How Do Cloud-Based Phone Systems Work?

Exploring the Technology Behind Cloud-Based Phone Systems

There have never been so many methods to keep teams and customers connected, with businesses everywhere utilising multiple communication applications. 

However, with the increasing need for people to be able to communicate from anywhere, the old ISDN/PSTN analogue phone lines can no longer handle the data and needs of a mobile workforce, nor those of a workforce expected to maintain consistency during the data-heavy digital age.

Cloud-based phone systems have proposed a solution – allowing businesses to take advantage of multiple channels of communication more efficiently, by unifying voice, text, video calls, file transfers, and more within one solution.

But how does a cloud-based phone system bridge this gap and provide the platform for a more modern communication network? Here’s what you need to know if you’re considering moving your business phone system to the cloud.

What Are Cloud-Based Phone Systems?

A cloud-based phone system takes the existing analogue phone network (that is built on fixed cables running into a building) and moves the entire system onto the internet. It converts the voice signal received by phone calls on your desk phone – or other devices – into a digital signal, allowing that call to be managed and transferred in a number of ways.

Cloud phone systems handle these processes at specialised data centres offsite – meaning your office isn’t lumbered with an overly large onsite system that needs constant supervision and maintenance. Elite Group helps businesses identify which cloud-based phone systems they could take advantage of and provide options based on their specific needs and budget. 

Read on to find out everything you need to know.

How Do Cloud-Based Phone Systems Work?

A lot goes into transferring and converting the signals sent by phone to a digital signal suitable for cloud calling. The technology may seem complicated, but it will become a lot more straightforward as we break it down:

Step 1 – A call is made to/from an IP phone

A call is made or received by an IP phone that can connect to the internet, these are also known as ‘cloud phones’. The voice of the speaker is then received by the cloud phone’s receiver. This is where the conversion process begins.

Step 2 – The voice is transmitted to your office router

Whether your IP phone is connected to the internet via an ethernet cable or WiFi, the received voice is then transferred to a local router. The router collects the voice signals before moving it on once again.

If you’re in a business, this will likely be your main office router. 

Step 3 – The voice travels from the router to the internet

The router then sends the voice signals collected by the cloud phone to your internet connection, which acts as a middleman between your voice and the cloud service provider of your choice.

Step 4 – The Voice is transferred from the internet connection to the cloud phone system

The voice signal is transferred from the internet to the cloud phone system – the system which allows your call management processes to become much more flexible and streamlined. 

The digital signal is then sent back to the business by the cloud service provider, travelling along a traditional phone system – also known as the PSTN network. This allows the call to connect externally, as well as internally.

It sounds like a massive undertaking, but all of the above happens in less than the blink of an eye.

VoIP and SIP

The above is a very simplified version of this process. On the technical side of things, one point that should be explained is the inclusion of VoIP.

VoIP stands for ‘Voice over Internet Protocol’ and is the technical term for the process that converts your voice into a digital signal. Analogue voice signals are received by an internet-powered device and, using VoIP, are broken down and replaced with a digital signal that matches the sound and tone of the voice in question identically. 

If we want to get even more technical, VoIP systems use a technology called SIP – ‘Session Initiation Protocol’ – to create a virtual phone system that sits atop your existing broadband connection. As these virtual phone lines travel along your broadband, multiple digital lines can exist at once, as opposed to a traditional phone line, which can only handle one line. This is what allows businesses using cloud phone services to have large numbers of phone lines active at once.

What Are The Advantages of A Cloud-Based Phone System?

Avoid the PSTN Switch-off

UK phone communications have been sent across copper wiring for decades – this is known as the PSTN network. However, given the data-intensive nature of communications and other internet-related activities in the modern day, it has become clear these lines are not able to withstand the considerable uptake in data movement we’ve seen in the past few years. 

Therefore, Openreach has made the decision to switch off the old copper wiring in 2025, with people and businesses needing to switch to digital-based phone communications if they wish to remain connected.

