VIRTUAL PHONE SERVICE

What is a virtual phone number and how does it work?

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The RingCentral app integrated in a laptop and business phone with an insert of a company's international business phone numbers
Written by Eric Kenney
Director, Product Marketing
Reviewed by Esther Yoon
VP, Product & Industry Marketing
Updated: 09 September 2024
In the past, businesses had no choice but to rely on landline-based phone systems and traditional phone numbers. Those numbers, as a result, were directly tied to a specific physical location—or, latterly, to a particular device, in the case of a business mobile number. 
With virtual phone numbers, those shackles are off, and the potential benefits for your business are almost boundless. Before we get to those, however, let’s cover the basics. 

What is a virtual phone number?

We all know what a phone number is, but what is a virtual number?

A virtual telephone number—sometimes also known as an online phone number, digital phone number or internet phone number—is one that doesn’t rely on the Public Switched Telephone Network (PSTN). That’s what most of us would call the traditional landline-based telephony network. 

Instead, virtual numbers rely on different technology entirely. They, as part of a virtual phone service like that offered by RingCentral, utilize Voice over Internet Protocol (VoIP). Calls to and from virtual numbers are transmitted over an internet connection rather than copper wires or fiber optic cabling. 

What that means is that virtual phone numbers are not exclusively tied to a specific phone or device. As long as a user has an internet connection and their communications software or app, they can make and take calls via their virtual phone number. This gives businesses and their workforce more flexibility in how and where they make and receive calls.

How does a virtual phone number work for business?

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A virtual phone number for business is one of the components of a virtual phone service. VoIP is the telephony technology that underpins those services.

In a nutshell, VoIP is what lets you take and make phone calls over the internet. Your voice gets transformed at one end of the call into digital data packets. Those packets are then transported—in the same way as an email or other digital communication—over the internet to the call’s recipient. The packets are then reformed into audio at the other end—all essentially instantaneously.

Much like traditional phone numbers, virtual numbers determine where the calls go. With the greater technicalities handled by your virtual phone service provider, that’s really all you need to know about how virtual telephone numbers work. 

What’s more interesting is the types of numbers available and how online phone numbers could benefit your business.

Types of virtual phone numbers

Aside from the technology behind them, virtual or VoIP phone numbers are very similar to the traditional alternative. So much so, you can get all the same types of numbers, whether they’re virtual or related to a traditional phone system.

Local virtual phone numbers

That means a virtual telephone number could look like a local phone number. For example, in the same way as a standard US landline number, it could have a three-digit area code at the start denoting a particular part of the country.

What’s different with an online phone number—and what makes it great for businesses looking to establish local presences around the country—is that you don’t have to have a physical address in that area to get and use a local number. 

If you choose RingCentral as your virtual phone number provider, you can choose from over 200 area codes for your number. Some of the area codes available include:

Toll-free virtual phone numbers

Virtual phone numbers can be toll-free numbers, too, and utilize the same toll-free prefixes as traditional landlines. In the USA, the most popular is 800, closely followed by the likes of 888, 877, 866, 855, and 844. 

Alternatives to virtual phone numbers and their main differences

If you’re a business looking to invest in your phone-based communications, there are two main alternatives to virtual phone numbers and the systems that provide them.

Landline-based numbers and systems

Before the advent of virtual phone numbers, all business phone systems used landlines and on-premises hardware. These types of systems involve copper wires (the physical phone line) connecting business phones to the PSTN.

With a landline-based setup, business numbers are directly connected to a single geographic location. You can invest in multi-line phone systems for greater flexibility but these systems are still much more limited than the virtual, VoIP-based alternative.

Cell phone numbers and contracts

Some businesses also invest in cell phone contracts for their teams and employees. That gives them more mobility than a landline-based system and is useful for traveling salespeople and others who are on the road a lot.

Cell phone numbers, however, are still linked to a particular mobile phone, device, or SIM card. You can’t quickly and easily access the same number and a full suite of communications features on any device, in the same way as you can with a virtual phone system.

How to get a virtual phone number

It’s often quick and easy to get virtual phone numbers. Unlike traditional phone numbers that need new telephone wires to be installed which could take days or weeks and be very expensive. 

