution is as secure as you make it! Compared with hosted PBX, you have far more control over your solution.


What are the Pros and Cons of Hosted PBX?

When it comes to Hosted PBX, one of the biggest pros is the convenience. From installation to maintenance, this solution is straightforward as the technical aspects are managed by your provider. This makes it ideal for smaller businesses who either don’t have the capacity to maintain the solution or simply don’t want the hassle.

Although hosted PBX is more scalable and flexible than traditional PBX, you may have to wait for changes to come into effect, depending on the backlog of requests your provider is already experiencing. You’re not in control of your solution, which means if you experience an issue or a security problem, you will have to rely on your provider to resolve them. How much you can customise your solution will also be dependent on what your provider offers, which could restrict businesses who need a specific combination of features.


What are the Pros and Cons of SIP Trunks?

Unlike Hosted PBX, you’re not relying on the implementation of a new solution – you’re simply upgrading your existing PBX to make it VoIP compatible. You are likely to already have an IT or support team in place or are outsourcing this support to manage solution, so this shouldn’t be a new cost you have to factor in. This is a great solution for bigger businesses, as your system can handle large amounts of data and you can remain in control of your solution, which is perfect for businesses who need a more specialised communication solution. Security, maintenance and support is on tap, as you’re relying on your own team, rather than having to wait for your provider to work through their list of clients before having time to review and solve an issue that you have.

Although having more control over your solution may enable access to a more specific solution, compared with being tied to the restrictions of a third-party provider, there is a chance that your infrastructure won’t be compatible with certain applications, features or options. Depending on what you hope to achieve with your new communication solution, this could be a drawback that stops you from getting the most out of your new phone system. If you don’t already have in-house or outsourced support, this may be a considerable cost that you will need to factor in.


How to Choose Between Hosted PBX and SIP Trunking

Of course, we would always recommend a free consultation with our knowledgeable specialists to fully analyse your needs before suggesting a solution. However, based on basic principles of each solution and what environment they support best – this is our verdict on how to choose between Hosted PBX and SIP Trunking.

If you are part of a large business with more than 50 employees, who require a phone system that can handle large volumes of calls and needs more flexibility and control over their system then SIP trunking is the way to go.

Hosted PBX is a great solution for businesses you are looking to move to VoIP whilst avoiding the hassle of managing the solution themselves. It’s also a great solution for businesses who either don’t have capacity or don’t want to hire an in-house IT team to manage their VoIP solution.

Related: The Evolution of Business Phone Systems


Find the Right Business Phone System with Elite Group

With over 20+ years of experience within the communications industry, you know you are in safe hands when you work with us to find the best business phone system. Our consultative approach means that we take the time to really get to know your business, its needs and your goals to find a solution that’s perfect for you.

Call us today on 0344 875 8880 or fill out our contact form here and one of our specialists will be in touch soon.