What Is a Virtual Phone Number and How Does It Work?

A virtual phone number is a real UK telephone number — with a proper local area code — that isn't wired to a physical phone line. Instead of copper cables running to a wall socket, calls are routed over the internet and forwarded to your mobile, another landline, or multiple devices at once. Callers dial a standard number and have no idea it's virtual. It rings, you answer, and it works exactly like any other phone call.

If you've ever wondered how businesses run a local landline without a physical office, or how a sole trader in Birmingham can answer calls on a London 020 number, this is the technology behind it. Here's everything you need to know.

How a Virtual Phone Number Actually Works

Traditional landlines work by routing calls through copper wires — the UK's Public Switched Telephone Network (PSTN), built in the 1980s and now being switched off entirely by January 2027. A virtual phone number skips the copper entirely and uses Voice over Internet Protocol (VoIP) technology instead.

Here's what happens when someone calls your virtual number:

The entire process takes a fraction of a second. Call quality is identical to a traditional landline — the caller hears a normal ringtone and the conversation sounds no different.

Types of UK Virtual Phone Numbers

Not all virtual numbers are the same. In the UK, Ofcom allocates different number ranges for different purposes. Here's what's available:

For most UK small businesses, geographic numbers (01 and 02) are the strongest choice. They carry the most trust with consumers and signal a genuine local presence. Zen Internet research found that when given a choice, 50% of UK consumers would call a landline first — versus just 6% who'd choose a mobile number.

Geographic numbers follow specific formats set by Ofcom. The 02 range uses a 2+8 format (two-digit area code plus eight-digit subscriber number), covering major cities like London (020), Cardiff (029), and Belfast (028). The 01 range covers over 600 area codes across England, Scotland, Wales, and Northern Ireland.

With Virtually Local, you can choose from over 600 UK area codes — from 01224 Aberdeen to 01935 Yeovil, and everything in between. Each one is a genuine Ofcom-allocated geographic number that callers recognise and trust.

Virtual Numbers vs Traditional Landlines

The end result is the same — a customer calls a local number and you answer — but the technology behind it is fundamentally different. Here's how they compare:

The practical difference is significant. A traditional BT business line means paying £25–£30+ per month in line rental, waiting for an engineer visit, buying a desk phone, and being tied to a single address. A virtual number costs from £4.95 per month, activates in minutes, and rings on the phone already in your pocket.

For a detailed comparison, see our article on virtual phone numbers vs traditional landlines.

What Can You Do With a Virtual Number?

A virtual number isn't just a forwarding service. Modern platforms include features that used to require expensive PBX hardware and a dedicated IT team. Here's what a service like Virtually Local gives you:

• Call forwarding — Route calls to your mobile, a landline, or both. Change the destination any time through an online portal — no engineer needed.
• Time-of-day routing — Send calls to your mobile during working hours and straight to voicemail in the evenings. Set different rules for weekdays, weekends, and bank holidays.
• Voicemail to email — When you can't answer, callers leave a message that's delivered as an audio file straight to your inbox. No more dialling in to check messages.
• Missed call alerts — Get an instant email notification whenever you miss a call, with the caller's number so you can ring them back promptly.
• Hunt groups — Ring multiple team members at once, or in sequence, so the first available person picks up. No more single points of failure.
• Call recording — Record business calls for training, compliance, or dispute resolution. Recordings are stored securely and accessible online.
• Call reporting — See how many calls you receive, when they come in, how many you miss, and which numbers are calling. Data that helps you make better business decisions.

These features are managed through a simple online portal. There's no hardware to install, no software to download, and no technical knowledge required. If you can use a web browser, you can manage your virtual number.

Who Uses Virtual Phone Numbers?

The UK has 5.7 million private sector businesses, and the vast majority are small. Government figures show 3.2 million are sole proprietorships — people running businesses on their own. For these businesses, a virtual number solves a practical problem: how do you look professional without the overhead of a traditional office phone system?

Here are some typical use cases:

The common thread is simple: these businesses need to appear professional and local without the cost and complexity of traditional phone infrastructure.

The PSTN Switch-Off: Why This Matters Now

The UK's entire traditional telephone network — the PSTN — is being permanently switched off by the end of January 2027. This isn't optional. Every business currently using a traditional landline will need to migrate to an internet-based alternative.

Ofcom's Connected Nations report found that over two-thirds of UK landlines had already moved to VoIP by mid-2025, but 2.4 million businesses are still running on legacy PSTN or ISDN connections. If you're one of them, migration is coming whether you plan for it or not.

Virtual numbers already use internet-based technology. If you set one up today, there's no future migration to worry about — you're already on the technology that everything is moving to. For businesses still weighing up their options, that's a significant advantage.

Common Misconceptions About Virtual Numbers

Virtual numbers have been around for years, but myths persist. Let's clear up the most common ones:

How to Get a Virtual Phone Number

Setting up a virtual number with Virtually Local takes minutes, not days. Here's how it works:

Plans start from £4.95 per month with no setup fees, no long-term contracts, and no hidden charges. You can change your forwarding destination, add features, or cancel any time.

What Does a Virtual Number Cost?

Virtual numbers are dramatically cheaper than traditional business phone lines. Here's what you can expect to pay:

Because a virtual number is a dedicated business expense, the full monthly cost is allowable against tax. HMRC doesn't require you to apportion between personal and business use (as you would with a personal mobile), which makes the accounting straightforward. For more on this, see our article on why every small business should have a dedicated phone number.

The Bottom Line

A virtual phone number is a standard UK landline number that uses the internet instead of copper wires. Calls are forwarded to your mobile or any other phone, with professional features like business hours routing, voicemail to email, and hunt groups built in. Callers see a proper local landline number. You answer on your existing phone. The technology is invisible.

With the UK's PSTN network switching off in January 2027, every business landline will eventually need to move to internet-based technology. Virtual numbers already use this technology, so there's nothing to migrate later. They're cheaper, more flexible, and more feature-rich than the traditional lines they're replacing.

For UK small businesses, the question isn't really whether virtual numbers work — they've been proven technology for years. The question is whether you can afford not to have one. At £4.95 per month with no setup fees and no contract, it's one of the lowest-risk investments a business can make.