In fact, you’ll often get a free virtual phone number when you subscribe to a plan from virtual phone system providers.

Getting additional numbers is also typically straightforward. From the online administrator account of their cloud-based software, businesses can buy a phone number online and assign it as a company phone number or to an individual user.

If you want to keep your previous phone number—if it’s been associated with your company for a long time, for instance—that’s not a problem, either. 

Most virtual phone service providers allow new subscribers to port their old business phone numbers from their traditional providers. That means you can combine the benefits of new, free phone numbers and that old contact number your customers recognize and trust.

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Business benefits of virtual phone numbers

If you get a virtual phone number free as part of a business communications solution, what advantages could it bring to your company? In short, it could help you:
 

  • Better connect your workforce across multiple business locations
  • Enable you to support remote and hybrid working arrangements
  • Provide access to the best talent around the world
  • Easily track the performance of marketing campaigns and other activities
  • Establish local presences in different areas or countries
  • Protect your personal number and privacy
For businesses that operate in multiple locations, it’s difficult to communicate and collaborate efficiently with a traditional phone system. 
What usually happens is that each location has its own phone system from different providers, which are typically not compatible with each other. This results in a disconnect between the different workforces of each location.
A modern business phone service with virtual phone numbers, however, is able to unite distributed staff from multiple locations. 
Using the cloud PBX component of your internet phone service, you can set it up so that calls reach the right destination regardless of location. Employees who are not even in the office can still be reached as long as they are connected to the business phone system via the internet.
Your business can also set up teams or departments under a single virtual phone number. By assigning a phone number to a department, you can set up a call queue where all incoming calls can be routed to all members of the department simultaneously or in chronological order. For instance, you can use the call queue features to distribute calls among available team members if you want your entire support team to handle every incoming call collectively.
There are so many options available to use virtual phone numbers for uniting your distributed workforce that are not available with traditional lines. Collaborative features like conference calling highlighted by consistent call quality, too, make a virtual system an even more efficient business calling solution.
Another benefit of using virtual phone numbers through a virtual phone service is that it allows organizations to offer their employees flexible and remote working options.
Since a virtual phone number can be accessed from anywhere, employees can do their job from anywhere—their home, a coffee shop, the beach. What’s more, they’ll be able to use call management tools such as call forward, call transfer, call blocking, and custom call rules, auto-replies, which can be set around your business hours.
This setup also allows your employees to explore opportunities for the business outside the office without worrying about missing a call or being unable to use the company phone number.
Moreover, it opens up the option of implementing BYOD (bring your own device) policies. Such policies can save your business money in terms of device provisioning while giving your employees the ability to use the company number to call, send and receive texts, and even virtually fax from their personal phones. This removes the need for them to carry multiple mobile devices for communication.
Since your business can now offer remote work options, you can expand your talent search exponentially. You can look for the best employees around the US—and even the world—even if they cannot physically come to your office’s location.
You can simply have them work remotely, from their home. They will still have access to official business phone numbers and the company phone system as long as they’re connected to the internet. Imagine the productivity boost with the best talent from around the world contributing to your organization.
You can also use your virtual phone numbers to measure the success of your sales and marketing campaigns. 
By associating specific phone numbers to campaigns, you can easily measure how many calls, inquiries, and leads the campaign is generating. 
Companies like RingCentral offer unlimited extensions to support large-scale campaigns. What’s more, you can integrate your communications platform seamlessly with RingSense for Sales, to reap all the benefits of AI-powered conversation intelligence.
You can also use virtual telephone numbers to run market tests and see patterns that can be useful to your business. 
For example, if you ran an ad in multiple cities, you may discover that your business is getting more calls from a particular city like Los Angeles compared to another city like New York. From there, you can investigate further and make the necessary changes to improve performance.
Virtual phone numbers aren’t tied to a particular geographic location. That means you can get local or international numbers to serve areas where you don’t actually have an office or premises. 
That’s great if your business needs or wants to expand to new audiences without the expense of physically moving there. You can simply get a new number from your VoIP provider and start using it to reach out to your new customers. 
When you do, you’re more likely to get a positive response. People are more likely to trust numbers they recognize, so pickup rates of calls from local numbers are generally higher.
You probably want to be available to your team, customers, and important stakeholders as often as possible. However, you likely also don’t want everyone under the sun to have your personal number.
Virtual phone numbers can help you satisfy both. With a virtual number, you can forward calls from important contacts to your cell, without sharing the personal number. 
In fact, with the right provider you can access the full functionality of your virtual phone systems from whichever device you like.

