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Most businesses do not think about the lines underneath their phone system until something forces the issue. For many businesses across the South, that something is the PSTN switch-off: a confirmed January 2027 deadline that is already making itself felt, with Ofcom recording a 45% increase in PSTN faults in 2024.
SIP trunking and hosted VoIP are both answers to that problem. One replaces the lines underneath your existing phone system; the other replaces the system entirely. Understanding what SIP trunking is and how it works helps distinguish a straightforward upgrade from unnecessary cost and disruption.
This guide covers the difference, what the switch-off means in practice, and how to work out which direction suits your business.
Both technologies replace traditional phone lines with internet-based calling. The difference lies in what they replace and what they leave in place.
SIP stands for Session Initiation Protocol, the standard that governs how calls are established and routed over an internet connection. SIP trunking connects your existing on-site PBX to the public telephone network over the internet, replacing the physical ISDN lines. Your handsets, extensions and call routing all stay in place.
Ofcom’s jargon buster defines it as connecting a PBX to a service provider over an Ethernet connection to use VoIP in place of traditional telephony [1].
VoIP phone systems take a different approach entirely. Rather than connecting an existing phone system to the internet, VoIP replaces the system with a cloud-hosted platform. Calls are made and received through softphone apps, desk handsets or mobile devices, all managed remotely, with no on-site hardware to maintain.
Yes, and for most businesses, the decision has already been made for them.
BT is retiring the public switched telephone network by January 2027. The Department for Science, Innovation and Technology (DSIT) confirms that over two-thirds of UK landlines have already migrated to digital, and that businesses relying on the PSTN for non-voice devices need to act now. That covers alarms, payment terminals and lift systems, not just phone lines [2].
Lift systems are a good example. They typically rely on a PSTN line for their emergency call function, a dependency that catches many building managers by surprise.
The deterioration is already under way. Ofcom reported a 45% increase in PSTN-related faults in 2024, with over 2,600 major incidents in 2024/25. In January 2026, twelve months from switch-off, Ofcom was still writing to telecoms providers to remind them of their obligations [3].
For businesses with a working PBX, SIP trunking is the most direct replacement: internet-based channels in, ISDN lines out, everything else unchanged. For businesses without existing infrastructure, or those who want a clean break, hosted phone systems remove the on-site hardware entirely.
There is no universal answer. The right comparison depends on what you already have.
SIP trunking suits businesses with a PBX that is still performing well. It is priced per channel rather than per user, so costs cover:
Hosted VoIP runs on a per-user subscription with no on-site hardware to procure or maintain. Monthly spend is predictable and scales up or down as headcount changes. For smaller businesses, or those moving to hybrid working, that flexibility often outweighs the higher per-seat cost.
Three questions settle most decisions:
The right answer depends on how your business actually operates, not on what the technology is called.
The businesses that struggle most with the PSTN switch-off are not the ones that leave it too late. They are the ones that move too quickly, replacing a PBX that had years of life left or patching lines that should have been retired. SIP trunking and hosted VoIP solve the same problem differently, and the difference is worth understanding before a deadline forces the decision.
Town & Country Communications has been helping businesses across Dorset, Hampshire and Wiltshire choose and install the right phone systems since 1992. We are independent, so our team will tell you whether what you have is worth keeping rather than push a product for its margin. The advice you get is based on your setup, not a sales script.
Call 01202 514444 or arrange a free consultation to get a straight answer on which direction makes sense for your phone system.
[1] GOV.UK, Office of Communications (Ofcom), Jargon Buster (2024): https://www.ofcom.org.uk/phones-and-broadband/coverage-and-speeds/jargon-buster
[2] GOV.UK, Department for Science, Innovation and Technology (DSIT), Moving Landlines to Digital Technologies (2026): https://www.gov.uk/guidance/moving-landlines-to-digital-technologies
[3] GOV.UK, Office of Communications (Ofcom), Cristina Luna-Esteban, PSTN Switch Off and Migration to Voice over IP (VoIP) (2026): https://www.ofcom.org.uk/siteassets/resources/documents/consumers/2024/published-letter-to-business-on-pstn-switch-off-deadline.pdf
