What is a PABX Telephone System?

Private Automatic Branch Exchange Explained

By Lori Shepherd
Updated: March 28, 2011

Anyone “seasoned” enough to recall the days when telephone calls were aided by the help of an operator with plug boards, blinking lights, and enough wires and circuitry to supply an electronics shop, probably also remembers when that model gave way to private branch exchange, otherwise known as PBX. PBX is a private telephone network installed at companies, mostly medium to larger sized companies, making communication between departments and branches from any location effortless and more affordable than connecting an external telephone line to every telephone in an organization. For business owners and telecommunications decision makers at companies, PBX may be an ideal solution.

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How PBX Works

Not only does PBX solve the complexity of connecting numerous organizational telephones to external lines, but it also allows users within a PBX to dial either a 3 or 4 digit number to reach his/her party. Users of the PBX are also able to share a certain number of outside lines for making calls external to the PBX. A newer option now available with a PBX relieves the PBX-hosting company from housing the switching units on site and instead manages them from a local telephone office location.

How this work with incoming calls is the traditional PBX systems accept calls transferred from a public switched telephone network to one that is a private network. Incoming calls are transferred through a private switching system to a private number telephone system within the private system. For outgoing calls, callers enter a code, usually a 0 or 1 to access an outside line, once reached, the caller is connected to an outside line and proceeds with dialing the call as usual. With calls made internally, the PBX network allows calls similar to calls between private lines on a traditional public switched network with difference being that the calls on the PBX networked over private, internal telephone lines and switches.

The Evolution of PBX

Even though traditional PBX technology eventually replaced the operator with plug board who manually connected calls with a patch cable, it has evolved significantly through the decades. For example, what used to be an analog technology with much fewer numbers of telephone lines to support, PBX today now utilizes digital switches that support higher densities of internal telephone lines and connections to external lines and trunks. In fact, the proliferation of Voice over Internet Protocol (VoiP) networks have led to completely digital PBX systems that use digital technology and internet protocol to deliver calls to designated handset. IP-PBX systems are even less expensive than traditional PBX systems and are easier to configure. An added advantage to IP-PBX is that they can support both traditional handsets or VoIP or software-based telephones, where users plugs a headset into a computer and uses a virtual telephone to dial and receive calls.

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