If you've researched business phone systems, you'll have met two similar-sounding terms: SIP trunking and hosted VoIP. Both use the internet to carry calls, both are replacing old phone lines - but they're different things. Here's the distinction in plain English.
The key difference
It comes down to where your phone system lives:
- Hosted VoIP - the entire phone system (the PBX) lives in your provider's cloud. You just use phones and an app. There's no system hardware on-site.
- SIP trunking - you keep an on-site PBX, but replace its old physical phone lines (ISDN) with a "SIP trunk" - essentially phone lines delivered over the internet instead of copper.
In short: hosted VoIP replaces the whole system; SIP trunking modernises the lines feeding an existing system.
When SIP trunking makes sense
SIP trunking is often the right choice if you:
- Already own a modern, capable on-premise PBX you're not ready to replace.
- Have invested recently in phone hardware and want to protect that investment.
- Need to move off ISDN before the switch-off without changing your whole system.
It lets you cut line-rental costs and gain flexibility while keeping the PBX you have.
When hosted VoIP makes sense
Hosted VoIP is usually the better fit if you:
- Have no PBX, or one that's ageing and due for replacement.
- Want minimal on-site hardware and maintenance.
- Need full work-from-anywhere flexibility and the latest features without managing them yourself.
- Prefer a predictable per-user cost with no big upfront spend - see the TCO comparison.
For most small and medium businesses starting fresh, hosted VoIP is the simpler, more future-proof choice.
A quick comparison
| SIP trunking | Hosted VoIP | |
|---|---|---|
| PBX location | On-site (yours) | In the cloud (provider's) |
| On-site hardware | Yes | Minimal |
| Maintenance | Your PBX, your responsibility | Provider's |
| Best for | Keeping a good existing PBX | Replacing/starting fresh |
The bottom line
Neither is universally "better" - it depends on whether you have a PBX worth keeping. SIP trunking modernises an existing system; hosted VoIP replaces it with a cloud one. The right answer comes from looking at what you already have and where you're heading. Not sure which fits? Request a callback and we'll advise honestly, or explore our Cloud Telephony service.
Frequently asked questions
What is the difference between SIP trunking and hosted VoIP?
SIP trunking connects an existing phone system to the internet for calls, while hosted VoIP provides the entire phone system from the cloud with no on-site PBX needed.
Which is right for my business?
Businesses with a capable, modern on-site PBX may prefer SIP trunking, while those wanting a fully managed, hardware-free system usually choose hosted VoIP.
Is SIP trunking cheaper than hosted VoIP?
It can be if you already own a suitable PBX, but hosted VoIP avoids hardware maintenance and upgrade costs, so the best value depends on your situation.
