What Is a Virtual Phone Number, How It Works & Benefits
By Matt Mesar
| 30. June 2024 |
Phone system
By M. MesarMatt Mesar
| 30 Jun 2024 |
Phone system
    By M. MesarMatt Mesar
    | 30 Jun 2024
    Phone system

    What Is a Virtual Phone Number, How It Works & Benefits

    International calling is a cornerstone of any growing company. However, the call rates can quickly cut into your bottom line. And that’s why businesses use virtual phone numbers to save up to 75% of their call costs.

    In this article, we’ll discuss everything you need to know about the virtual phone number, including what it is, how it works, and why you should care.

    Key Takeaways:

    • A virtual phone number is a number that is not tied to a specific SIM card, device, or location. Instead, it uses VoIP technology to make calls over the Internet.
    • Virtual phone numbers give businesses the ability to make cheaper calls, easily manage remote teams, and tailor the numbers to their specific use case.
    • Virtual numbers differ based on their location, price, and best use case. They include local, international, toll-free, and vanity numbers.

    What Is a Virtual Phone Number?

    A virtual phone number is a telephone number that is not tied to a specific SIM card, device, or location. Instead, it is associated with a user’s Voice over Internet Protocol (VoIP) account, obtainable from a call center software provider, such as CloudTalk.

    Virtual phone numbers allow users to make, send, and receive calls and text messages over the Internet. Consequently, they empower remote workers to stay connected and effective anywhere in the world from their personal devices at discount rates.

    Start calling with a complimentary virtual phone number for 14 days free!

    How Does a Virtual Phone Number Work?

    As mentioned, virtual phone numbers leverage VoIP technology to make, send, and receive calls and text messages over the Internet. From a user perspective, they work just like any other regular phone number, as they can reach all devices equally.

    However, VoIP calling works very differently from traditional PBX and cellular systems behind the scenes. Below, we’ll break down how a virtual number works.

    1. Receiving Inputs: VoIP systems can use a device’s integrated or external microphone to pick up analog audio signals – in this case, your voice.
    2. Digitization: VoIP software then uses specialized codecs that capture and transform the analog inputs into digital signals to prepare them for transfer.
    3. Packetization: After digitization, VoIP codecs break up the files that would be too large to transfer efficiently into individual, smaller data packets.
    4. Data Transfer: The VoIP system then sends the data packets over the Internet to the receiver’s device, where they are reassembled in the correct order.
    5. Retrieval: The receiver’s device transforms your digitized voice back into analog outputs, which are played through the speakers/headphones as audible sound.
    6. Repetition: This process repeats on both sides of the line in real-time as you and your partner communicate, only ending after the call has been finished.

    It bears mentioning that, unlike traditional numbers, one person can own multiple virtual numbers and use them as they see fit. To make this work, you need an active VoIP provider subscription, a virtual number, and access to the Internet.

    We’ll discuss the advantages of this in a later section, so stay tuned.

    Benefits of a Virtual Phone Number

    Virtual phone lines offer numerous benefits for individuals and businesses alike, especially within the context of them as a part of VoIP call center software. Below, we’ll discuss some of the most important ones. 

    #1 Call Anywhere in the World

    Virtual phone numbers allow you to make and receive calls from anywhere in the world, as long as you have an internet connection. This is vital for remote workers calling into work but equally important for businesses growing their international operations.

    #2 Separate Business from Personal Calls

    By using a virtual phone line for business, you can keep your personal and professional communications distinct, helping maintain a work-life balance. But what’s more, you can also use local virtual numbers to increase pick-ups across different territories.

    #3 Get Lower Call Rates with International Numbers

    Virtual phone numbers often come with lower call rates for international calls, making it cost-effective to communicate with clients and partners overseas. In fact, you can save up to 75% on costs just by switching to a virtual business phone line.

    #4 Effectively Distribute Incoming Calls

    A virtual phone line can distribute incoming calls to multiple devices or team members, ensuring that calls are answered promptly and efficiently. What’s more, you can further increase the positive impact by leveraging advanced features like skill-based routing.

    #5 Modernize Your Voicemail Solution

    Virtual numbers often include advanced voicemail features, allowing you to receive voicemails via email or as AI text transcriptions, enhancing voicemail management, and giving you access to better customer insights for strategy and coaching in a click.

    #6 Improve Caller Satisfaction with Auto-Attendants

    Auto-attendants and Interactive Voice Response (IVR) systems can greet callers, answer simple questions, and transfer them to the right department. This significantly improves customer experience and streamlines call operations.

    #7 Track Marketing & Advertising Campaigns

    Apart from separating your personal and professional life, virtual phone numbers can also be used to isolate inbound and outbound marketing campaigns to identify the traffic source, evaluate performance, and drive further improvements.

    #8 Save Money on Infrastructure & Upgrades

    Since virtual phone numbers can work on any device, require no additional infrastructure, and receive regular updates and bug fixes from the VoIP provider, you can reinvest the money you’d spend otherwise into projects you’ll actually benefit from.

    Why Use a Virtual Phone Number for Business?

    Virtual business phone lines are vital for various reasons, many of which were mentioned in the previous section. First and foremost, they allow companies to increase their global reach, local pick-up rates, and marketing efforts with tailored numbers.

    Secondly, they save businesses significant resources. Virtual phone numbers allow companies to save money on costly infrastructure set-ups and equally expensive call rates. The same goes for time, which they optimize via advanced call center features.

    Finally, they empower teams to onboard and leverage the best talent available by enabling employees to work remotely, increasing overall agent satisfaction and reducing churn in the process.

    What are the Key Features of a Virtual Phone Number?

    Implementing virtual phone numbers into VoIP-powered call center software comes with numerous advanced features and third-party integrations. Below are the most relevant ones for this particular use case.

