What is PBX?

By Neil Zawacki
Updated: September 09, 2011

You may have heard the term ‘PBX’ when researching office phones and wondered what exactly it means. This article will provide information about the technology and how it can be used at a small business.

A PBX (Private Branch Exchange) is a telephone switching system that can manage and connect multiple phone lines to each other without having to deal with the telephone company. They can also provide basic information to the administrator like the overall length of the phone call.

This might seem similar to a switchboard, but it’s not the same thing. A switchboard connects the private branch exchange to any outside callers. The PBX is responsible for all of the internal operations within the phone system. Each person receives an extension number instead of a phone number, and simply dials ‘9’ if they need to contact someone outside of the company.

The main benefit of a PBX is that it significantly lowers the cost of internal phone calls within an organization. The PBX handles all of the circuit switching, so you don’t have to pay the standard fees to the telephone company. The technology is thus quite popular among small businesses that need their employees to regularly contact other people working at the company.

A PBX can also provide access to a wide variety of special features. You can find out who’s calling your business through caller identification, put a caller on hold if you need to look up information, and make conference calls to other people who are within the organization. Many of them also provide the ability to record phone calls and have voicemail for employees.

Another advantage of a PBX is that the administrator can decide which phone numbers can be dialed within the system. This helps to prevent users from accidentally dialing international phone numbers or 900 numbers.

PBX’s used to require special phones in order to work, but are now compatible with just about every type of phone available. You can use a VoIP phone, mobile phone, or landline and still be able to connect to the system.

The main drawback with a PBX they that tend to be quite costly. A standard PBX (one that can handle 75 extensions) will generally cost somewhere between $1000 and $10,000. This price rises further for organizations that need a greater number of phone lines – there are PBX’s that can handle 20,000 or more users. The benefits of a PBX are notable, however, and they remain used to this day.
 

Featured Research
  • 8 Ways Business Travelers Can Save with VoIP

    Do you or any part of your workforce travel for work, or even telecommute? If that answer is yes, then you should be utilizing mobile VoIP. With VoIP, businesses have been found to save as much as 40% on local calls and a whopping 90% on international calling expenses. more

  • Phone System Showdown

    When it comes time to select your new phone system, one of the biggest questions that you will face is whether to go with the hot, new VoIP system or the steady and secure PBX network. There are pros and cons to each of these phone systems, and before making any purchase we highly suggest that you take the time to download and read our latest guide: Phone System Showdown: VoIP vs. PBX. more

  • Signals Your Company is Ready For Unified Communications

    Efficient and effective business collaboration is essential to company success and as you grow your business, you'll discover all the different communication methods that you NEED to stay connected with partners and customers. Implementing a Unified Communications (UC) system can save your company upwards of $920,000 a year due to increased efficiency amongst company employees. more

  • Phone System Implementation Expectations

    Providers would have you believe that implementing a new phone system is as easy as counting to three. However, while the process may not be difficult, there are steps that need to be taken to ensure that your new VoIP system is installed and implemented smoothly. Luckily, the challenges associated with upgrading your system tend to be fairly predictable. Most businesses run into the same set of problems that many others have faced before them, meaning avoiding or overcoming them is as easy as preparing ahead of time. more

  • Your Phone System and Your Bottom Line

    Businesses have been using phones to drive increases to their bottom lines for almost a century now. Telephony, much like the rest of the business world, has seen drastic changes with the increase in technological advancement. Voice Over Internet Protocol (VoIP), has enabled companies to connect with consumers at levels that have been seen as unheard of before. And trust us when we say this, it is doing wonders for the bottom line. more