How Does a Virtual Phone Call Work? Benefits, Setup, and Top Providers

Virtual phone calls are transforming the way businesses and individuals communicate. Unlike traditional phone lines, these calls use the internet, offering flexibility, advanced features, and cost savings. Understanding how a virtual phone call works can help you pick the right system, streamline your setup, and ensure you get reliable, professional-quality communication every time. In this guide VoIP phone number, we’ll break down the process, compare it to traditional systems, and highlight top providers to consider.

To reach that goal, Voice AI’s AI voice agents handle routine calls, route customers, and surface call data so your team can focus on higher-value tasks while setup and daily operations stay simple.

Summary

• Virtual phone numbers let businesses route a single line across apps and devices, protect employee privacy, and reflect the market shift that saw over 60% of businesses switch to VoIP.  
• Switching to virtual calling can substantially cut telecom spend, with some analyses reporting that VoIP can reduce communication costs by up to 75%.  
• Reliability gains translate into operational improvements, with a 2025 report finding 94% of businesses that switch to VoIP see increased productivity.  
• Set concrete performance targets before launch, for example, aiming for sub-150 ms one-way latency, MOS above 4.0, and provisioning at least 100 kbps per concurrent Opus call.  
• Vendor evaluation should be evidence-driven, using a 14 to 30-day sandbox, stress tests, and porting dry runs, especially since over 50% of businesses have adopted virtual phone systems and vendor choice is now operational risk.  
• Virtual systems increase productivity by about 20% compared to traditional PBX systems. They can yield significant bill reductions, sometimes cited as up to 50%, while on-prem PBX may still be preferable where absolute hardware control is required.  
• Voice AI’s AI voice agents address this by handling routine calls, routing customers, and surfacing call data so teams can focus on higher-value tasks. At the same time, setup and daily operations stay simple.

What Is a Virtual Phone Call?

A virtual phone call is any call placed using a virtual phone number that lives in software rather than on a physical wire, and it travels over the internet instead of traditional copper phone lines. That number can be routed across multiple devices and IP addresses, so you can make and receive business calls from a desktop app, iOS, Android, or any internet-connected device while keeping personal numbers private and lowering long-distance costs.

How Exactly Does a Virtual Call Connect and Move Between Devices?

A virtual telephone number is essentially an online number that routes like a programmable forwarding address. The number is not tied to a single landline or handset; when someone dials it, routing rules in the cloud decide whether the call goes to a softphone on:

• Laptop
• Mobile app
• VoIP desk phone
• External landline

Global Line Flexibility

Behind the scenes, this uses Voice over Internet Protocol and a cloud PBX, turning voice into packets that traverse IP networks and are reassembled at the far end. That flexibility is what lets a single business line ring in São Paulo, a home office in Boston, and a shared support queue in Manila without changing anything visible to the caller.

Why Do Businesses Choose Virtual Calls?

This pattern shows up consistently across contact centers, remote sales teams, and distributed support groups:

• Virtual calls reduce long-distance costs
• Protect employee privacy
• Keep teams connected from anywhere

60% Shift for Practicality

Adoption has accelerated quickly because of that practicality. More than 60% of businesses have already shifted to VoIP for their communication needs, which helps explain why traditional PBX systems are becoming the exception rather than the norm. It’s exhausting for representatives to juggle personal and work phones. 

Still, virtual numbers eliminate that friction by allowing employees to answer business calls on the device they already use—without exposing their personal number.

What Practical Advantages Show Up on Day One?

You can work from wherever you are, and the system still behaves like an office phone. Virtual lines forward calls according to rules you set, so calls go to the right person or queue, even if they are on a train. You travel less because affordable international calling and video conferencing replace many face-to-face trips, and remote collaboration becomes smoother because every agent shares the same:

• Routing
• Voicemail
• Message history

Up to 75% Savings

Costs drop meaningfully, and that’s often the tipping point. VoIP can reduce communication expenses by up to 75%, a margin significant enough to reshape how teams budget for:

• Support operations
• Sales outreach
• Global expansion

Hidden Costs and Missed Leads at Scale

Most teams handle this with familiar desk phones and a local PBX because it feels reliable and requires no new habits. That works at a small scale, but as call volumes, locations, and compliance demands grow, the old model creates missed leads, inconsistent caller experiences, and hidden telecom bills. 