    • Voicemail: ​​Why settle for just voicemails? CloudTalk lets you review and respond to incoming messages directly through the app and even sends you voicemail transcriptions directly to your email.
    • Call Monitoring: Let managers and experienced agents join support and sales calls to provide assistance, evaluate agent performance, or even assess the effectiveness of call scripts.
    • Skill-Based Routing: Improve inbound calling by routing customers to the best possible agent. This feature also reprioritizes your group ringing strategy so that callers ring the most skilled agent first.
    • Interactive Voice Response: Give customers calling your support or customer success teams the chance to choose from top topics when calling in and reduce average call duration by 40%.

    Discover even more AI-powered and advanced call center features!

    Dashboard illustration

    How Do Virtual Numbers Empower Remote Work?

    Virtual numbers enable remote work by allowing employees to make and receive business calls from anywhere with an internet connection. This flexibility ensures continuous communication and productivity regardless of location.

    Advanced features like Call Forwarding, Voicemail-to-Email Transcription, and Auto-Attendants enhance remote work by managing calls efficiently and providing seamless access to messages. 

    Additionally, robust analytics and reporting tools help monitor remote team performance, ensuring effective communication and operational efficiency.

    Virtual Vs. Regular Phone Number: What Is the Difference?


    Virtual Phone Numbers

    Regular Phone Numbers





    Very flexible. Only tied to the user’s VoIP account.

    Not flexible. Tied to a location, device, or SIM.

    Device Flexibility

    Can be used on any device (mobile, PC, landline).

    Restricted to the assigned phone line/device.

    Call Forwarding

    Easily configurable. Can forward to multiple devices.

    Limited and often incurs extra charges.

    Call Rates

    Very affordable. Especially international.

    Expensive. Especially international.

    Setup & Maintenance

    Low, no physical infrastructure required.

    Higher. Requires physical phone lines for call center integration.


    Advanced features like email and text transcription.



    Commonly available.

    Rare and often expensive.


    High. Easy to move and add new numbers.

    ​​Low, difficult to move to a different location or provider.

    Call Management

    Advanced options, including call recording, analytics, etc.



    Excellent, ideal for remote teams.

    Limited, not ideal for remote work.


    Highly scalable due to software-centric design.



    Dependent on connection.

    Generally reliable.

    Types of Virtual Phone Numbers

    There are multiple types of virtual phone numbers, each differing in its unique digit composition, use case, and pricing. More specifically, this includes local, international, toll-free, and vanity numbers. Below you’ll find an overview of all four.







    Associated with a specific geographic area.

    Allows a local presence in foreign countries.

    Free to call, common in customer service.

    Customizable numbers that spell out words or phrases.


    Establishes a local presence.

    Facilitates international communication.

    Encourages customers to call without charge.

    Enhances brand recognition and recall.


    Standard for caller. Cheaper for business.

    Standard for caller. Cheaper for business.

    Free for the caller. Standard for business.

    Varies. Can be higher for premium numbers.

    Use Cases

    Small businesses, local services.

    nternational businesses, global customer support.

    Customer service hotlines and support centers.

    Marketing campaigns, brand lines.


    Easily obtainable.

    Easily obtainable.

    Easily obtainable.

    Medium difficulty to obtain.


    Easily scalable.

    Easily scalable.

    Easily scalable, can become expensive.

    Limited scalability due to format.


    +1 (423) 382-4744

    +421 041 021 498

    1-800 numbers in the US


    Discover the Future of Conversations

    How to Get a Virtual Phone Number?

    Generally speaking, anyone who signs up with a VoIP software provider gets at least one free virtual number based on their preferences – just like with CloudTalk!

    Businesses can also port their existing standard or virtual numbers to their new system via a straightforward process we discuss in our VoIP Number Porting Guide.

    Finally, you can purchase additional numbers by:

    1. Sign up or into your CloudTalk account.
    2. Navigate to the “Numbers” tab in the left-hand Dashboard menu.
    3. Click the “Buy New Number” button at the top of the new screen.
    4. Select the Country and Type of number you want to purchase.
    5. Submit the Necessary Documentation as specified in the bottom section.

    What happens afterward:

    1. You will see a confirmation banner in the top right corner and receive an email.
    2. Our Numbers Team will review your request.
    3. The Numbers Team will either add the number or follow up with you.
    4. After implementation, the Numbers Team will send a confirmation email.
    5. You will be billed for the number based on its unique aspects.

    Reduce Your Costs with a Virtual Phone Number

    As explained throughout this article, virtual numbers offer businesses several benefits. However, affordable call rates are still their main draw. And if that’s something your company needs, look no further than CloudTalk.

    We offer over 160 different international numbers with plenty of local, toll-free, and vanity alternatives. All you need to do is find the ones you like, complete the buying process with our numbers team, and start calling. So what are you waiting for? It’s time to grow!

    Grow your reach with 160+ international numbers!


    How much does a virtual phone number cost?

    The prices of virtual numbers differ largely based on their type and location. Local numbers for the US start at as little as $6. Every CloudTalk account gets a free business number at sign-up and can purchase or port additional ones for an appropriate cost.

    Do virtual phone numbers work with cell phones?

    Yes, virtual phone numbers can forward calls to any device, including cell phones, making them highly versatile.

    Can a traditional phone number become your virtual number?

    Yes, many providers offer number porting services to convert your existing traditional phone number into a virtual phone number.

    Are virtual numbers safe?

    Virtual phone numbers are generally safe and often include security features such as encryption and two-factor authentication to protect your communications.

    Are There Any Drawbacks to Virtual Phone Numbers?

    Potential drawbacks include reliance on internet connectivity and possible call quality issues, but these can often be mitigated with a reliable internet connection and a reputable provider.