The invention is a virtual gateway that mediates between a dual-mode subscriber device and an IP-based PBX. In particular, the virtual gateway includes a WLAN interface for communicating with the dual-mode subscriber device and a network interface (wired or wireless) for communicating with the IP-based PBX over the Internet. As such, the virtual gateway may relay voice and call control instructions between the dual-mode subscriber device and the IP-based PBX, and may provide the same call control functions to the dual-mode subscriber device provided by the call control processor in existing dual-mode phones. The invention further provides a dual-mode subscriber device suitable for operation with the virtual gateway. Because the dual-mode subscriber device does not require a call control processor, the battery life and cost of the device are significantly improved.