Low-Latency Automation and Compliance

Platforms like Voice AI provide the bridge, offering rapid deployment and studio-quality conversational systems that pair low-latency voice agents with text-to-speech, with enterprise-grade scalability and compliance. Teams find that automating routine inbound and outbound calls with believable, localized voice agents:

• Cuts manual workload
• Reduces missed opportunities
• Plugs into stacks like Salesforce and Zendesk via APIs and SDKs

This enables businesses to experience consistency as they scale.

How Do Routing Rules and Forwarding Behave in Practice?

Think of routing rules as a simple script you write once and trust forever:

• Forward to an agent until answered
• Roll to the following line
• Send to voicemail outside business hours
• Translate and route based on region

Those rules let virtual calls integrate with CRM triggers, screen pops, and audit logs, so every call can carry context and compliance metadata without slowing the agent down. That interoperability is what turns flexible calling into reliable operations, not just a shiny feature.

Related Reading

• Callback Service
• Call Center Attrition
• Customer Experience Management
• How VoIP Works Step by Step
• Automatic Phone Calls
• SIP Trunking VoIP
• What Is SIP Calling
• SaaS Call Center
• PABX Telephone System
• Omnichannel vs Multichannel Contact Center
• Hosted PBX System
• Automated Outbound Calling
• Customer Support Automation
• Conversational AI Adoption
• How Much Do Answering Services Charge
• SIP Phone
• Reduce Customer Attrition Rate
• Customer Experience Lifecycle
• What Is a PBX Phone System
• Contact Center Compliance
• Cloud-Based Contact Center
• Hosted VoIP
• Contact Center Workforce Optimization
• IVR Customer Service
• Automated Voice Broadcasting
• UCaaS Features
• VoIP Phone Number
• Contact Center Automation
• Business Communications Management
• UCaaS
• Predictive Dialer vs Auto Dialer
• What Is ISDN
• Customer Communication Management
• What Is a Virtual Phone Number
• IP Telephony System

How Does a Virtual Phone Call Work

Virtual calling depends on two coordinated pipelines: one that signals and manages the session, and the other that transmits compressed audio packets in real time. Hence, the other end hears natural speech with low delay. Reliability and flexibility come from codecs, session controllers, encryption, edge routing, and failover systems working together so a single virtual number can ring apps, desk phones, or external PSTN lines without dropping context.

What Happens First When You Press Call?

Your device samples analog sound, and the client app or desk phone immediately hands that stream to a codec, which compresses audio into small frames optimized for voice. A signaling protocol, usually SIP, exchanges messages to set up:

• Codecs
• Encryption keys
• Routing between endpoints

Once those negotiation messages succeed, the media path is opened, and the audio frames are packetized for transport.

Which Protocols and Pieces Move the Audio Across Networks?

Media travels over RTP or SRTP packets, sent typically over UDP for low latency, while SIP or a similar protocol handles call setup, teardown, holds, and transfers. Session border controllers and NAT traversal tools such as STUN and TURN enable traversal across firewalls and private networks. 

On the far end, jitter buffers re-time arriving packets, packet-loss concealment fills short gaps, and the decoder reconstructs audio for playback.

How Do Systems Keep Calls Sounding Continuous and Reliable?

Networks vary, so systems use several layers of protection: adaptive codecs such as Opus or G.711 trade off quality and bandwidth; jitter buffers smooth arrival-time variance; forward error correction and retransmission strategies mitigate packet loss; and QoS tagging nudges routers to prioritize voice. Monitoring rigs continuously track MOS, packet loss, and round-trip time, while geo-distributed routes provide automatic failover if an edge node or carrier path degrades. 

These controls are why many organizations see real operational gains after migration, with 94% of businesses that switch to VoIP reporting increased productivity. That statistic signals that reliability improvements translate directly into time saved and fewer missed interactions.

Which Parts Live in the Cloud and Which Stay On-Site?

If you choose a hosted PBX, the vendor runs call control, media switching, and updates off-site, so you avoid maintaining servers or applying patches. SIP trunking connects your on-premise PBX to VoIP lines, keeping control with your IT staff but requiring gateway hardware and SIP management. 

Cost and Compliance Tradeoffs

Hosted solutions lower upfront costs and operational burden; companies with existing PBX investments or strict on-site security controls prefer SIP trunks. When evaluating, compare billing models, whether lines are charged per phone or per user, and how each option connects to the PSTN or an ITSP.

