What is PBX

By Brian Boguhn
Updated: September 15, 2011

When looking into phone systems, one often finds that there are a lot of terms and acronyms thrown around. The assumption made by the people doing the talking is that those listening understand what is being said. In some case this is true. In other cases, the listener has no idea what is being passed along. A common term in this case would be PBX? Technophiles and administrators won’t have a problem understanding what a PBX is. The normal user, however, or an executive looking at alternatives for his company, might not. Let’s answer the question of what it is.

What does PBX stand for?

PBX stands for ‘private branch exchange’. It is a telephone exchange that serves a particular business or office. This is not the same as the public telephone exchange that phone carriers and telephone companies operate for the general public.

What is the function of the PBX?

The function of a PBX is to make connections among the internal phones of a private organization or business and also connect them to the public switched telephone network (PSTN) via trunk lines. End points on the PBX branch are referred to as extensions, and can include telephones, fax machines, modems, and more.

Users of the PBX share a certain number of outside lines for making telephone calls that are external to the PBX. Most medium-sized and larger companies use a PBX because it’s much less expensive to incorporate than connecting an external telephone line to every phone in the organization. Besides that, it’s easier to call someone within a PBX because only the extension (usually only 3 or 4 digits) needs to be dialed.

What types of PBX system are available?

Like VoIP, there are a couple of different flavors a company can look at when thinking about a PBX: a hosted solution as well as an onsite solution.

The hosted solution is offered as a service by a third party and provides PBX service over the PSTN and/or the Internet. It is usually the telephone company that is offering this type of service. The advantage here is that the customer doesn’t need to buy or install PBX equipment. The service is provided via a lease, and the phone company can use the same equipment to service multiple PBX hosting accounts. The beauty of the hosted system is that any service and maintenance can go on behind the scenes without the customer being directly affected. The phone company can handle most of the administrative duties, with someone onsite available to handle the simplest tasks.

The onsite solution is the other side of the coin. In this scenario, the customer invests in the equipment and has it installed locally at their place of business. There is more of a cash outlay here as well as the need to have someone onsite who can take care of the system, but this scenario does offer more control if that is what the customer desires.

Still going strong

The PBX may not be the sexy flavor of the month that VoIP currently is, but it is alive and well in today’s business world. PBX’s that are already owned offer very competitive services to its VoIP competitors.

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