A hosted PBX (private branch exchange) is a phone system that is hosted and managed by a third-party service provider. It allows businesses to make and receive phone calls using internet-based technology, rather than traditional phone lines. With a hosted PBX, the service provider maintains and manages the PBX infrastructure, which is typically hosted in a data center. Businesses can access the PBX system through the internet and use it to make and receive calls, as well as access other features like voicemail, call forwarding, and caller ID. Hosted PBX systems are often preferred by small businesses because they are more cost-effective and easier to maintain than on-premises PBX systems.