What is a PBX?

A PBX is a Private Branch Exchange which manages and switches calls both internally within a business and with the outside world.

What is a PBX
The term Private Branch Exchange has been around for a long time but the technology has moved on considerably.

The traditional PBX system consists of two main elements: stations and lines. The lines are connections to the PSTN (Public Switched Telephony Network) via a telephone company. The stations are the end devices such as the phones you use to make calls. In the beginning a PBX was usually known as a switchboard, a piece of equipment with multiple lines which was managed by an operator. They would connect incoming callers to the right person and provide outgoing calls with a free line. As technology has moved on operators have been replaced by automated systems with additional features such as call queueing, conference calls and voicemail.

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While the original PBX relied on phone lines, today’s systems have the technological luxury of the internet. Voice calls can now be converted into data and transferred as an email or file would be. This means that there is no longer a need for a physical PBX and businesses have several options to consider.

Types of PBX Systems


Traditional (Analogue) PBX
A traditional PBX is a large, physical piece of equipment which is installed on your business premises. All on-site phone lines are connected to the box. The upfront cost of a traditional PBX is higher than modern alternatives, but as it is a one time only cost the price per employee will decrease as you add more ports / phone lines to it.

A key advantage of a traditional PBX system is that you can tailor the system to suit your business and can adjust it as needed as your business expands. However, because of the complexity of the traditional, bespoke PBX you will need an experienced engineer to complete the installation, carry out any updates or fix issues as they surface. This means you are in complete control, but also responsible for the system. Larger companies with their own IT team may find the ongoing maintenance and updates easier to manage than small companies.

It’s worth noting that by purchasing a traditional PBX you are investing in a piece of important equipment, but one that will begin to depreciate in value almost immediately after installation.

Hosted PBX

Today, a popular alternative to a traditional PBX is the hosted or Cloud PBX. There’s no need to install a physical exchange on your premises as the system is hosted and managed by your provider at a separate location.

The provider is responsible for updating the system and keeping it running smoothly; you simply need to plug in your phones and start making calls. Adding new features is as straightforward as downloading a new plugin.

A hosted PBX is a great choice for small businesses without dedicated IT teams to manage the system. The initial installation is usually less costly than a traditional PBX.

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A VoIP PBX system (also known as an IP PBX system) uses an internet connection to convert voice into packets of data which can then be transferred across a network just like email. VoIP stands for Voice over Internet Protocol. The system can be hardware based or software only and can also work alongside a traditional, landline setup.

Although the VoIP technology used is the same as that of a hosted solution, this IP PBX setup is different as the business owns and maintains the PBX as they would with a traditional system.

Using VoIP rather than landlines is a cheaper option especially if your business makes international or long distance calls.

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