Control and Fragmented Operations

Most teams handle PBX in one of two familiar ways, and each has a cost that only shows up later. The familiar approach is to keep on-prem systems for control and continuity, which works early on and feels safe. As call volume and integrations grow, that choice fragments operations: patch schedules, carrier contracts, and gateway maintenance consume engineering cycles and slow feature rollout. 

API Voice Agents for Automation

Platforms like Voice.ai provide a bridge, letting teams drop in studio-quality voice agents via APIs and SDKs to automate repetitive inbound and outbound interactions, while supporting cloud or on-prem deployments, low-latency voice models, and compliance controls that cut manual workload and reduce missed leads.

What Features Plug Voice into Business Workflows?

IVR menus can use natural language understanding to route callers without touching an agent, including secure IVR payments and automated self-service. Call queues support automatic callbacks so callers do not have to wait on hold, and visual voicemail transcribes messages and delivers them via email or SMS. 

Voice, Video, and Compliance

Video conferencing and team collaboration tie screen sharing, chat, and whiteboards to the same identity and routing rules as voice so that an interaction can escalate cleanly from SMS to voice to a scheduled video with shared context. Call recording and searchable transcripts support QA and compliance, with admin controls to pause recordings for private segments and storage policies that align with regulatory requirements. 

Finally, analytics exports KPIs into dashboards or pushes screen pops into CRMs via integrations so that every call can carry contextual metadata to the agent at answer.

How Should You Design for Performance in Practice?

• Set targets and test them before launch:
  • Aim for sub-150 ms one-way latency and maintain MOS above 4.0 for high-quality calls.
  • Provision at least 100 kbps per concurrent Opus call as a baseline.
  • Implement SLA-backed carrier diversity to enable automatic PSTN failover. 
• Run preflight checks at branch sites for jitter and packet loss. 
• Deploy SBCs at edge points to protect signaling, and instrument call flows with real-time alerts for spikes in abandonment rates or codec mismatches.
• Imagine the call path as an orchestra:
  • Signaling is the conductor
  • Codecs are the instruments
  • Jitter buffers are the conductor’s cue to keep everyone in time. 
• When one section plays out of sync, the whole performance sounds bad, so you tune each part before opening night. That system-level picture raises the following question:
  • What practical trade-offs are involved in keeping things traditional versus fully virtualized?
  • Why that choice still trips up fast-growing teams?

Virtual Phone System vs Traditional Phone System

Virtual systems win on speed, flexibility, and lower upfront risk, while traditional PBX can make sense when absolute on-site control and long-term hardware amortization are priorities. Each choice shifts who owns complexity, which determines staffing, capital exposure, and how quickly you can add new call flows or integrations.

How Does Setup and Installation Change Everyday Work?

Cloud-hosted virtual systems are functional within hours, allowing teams to experiment with new call flows, routing rules, or softphone clients without waiting for contractor schedules. On-site PBX requires:

• A series of physical steps
• Approvals
• Wiring

Hence, adding lines or moving extensions often becomes a multi-week project that demands a dedicated facilities window and an IT escalation path.

Which Option Costs Less When You Factor in People and Time?

Subscription models shift spending from capital to operating budgets, lowering entry friction for small teams and pilots. That matters because some organizations convert those savings into product or hiring investments, and switching to a virtual phone system can save up to 50% on phone bills, allowing teams to reallocate budget immediately. 

Conversely, PBX setups may appear cheaper per month after hardware is fully depreciated, but only when installation and ongoing maintenance costs are amortized across many years and seats.

What Features Move the Needle for Agents and Customers?

Virtual platforms bundle modern conveniences, so teams get voicemail-to-email, mobile apps, and programmable routing without extra contracts. For contact centers, features that reduce wrap time and surface caller context are the most valuable. 

20% Productivity Increase

Supporting that point, a 2025 study found that virtual phone systems can increase productivity by 20% compared to traditional phone systems, resulting in fewer missed interactions and shorter handle times when those integrations are used. Traditional PBXs can be extended with add-ons, but each add-on typically adds procurement cycles and separate vendor management.

How Do Maintenance and Security Responsibilities Affect Operations?

When a provider manages updates and patches, your IT team spends fewer cycles on telecom upkeep and more on business tooling and monitoring. With PBX, your staff must own:

• Firmware
• Carrier failover
• Patch windows

This creates recurring operational load and the potential for hidden downtime during upgrades. That control may be necessary in strict regulatory cases, but it comes at a steady cost in hours and specialized skills.