Potential virtual phone number limitations (particularly with the wrong provider)

It should be clear by now that virtual phone numbers can offer a lot of business benefits. However, it’s also worth keeping in mind the potential risks, limitations, and challenges.

Free virtual phone number challenges

If you choose to get a free virtual phone number from a provider like TextNow or TextFree, there are a few things you need to keep in mind:

  • Limited feature set - You’re getting your virtual phone number for free, so you shouldn’t expect any bells or whistles. The ability to call and text is about as good as it gets, and even then you may be limited in terms of minutes and messages.
  • Device dependent - Free virtual phone numbers can sometimes only be usable on mobile devices. That’s as compared to a virtual number from RingCentral which you can use on smartphones, tablets, desktops, laptops—pretty much any device you like.
  • Reassignment - Sometimes free virtual phone numbers get reassigned by their providers to a paying customer instead. That’s not ideal if you’ve started to rely on the number and your own customers have begun recognizing it as yours.

Virtual phone number reputation

While virtual phone numbers are used by a huge number of entirely reputable businesses, they’re also favored by a small number of fraudsters.
If you suspect a virtual number is being used for nefarious purposes, there are a few options for tracing its owner:

  • Reverse phone number lookup - There are a number of tools available online into which you can enter a phone number and attempt to find its owner.
  • CNAM (Caller ID Name) lookup - If you have a VoIP number, you can also contact your provider and ask them to perform a CNAM lookup. Providers hold these names in their databases and it’s a lot more difficult for virtual phone number subscribers to fake them than it is for the caller ID that may show up when they call you.  

A virtual phone number can make a very real difference for your business

The above are just some of the things you can do with virtual phone numbers and are among the many reasons why virtual phone systems are considered the best business phone service for small businesses. 

Far more than a free phone number app,  RingCentral delivers the advanced features of enterprise-level phone systems with the flexibility and mobility of web-based tools—all for affordable prices.

By signing up for a RingCentral account, you can also benefit from its partnerships like the one it has with Snap Recordings, which allows you to request custom, professional greetings. Add a slick call menu system into the mix and you’ll make a killer first impression that results in happy customers.

