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Written by
Katy Ratican
13 Jul 2022
6 minutes

Cloud-based telephones: How they work and key benefits

In this article, we share the key information you need to know about cloud-based phones, including what they are and the key benefits of moving to a cloud-based phone system.
Cloud based telephones

You’ve probably heard about ‘the cloud’, and perhaps you have even stored data there. Yet, cloud-based telephones might be new to you. Cloud-based telephones are also called VoIP or internet phones.

What is a cloud-based telephone and how does one work?

Traditional landline phones carry sound waves through electrical energy that travels through wires or optical fibres. In the case of cell phones, electrical signals are taken from cell tower to tower in the form of radio waves. Cloud-based phones, on the other hand, rely on the internet to transfer your digital audio information.

Since you could be calling from a cloud-based phone to a landline or a smartphone, the cloud-based system must convert the information into a form the recipient can use.

What are the benefits of a cloud-based telephone system?

When considering a cloud-based system, you should weigh up the pros and the cons.

If you are self-employed or run a small business, specific benefits of cloud PBX might be more important than others.


Most cloud-based phone systems cost less than landline phones or mobile phone services. Traditional phone companies need to build and maintain infrastructure to offer their services. In contrast, cloud-based phones use the internet connection that you already have.


Many mobile phone companies charge extra for international calling and texting. VoIP phones make international calls more affordable. If you have a contact abroad that you talk to regularly, the savings can add up fast.

Flexibility and reliability

If mobile service goes down in your area, you will be without service until the company fixes the issue. However, internet service providers can connect to individual homes through cable or fibre-optic wires. These cables can be buried underground, making them less susceptible to certain natural disasters.

Some people like the idea of having a backup plan. Even if you have a regular phone in your home, the idea of having a cloud-based phone to fall back on can give you a sense of security.

Easy installation

Installing a traditional phone might look like this: you contact the phone company, fill out some paperwork and make an appointment. Days later, technicians arrive on the arranged day to install your phone.

While installing an internet phone might look like this: On a website, you fill out a form and make a payment. On the same day, you download an app or software programme. You can now use your phone.

Businesses tend to value this ease. Rather than wait for new phones to be installed in the office, they can immediately equip new employees with phone numbers without worrying about physical space and wait time.

Ecologically sound

Mobile phone users regularly upgrade their phones, discarding the old ones. Even landlines go through trends that make older models unpopular. With internet phones, you can download updates within minutes if there is a significant change.

If you’re environmentally conscious, you might want to avoid buying products that end up in landfill. If you get tired of your cloud-based phone, you can cancel your subscription or uninstall the software.

Cloud-based telephone vs. VoIP: How do they differ?

Many use these terms interchangeably because there is little difference between VoIP and cloud-based telephones.

VoIP (Voice over Internet Protocol) technology uses broadband internet connections to make and receive phone calls. Several companies offer this service and business owners can select from a range of features that best suit their needs and objectives.

For instance, some companies make you buy a particular VoIP phone or an adaptor for your regular landline. Others work with a computer, laptop, tablet or smartphone app.

VoIP technology changes your voice into a digital signal sent over the internet to the receiving phone. At the other end, the signal is converted to a telephone signal that can be read by the other phone.

Some VoIP services are free, but many require you to pay a monthly fee to keep a personal phone number or call people who do not have the service.

Cloud-based phones work similarly. The cloud-based phone is a newer term, which can mean the companies using it have unique features that older companies might not offer. One significant potential advantage that the cloud offers to the already existing VoIP industry is that anyone with permission can access anything stored in the cloud at any time or any place.

Would you like to learn more about setting up a VoIP or cloud-based phone? Check out our guide to getting started with hosted PBX.

Five things to consider before choosing a cloud-based telephone system:

1. Don't be a victim of advertising

You might get excited at all the bells and whistles a cloud-based system offers. Yet many features might be unnecessary for you or your business.

2. What do the reviews say?

Customer reviews can prove invaluable while comparing companies. Read both positive and negative reviews to learn what you stand to lose or gain.

3. How is the customer service?

Some systems are great when they work. But if you have a question or a problem, you have difficulty finding anyone to help you. Before you buy, why not test the waters? Ask service providers questions to see how responsive their customer service team is.

4. Understand the pricing model

Businesses need to understand the pricing before buying a service. When comparing which service to use for your business, get a better understanding by comparing PBX and VoIP.

5. Keep yourself safe

Anytime you install software on your computer, you should ensure it is secure. Review the security features included with your VoIP system.

Are there alternatives to cloud-based telephone systems?

Absolutely. Apps such as Chalkboard give you a second phone number for business. It's great for those who want to keep their personal number private while remaining available for business contacts.

Download Chalkboard to get a better idea of how it works. You can choose a local mobile number from the US or the UK. Unlike some VoIP companies that lock you into a contract, with Chalkboard you can cancel anytime without worrying about hidden costs.

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