When Does Mobility Become Decisive for Strategy?

If you support hybrid sales teams, remote agents, or international offices, the ability to route calls to apps and browsers changes hiring and retention choices. PBX can be retrofitted for remote access; however, that often requires gateways, complex VPNs, and carrier coordination. 

Choose PBX when physical desk presence is essential for legal or compliance reasons; choose virtual when scaling speed and geographic flexibility matter more.

What Are the Limits You Should Plan for Before Switching?

Expect vendor dependency with virtual systems, meaning you must evaluate SLAs, data exportability, and integration APIs up front. For PBX, plan for hardware lifecycle and spare parts, carrier contract churn, and the hidden cost of maintaining legacy handsets. 

In both cases, map who will own call quality monitoring and incident response, and run a failover exercise simulating an outage at peak hour to understand the fundamental recovery time objectives.

Inconsistent IVR and Slow Rollout

Most teams handle phone systems by preserving familiar on-prem voice controls because it feels safe and avoids retraining. That approach works initially, but as interactions scale, manual routing, inconsistent IVR experiences, and slow feature rollouts create measurable inefficiencies, such as:

• Longer time-to-resolution 
• Fractured reporting

Centralized Flows and Audit Trails

Platforms like AI voice agents provide a bridge, centralizing conversational flows via APIs and SDKs, automating routine inbound and outbound calls, preserving compliance audit trails, and delivering studio-quality speech that reduces manual intervention while keeping deployment options flexible, whether in the cloud or on-prem.

What Should Leaders Test Before Committing?

Run a short, measurable pilot that tracks three metrics over 30 days: mean time to answer, first contact resolution rate, and engineering hours spent on telecom tasks. Include realistic call volumes and the same CRM integrations you will use in production. If adding voice automation:

• Measure how much human time it replaces per completed interaction.
• Verify latency and transcription accuracy in the actual geographic regions you serve.

Virtual System vs. PBX

A practical metaphor to keep in mind: choosing between a virtual phone system and a PBX is like choosing between renting a modular workspace and owning a factory. The rental space gets you operational quickly and adapts to headcount changes, while the factory can be cheaper per unit if you commit for decades and accept maintenance burdens.

That simple fact points to one final test, the one everyone skips: measure the cost of delay, not just the cost of deployment. If a two-week delay in launching new call routing costs you leads or service quality, the low-friction, API-first path will likely be the better business decision.

Related Reading

• VoIP vs UCaaS
• Phone Masking
• How to Improve First Call Resolution
• Remote Work Culture
• VoIP Network Diagram
• Types of Customer Relationship Management
• Digital Engagement Platform
• HIPAA Compliant VoIP
• Multi Line Dialer
• Customer Experience ROI
• Telecom Expenses
• Call Center PCI Compliance
• What Is Asynchronous Communication
• Customer Experience Lifecycle
• What Is a Hunt Group in a Phone System
• Auto Attendant Script
• CX Automation Platform
• Measuring Customer Service
• Caller ID Reputation

Best Virtual Phone System Providers to Consider

Choose a reputable provider by testing technical fit, contractual clarity, and real-world support before you sign anything; a short, focused pilot will reveal whether the vendor actually meets your latency, recording, and porting needs. Below, I walk through practical checks you can run, then present a curated list of providers with the exact attributes you asked for so you can compare apples to apples.

How Do You Vet a Provider Quickly and Reliably?

• Start with proof you can measure, not promises you hope for. 
• Ask for a 14 to 30-day sandbox with production-like traffic, sample call detail records, and an API key so your engineers can simulate routing, recordings, and webhooks. 
• Require documented SLAs for uptime and call setup time, and validate support coverage, escalation paths, and the carrier diversity behind the service. 
• Check their security attestations (SOC 2, ISO 27001), encryption for signaling and media, and whether they support on-prem or private cloud deployments if you need them for compliance.

What Practical Porting and Compliance Checks Save the Most Headaches?

This challenge affects small e-commerce teams and legacy users alike: number porting and KYC phone requirements often trip teams up, so verify porting procedures before you migrate and try a dry run on a single number while keeping the old service active. Confirm the following:

• Who pays the porting fees?
• What documentation does the provider need?
• Whether the vendor will help with address verification or international porting address verification.

