What is PBX?

Private Branch Exchange; more commonly known as PBX.

Rather than using a telephone company’s exchange, a business can purchase a PBX which forms part of their phone system. Essentially, the PBX acts as a private telephone network which allows businesses to communicate internally and externally, using different types of lines (subject to compatibility) such as IP, Analogue, Digital and ISDN.

It enables the business to have more control over their call activity.

It is a physical piece of equipment (also referred to as a “box”) which looks a little like a server. A PBX does not need to be hosted on-site, it can be hosted in a data centre and connected to via IP.

You will need a PBX if you are going to have a Hybrid Phone System or a self-hosted IP Phone System.

What are the different types of PBX?

There are four main types of PBX’s available:

  • Traditional PBX (located at the business or off-site and it uses analogue or digital systems)
  • On-Premise IP PBX (located at the business and it uses IP communications)
  • Hosted IP PBX (located offsite such as at a data centre and it uses IP communications)
  • Virtual PBX

Traditional PBX

Traditional PBX is a legacy system which has been in place from before IP was the best solution for businesses. This type of PBX uses traditional lines to make and connect calls such as ISDN. A Traditional PBX is also limited by the number of phone lines they can have. Overall, this proves to be more costly, especially on call costs.

With that in mind, most businesses tend to opt for an IP PBX (on-premise or hosted.)

On-Premise IP PBX

An On-premise IP PBX has all of the advantages of IP technology including the lower call costs. On average, call costs are 50% lower than a traditional PBX system.

An IP PBX is easier to maintain as it is only limited by bandwidth, which can easily be upgraded. An On-Premise solution is a good solution for businesses that want the control but don’t want to pay monthly subscription fees.

Hosted IP PBX

A Hosted IP PBX is essentially the same as the on-premise IP PBX; all the same advantages, plus one more. You can choose your phone system provider to host it at an off-site location and pay a monthly maintenance fee to take care of any configuration and upgrades.

Most businesses see this as a happy medium between an On-premise IP PBX and a Hosted Phone System (which has a pay-per-seat pricing model.)

Virtual PBX

A Virtual PBX is similar to a Hosted IP PBX except it has fewer features available. They tend to have basic features such as voicemail, hold music and routing to a single location but not much beyond that.

They are not a viable option for larger businesses or those who have more than one site.

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