SIP Trunking vs Hosted VoIP: Which Business Phone System Approach Is Right?

When a UK business starts shopping for a new business phone system in 2026, the salesperson will lead with one of two shapes: "hosted VoIP" (cloud phone system, hosted PBX, cloud telephony — same product, different marketing) or "SIP trunking" (keeping a physical PBX and swapping the underlying trunks for IP). This guide explains the difference, the honest pros and cons, and which is right for your business.

What SIP trunking is (and what it is not)

A SIP trunk is a virtual phone line delivered over the internet. It replaces the physical ISDN30 or ISDN2e that used to feed your PBX with an IP connection — usually cheaper, more resilient, and easier to scale. Your PBX (Avaya, Panasonic, NEC, Mitel, Ericsson-LG, Alcatel-Lucent, Unify, Siemens, Aastra, Samsung, Toshiba, LG-Ericsson, whatever brand) does not change. Your deskphones do not change. Your dial plan does not change. Only the underlying trunk changes from copper to IP.

SIP trunking is a bridge, not a destination. It lets a business phone system built for the copper era carry on running over the internet, which is genuinely useful — but you still have a physical PBX to maintain, upgrade and eventually replace.

What hosted VoIP is (and why it is now the default)

Hosted VoIP — also called cloud phone system, hosted PBX, IP telephony, cloud telephony, VoIP phone system — is where the PBX itself lives in a UK data centre run by your provider. Nothing physical sits in your building except deskphones, softphone apps and the router. Adds, moves and changes happen in a web browser. Users, extensions, IVRs, hunt groups and voicemail boxes are configured in minutes, not days. Softphones on iOS, Android, Windows, macOS and browsers extend the same phone system to every device.

Hosted VoIP is the default recommendation for 95% of UK businesses in 2026 — including any business that does not already own a PBX, or whose PBX is more than 5 years old.

The honest comparison

• Upfront cost: Hosted VoIP has zero upfront; SIP trunking assumes you already own a PBX (or are prepared to buy one — from £3,000 to £30,000 depending on size).
• Monthly cost: Hosted VoIP runs £10–£20 per user per month all-in; SIP trunking is £5–£10 per channel per month plus your PBX maintenance and licensing.
• Feature parity: Hosted VoIP includes softphones, mobile apps, browser-based calling, Microsoft Teams calling, transcription, AI call summaries as standard. SIP + PBX depends entirely on how modern your PBX is.
• Adds, moves and changes: Hosted VoIP — self-service in a browser, minutes. SIP + PBX — usually a paid engineer visit, hours to days.
• Resilience: Hosted VoIP is inherently multi-site (calls follow users to any device, any location). SIP + PBX depends on your building being up.
• PSTN switch-off: Both are IP-native and switch-off ready. But SIP trunking assumes a PBX that itself is switch-off ready — some older PBXs are not.
• CRM integration: Hosted VoIP integrates click-to-dial and screen-pop with Salesforce, HubSpot, Dynamics, Zoho, Pipedrive, Bullhorn, Zendesk, Freshdesk and others by API. Legacy PBX CRM integration is patchy at best.
• Call intelligence: AI transcription, sentiment, coaching (Atom Insight) run natively on hosted VoIP. On a legacy PBX with SIP trunking, you're usually looking at an expensive third-party overlay.

When SIP trunking is genuinely the right answer

• You have a PBX less than 3 years old that you paid a lot for and can't justify writing off.
• You have a very large deployment (500+ users) with heavy customisation that is hard to migrate quickly.
• You have specific compliance or air-gapped-network requirements that mandate an on-premise call platform.
• You want a short-term bridge (2–3 years) before a full cloud phone system migration.

When hosted VoIP (cloud phone system) is the right answer — almost always

• You are starting fresh or your current PBX is 5+ years old.
• You have hybrid or remote workers who need the same phone number on every device.
• You want to integrate with Microsoft Teams natively.
• You want CRM integration, call recording, transcription and analytics without an extra platform.
• You want to scale up or down without hardware.
• You want one bill, one team, one accountable engineer for the whole phone system.

What we recommend for UK businesses in 2026

For any UK business under 200 users starting fresh — hosted VoIP, no question. For businesses with a recent PBX investment — SIP trunking as a 2–3 year bridge, then hosted VoIP. For businesses whose PBX is more than 5 years old — skip SIP trunking, go straight to hosted VoIP. For very large businesses with specific compliance needs — SIP trunking to an on-premise IP PBX, or a hybrid cloud/on-premise design.

The question that matters is not "which technology" — it is "which provider is going to be accountable, take my numbers when I leave, and pick up the phone when it breaks." That is a people question, not a platform question.