For merchants needing an email-first CS model, a typical pattern is to implement a simple voicemail auto-attendant that routes callers to email to meet regulatory or marketplace KYC requirements without opening a full-time phone channel.

How Should You Interpret Price and ROI Claims?

Ask vendors to justify savings with line-item comparisons, because headline pricing can obscure pooled minutes, international surcharges, and per-feature licensing. Cost justification is critical, since virtual phone systems can reduce communication costs by up to 30%. 

This demonstrates why finance teams often fast-track migrations when the math is straightforward. Still, it also means you must model pooled messages, per-user versus per-device charges, and overage rules before signing a contract.

Leads to Fragmented Tooling

Most teams handle selection by scanning feature lists and choosing the cheapest vendor, because it feels quick and concrete. That works early on, but as call volume, integrations, and compliance needs grow, that habit creates:

• Fragmented tooling
• Missed leads
• Expensive escapes 

Platforms like Voice AI provide a bridge, offering rapid-to-deploy, studio-quality conversational systems with low latency, APIs and SDKs, and options for cloud or on-prem deployment so that teams can automate inbound and outbound calls without rearchitecting call flows as they scale.

Which Providers Should You Shortlist?

1. Nextiva

Best For: Medium-sized businesses with a high daily call volume and team members across multiple locations

Pricing: $15-$75/user per month

Unlimited US and Canada Calling: Unlimited calling, with a free toll-free or local phone number

Visual Voicemail

• Voicemail-to-Email
• Voicemail Transcription
• Voicemail to SMS

Video Conferencing: Unlimited HD video conferencing for up to 250 participants

Call Recording: Call recording and video conference recording are only available on the two most expensive plans

Team Collaboration Tools

• Whiteboard
• Team chat
• Document sharing

SMS Texting

• 1000 pooled messages for the cheapest plan
• Unlimited SMS texts for the additional plan

What Operational Tests Expose Hidden Failure Modes?

Run three operational checks during your trial window, and make them concrete. 

1. Stress-test concurrent inbound and outbound call volume during a peak hour while measuring audio MOS and one-way latency; then flip carriers to force PSTN failover and verify automatic routing.
2. Exercise recording controls: start, pause, stop, export, and apply a legal hold to an archive file to ensure retention and export behave as you expect. 
3. Simulate a port-in and a port-out scenario, keeping the old service active; time the process and document each required document and step so you know the real calendar and cost.

Which Contractual Clauses You Must Never Skip

• Insist on rollback and exit terms that let you export numbers, recordings, and metadata in a usable format without punitive fees. 
• Confirm who is responsible for E911 provisioning and any per-call or per-minute PSTN egress charges. 
• Ask for data residency options if you operate across regulated markets, and require a clause allowing a 30-day proof-of-performance period where SLA credits or termination rights apply if the vendor fails basic tests.

How to Weigh Features Against Real Needs

• Make a short rubric: must-have, nice-to-have, optional. 
• Put core items like reliable US and Canadian calling, recording controls, and API access in the must-have section. 
• Place advanced transcription quality, 250-participant video, and whiteboard in nice-to-have unless your workflow depends on them. That discipline prevents feature-glut decisions that lead you to pay for capacity you never use, and it keeps procurement accountable for measurable ROI.

A Final Procurement Sanity Check

With over half of businesses now on virtual phone systems, vendor maturity is high but so is variance in pricing models, integration quality, and porting support, so check references and ask for examples of customers that migrated similar call volume and compliance needs within the last 12 months, then require a short technical onboarding plan and timeline from the vendor. 

Treat Vendor Choice as Risk

Over 50% of businesses have adopted virtual phone systems, which implies that vendor selection should be treated as an operational risk management decision rather than a simple checklist. That simple checklist leaves one question unresolved, and that’s the part that makes pilots reveal more than sales demos.

Try Our AI Voice Agents for Free Today

We know you spend hours chasing usable voiceovers or accept robotic narration that flattens customer conversations the way a bad mic ruins a live show, and that friction slows launches. 

Platforms like Voice AI deliver quick-to-launch, studio-quality AI voice agents with human-like timing and tone, low latency, APIs and SDKs, multilingual speech, and rapid cloning from seconds of audio so you can:

• Automate inbound and outbound calls
• Add believable voice-overs to content
• Try it free to hear the difference.