Virtual call center FAQs

The main difference between regular and virtual phone numbers is the technology behind them. Regular phone numbers use the PSTN, landline-based telephony network. Virtual phone numbers use VoIP technology, so you can make and take calls over the internet.
When it comes to what the numbers look like and how to use them, you’d be forgiven for not noticing if one was a virtual number or the traditional alternative.
A VoIP number and a virtual phone number are the same thing. They’re just two different ways of describing it. All virtual phone numbers use VoIP technology and all VoIP numbers are virtual, in that they’re not associated with a physical location, device, or phone line.
There are lots of benefits to using an internet phone number. For one, they can often be much more cost-effective than traditional numbers. You don’t have to pay for on-premises installation, hardware like desk phones, or ongoing maintenance. 
Other benefits include the fact that a virtual phone line or number generally comes as part of a wider communications solution. Choosing one like RingCentral RingEX means you can also get business text messaging, video calls, and more as part of the same package.
Yes, there’s no reason you can’t have as many virtual or web phone numbers as you desire. 
With RingCentral, you get one number per user as part of your RingEX subscription, and can then add additional local numbers, virtual 800 numbers, and more for an affordable monthly fee.
Yes, it’s just as safe to use internet phone numbers as it is to use a traditional landline. In fact, trustworthy digital phone number providers like RingCentral adhere to stringent security standards to ensure they protect users’ calls, information, and data.
The cost of an internet phone number depends very much on where and how you get it. There are some free virtual number services around, but they’re often limited when it comes to features or functionality. 
Instead, your business may be better off subscribing to a more holistic solution like RingCentral RingEX. With RingEX, you get a virtual phone number per user as part of your subscription, and can add more as needed—whichever pricing plan you choose.
A virtual phone number comes with the service you purchase. Think about it—it’s just like when you set up a landline or cell phone. There are, of course, apps that allow internet phone calls, which get you a phone number without shelling out anything.
TextNow, Textfree, and Google Voice are examples of virtual phone number providers that offer calling and texting. These apps assign you a number you can use to place free local phone calls and send texts to any number.
If you need international calling (without the increased call rates), more advanced call routing, and other sophisticated features and services like AI note-taking, voicemail transcription, call analytics, rich SMS and faxing capabilities, integrations with popular business apps such as Microsoft Teams, however, that’s more than those apps can offer.
Your best virtual phone number option is to sign up with a reputable company like RingCentral. RingCentral offers a range of pricing plans, all with a free virtual number and unlimited domestic calling.
Whether local calls are free when using your internet phone number will depend on your provider. If you’re a RingCentral RingEX user, you get unlimited calling in the USA and Canada as part of your monthly subscription—no additional fees.
There are a few important considerations when choosing a virtual phone number provider. These include the features offered alongside the number, the cost, customer support, and the reliability and security of the provider.
Features and cost should be looked at hand-in-hand. What you want is value for money. A phone service, for instance, that gives you the numbers you need, a mobile app for Android and iOS, and features like auto-attendant and call recording, for a reasonably monthly fee. Rather than a slightly cheaper option that gives you a virtual mobile number and little more besides.
We may be a little biased, but RingCentral RingEX is a virtual phone service that caters to the needs of businesses large and small. 
With it you can get whichever virtual numbers you need, a comprehensive feature set, integrations with your CRM and other business tools, and plenty more besides. 
If you receive a call from an unknown virtual number, you can trace its owner by using tools available online.
Try reverse phone number lookup sites, which can either be free or paid. You can also set up your device to display CNAM (caller ID name) and IP address, since caller ID alone is easy to fake. If you have your own virtual number, you can do a CNAM lookup with your VoIP provider.
If you suspect that a caller is faking their outgoing caller ID, you can use a CNAM lookup tool to get the CNAM data you need. As a last resort, you can try an IP address lookup, which should tell you its location, internet provider, and domain name.
Yes. You have a huge array of choices when it comes to virtual telephone numbers. 
You can, for example, choose a local area code that corresponds to a place where you don’t have an actual office but nevertheless offer products and services to. This way, you’ll establish credibility and even place a local call to that specific area. 
You can even take the customization further by requesting a vanity phone number. Companies usually get a vanity number to better represent their business and bolster their marketing efforts.
Globally-trusted virtual number providers like RingCentral offer local and toll-free virtual phone numbers in more than 100 countries, Canada included.
Sign up now to get a Canadian business number so you can start building a local presence and earn the trust of local customers.
When you sign up with RingCentral, you can choose whether you need a local or toll-free number with your account. If it’s the toll-free alternative you desire, you can then select from the list which RingCentral has available. 
You can also choose to add additional toll-free numbers to your account, as and when you desire. It’s as simple as heading to your online account, finding the Add number section, and then following the simple on-screen instruction. Each additional toll-free number is charged at just an additional $4.99 per month.
You can call 911 using a virtual phone number. However, what may be different is how (and how easily) law enforcement or first responders can find you. Traditional numbers are attached to a specific location, so the 911 operators automatically know from where you’re calling. Virtual numbers are by nature mobile, so that’s not the case. 
With some VoIP providers, you can attach an E911 address to a digital phone number to provide an address for first responders to automatically dispatch to.
As long as you have wi-fi or an internet connection, you can access all features of the RingCentral RingEX solution wherever you are. That includes getting voicemails left for all your virtual phone numbers. You can even set up visual voicemail and voicemail-to-email to preview messages in text form when you can’t listen to the audio.
RingCentral RingEX comes complete with multi-level auto-attendant and IVR. That means you can easily set rules to route calls to a Dial-By-Name Directory, system extensions, voicemail, or even external phone numbers.
You can set different rules for different virtual phone numbers and generally customize the system to best suit your business.
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