Naturally, this means businesses whose phone systems are still reliant on the PSTN network will be rendered useless when the switch-off occurs, potentially costing businesses a fortune in lost communications and lost customers, unless they make the change quickly. 

Cloud-based phone systems are the ideal alternative solution. As these systems are not reliant on the old wiring and being powered through an internet connection, they will not be impacted when the switch-off goes into effect. This allows businesses everywhere to remain connected with their customers during what will be one of the most tumultuous times in British telecommunications history.

Versatile Communications

While phone communications are the obvious advantage of a cloud-based phone system (it’s in the title, after all) this is barely scratching the surface of what the technology is capable of providing. 

As we’ve already discussed, modern businesses move countless bytes of data every single day in various forms, to transfer information and remain in constant communication with customers and colleagues alike. 

In today’s data-centric world, this isn’t by choice, it’s a demand businesses need to keep up with if they want to stay ahead of the competition. Unfortunately, traditional phone lines simply aren’t capable of offering the level of in-depth communications needed for modern businesses to thrive.

One way cloud phone systems can help to improve business communication efforts is through the onboarding of Unified Communications solutions. Rather than a business paying multiple subscription fees for various communication methods every month, with Unified Communications a business needs only pay a single subscription fee for a platform that houses all elements of communication its employees need to remain productive and connected – including voice, text, messaging, email, audio, video conferencing, and file transfers. Think of it as the Swiss army knife of communications; all the tools you need conveniently in one place. 

Better still, because it is a cloud-based solution, Unified Communications can easily be installed within businesses that are already on board with a cloud-based phone system, and accessed virtually anywhere by remote workers, as long as they have a steady internet connection.

Reduced Maintenance and Repair Costs

As traditional phone systems are hard-wired into a building, with new wires needing to be installed with each new user, they can be expensive to run and even more expensive to repair when a fault is spotted. Engineer costs, and the productivity costs incurred in waiting for an engineer, can cause businesses problems they’d rather avoid. 

Thankfully, cloud-based phone systems are often easy to diagnose and repair when an issue arises. As there is no need for extensive physical wiring, with the solution being hosted in the cloud, technical problems often fall to the cloud provider to fix, and can be done remotely. This could save businesses a fortune in the long run and prevent the need to replace expensive hardware when it finally reaches the end of its lifespan.

Clearer Calling

Traditional telephony can fall victim to quality issues, with unclear, muffled voices having causing a negative impact on your business’s ability to communicate effectively. This is a result of the limitations presented by the old analogue phone system, which can only carry a limited amount of voice data at a time. 

For businesses, this can present several problems, including being unable to properly hear customer calls and mishearing important information.

However, thanks to cloud-based phone systems and VoIP, users can benefit from HD calling, which offers a crystal clear representation of the caller’s voice. It may sound like a simple aesthetic change, but on the whole, clearer calling can result in less time wasted and fewer mistakes, improving day-to-day business processes.

Switch to a Cloud-Based Phone System with Elite Group Today

When PSTN phone systems are switched off in 2025, analogue phone lines in the UK will be rendered obsolete. If your business is still operating on a traditional phone system, you need to put plans in place for a move to something more suitable – like a cloud phone system.

Cloud phone systems are also quick and easy to set up, in comparison to traditional phone lines. Aside from this, cloud phone services simply offer much more in the way of advanced features, flexibility, and variety than analogue phones. Features like unlimited calling, international calls, auto attendant, call recording and sharing, call forwarding, video meetings, business SMS messaging, seamless flexible working, and more, barely scratch the surface of what the best cloud phone systems can offer your business.

To find out more about cloud phone systems and how your business can make the move to cloud-based communications, speak to Elite Group today. 

With decades of combined experience in the business technology space, we are your ideal partners to make the move to cloud communications. Our experts offer bespoke advice catered specifically to your business needs and offer solutions you can use to maximise your productivity and business prospects using this new technology.

Plus, if you ever encounter a fault, our helpful experts are only a phone call or email away, offering you support when you need it most to minimise downtime, ensuring your business remains on track to grow even further.