A hosted PBX (private branch exchange) phone system is delivered as a hosted service, typically by one of the major telephone companies. Also called a virtual PBX, a hosted PBX can free companies from having to invest in the costly equipment of a complex business phone system, while still enabling the company to utilize telephony features like voicemail, faxing, automated greetings, touchtone menus, conference calling, call auditing and calling logs and more. A hosted PBX is the modern alternative to costly, clunky PBX equipment that is tied to one location.
Hosted PBX companies handle call routing, or switching, at their own location and are responsible for managing all of the PBX equipment and software involved in the virtual PBX service. Hosted PBX services can function over the Public Switched Telephone Network (PSTN) over the Internet (hosted IP PBX via Internet telephony), or over a combination of the two.