If you’re replacing ISDN or analogue lines, you’ll usually be offered two routes. SIP trunking swaps your physical lines for virtual ones and keeps your existing phone system. A hosted phone system moves the phone system itself into your provider’s cloud.
Both work, and the right choice depends on what you already own and how you want to run your phones. The decision is time-sensitive, since the UK’s legacy phone network is due to be retired on 31 January 2027, and Openreach has said it will not be delayed again.
This guide helps you choose between them without needing a technical background.
The Difference in Plain English
SIP trunking replaces the lines. You keep your PBX, the on-site box that manages extensions and call routing, and connect it to a provider over the internet. Your handsets and day-to-day setup stay the same.
A hosted phone system replaces the PBX as well. The system runs in the provider’s data centres, and you manage extensions, call routing and voicemail through a web portal. Handsets connect over the internet, and staff can use mobile or desktop apps.
Put simply, SIP trunking changes how calls reach your office, while hosted telephony changes the phone system itself.
When SIP Trunking Is the Better Fit
SIP trunking tends to suit businesses that:
- Have a relatively recent IP PBX that still works well
- Rely on integrations that are built around their current system, such as call recording or specialist software
- Want to meet the deadline with minimal change for staff
- Have a trained in-house IT team or support contract for the PBX
A 40-person manufacturer with a three-year-old PBX and a working call recording setup is a typical example. Replacing the lines is quick, and nothing else needs to change.
The trade-off is that you still own and maintain the equipment. Hardware ages, software needs updating, and you remain responsible for resilience on site.
When a Hosted Phone System Is the Better Fit
A hosted phone system tends to suit businesses that:
- Have an ageing PBX that’s expensive or hard to maintain
- Want staff to work easily from home, client sites or multiple offices
- Prefer predictable monthly costs to buying and upgrading hardware
- Expect to grow, move or restructure
A 12-person accountancy firm with an old ISDN system and hybrid working is a typical example. Calls can ring the office first, then roll to mobile apps, with no cupboard of equipment to look after.
The trade-off is dependence on your internet connection and your provider’s platform. Both need to be solid, and you have less control over low-level configuration.
Comparing the Practical Differences
Cost
SIP trunking usually costs less to start if you already own a PBX, since you’re paying for channels, numbers and calls. A hosted system typically charges per user each month, which spreads the cost but continues for as long as you use it.
Neither is automatically cheaper. Total cost depends on your call patterns, handset needs, contract length and how much you spend maintaining on-site equipment. Ask for a quote based on your real usage, including mobile, international and 03/08 calls.
Control and Customisation
With an on-site PBX you can often configure unusual routing, integrations and security settings in great depth. Hosted platforms offer a broad feature set through the portal, though very specialised needs may be harder to fit.
Flexibility
Hosted systems make it easier to add or remove users, open new sites and support remote working. SIP trunking can support multiple sites too, but usually involves more design work and sometimes extra equipment.
Resilience
Both depend on your internet connection, so both need a backup plan. With SIP trunking, you also need to protect the on-site PBX with power backup and maintenance. With hosted telephony, you rely on the provider’s platform and your connection, so ask about data centre redundancy and automatic diversion to mobile numbers.
Security
SIP trunks are exposed to fraud if poorly configured, so ask about spending limits, alerts and protection of the connection. Hosted providers manage platform security for you, but you should still ask where data is stored, how recordings are protected and how GDPR is handled.
Day-to-Day Management
A hosted system is usually simpler to run: changes are made online in minutes. An on-site PBX often needs a supplier or in-house expert for changes.
Don’t Forget What Else Uses Your Phone Lines
Whichever route you choose, audit everything that depends on your current lines. Alarms, lift emergency lines, CCTV links, door entry systems and card payment terminals often use them. Each needs a digital replacement, and this is one of the most common causes of last-minute problems.
A Middle Path: Start with SIP, Move to Hosted Later
You don’t have to decide for ever. Many firms replace their lines with SIP trunks now, to meet the deadline, then move to a hosted system when the PBX reaches the end of its life. If you think this might be you, ask your provider whether they offer both, and whether numbers and contracts can transfer smoothly.
Questions to Ask Either Type of Provider
- How will you check my connection and network before I sign?
- What’s the realistic number porting timeline, and do old lines stay live until the switch is confirmed?
- How does failover work, and who is responsible for it?
- What UK-based support is included, and during what hours?
- What are the minimum term, notice period and costs for changing user or channel numbers?
- How are 999 calls handled, and how is my address information kept accurate?
Specialists such as Wavetel Business work with UK organisations on both options, and any provider you consider should be willing to put plans and pricing in writing.
A Simple Way to Decide
- Is your PBX less than five or six years old and working well? SIP trunking is worth serious consideration.
- Is your system aging or costly to maintain? A hosted system is likely better.
- Do you have staff working across home, office and client sites? Hosted fits more naturally.
- Do you rely on specialist integrations? Check compatibility with both options before deciding.
- Do you have the in-house skills or a support contract? If not, hosting removes much of the burden.
Frequently Asked Questions
Is SIP trunking cheaper than a hosted phone system?
Not necessarily. SIP trunking often costs less up front if you already own a PBX, but you carry maintenance costs. Compare total cost over the contract term.
Can I keep my existing phone numbers with either option?
In most cases, yes, through number porting. Timescales vary, so start early.
Do I need to replace my PBX for SIP trunking?
Not always. Many IP PBXs support SIP directly, and older ones can often use a gateway. Ask your supplier to confirm.
Which is more reliable?
Both can be very reliable if set up well. Each depends on your internet connection, so plan for a failover whichever you choose.
Can I switch from SIP trunking to hosted later?
Often, yes. Ask your provider whether they support both and how numbers and contracts transfer.
Conclusion
SIP trunking and hosted telephony solve the same deadline problem in different ways. SIP trunking suits firms that want to keep a working PBX, while a hosted system suits those wanting flexibility and no on-site equipment.
The practical takeaway is to look at the age and condition of your PBX, how your team works and how much you want to manage yourself. Audit your lines and devices, ask providers detailed questions and plan the move well before January 2027, so you can choose carefully rather than in a rush.
