In this post, we’re going to answer the question, “What is PBX?”

At Network Telecom, we’ve been in the telecommunications industry for more than 40 years, and we’d love to share our expertise with you.

This post will provide you with lots of helpful information about PBX, the difference between business and residential phones, and how you can get a business phone system. Let’s jump right in!

business phone system upgrade

PBX allow businesses to have multiple phones share a phone line

What Is PBX?

PBX stands for “Private Branch Exchange.” A PBX system is a private telephone network that is used by an individual business or organization. It allows your business to use more phones than physical phone lines and lets you make free calls between internal users.

With a PBX system, you can communicate both externally with callers outside of your organization and internally with callers within your company using different communication channels such as:

Many phone systems today are digital instead of analog and use the internet to send voice and video communications.

Learn more about the difference between digital and analog

What Is PBX: History of Business Phone Systems

Manual Switchboard:

Telephone networks began in the late 1800s using a manual switchboard that routed all calls. Operators would answer each call and then plug in the phone cord into the appropriate jack. As businesses grew and multiple calls were coming in between multiple departments, the need for a better, less expensive system grew.

PBX Systems:

Because the manual switchboard required a separate line for each call, they weren’t very efficient or cost-effective. The PBX system was developed in the 1960s and allowed businesses to use multiple phones with an individual phone line.

Time Division Multiplexers (TDM):

In the 1970s TDM PBX was introduced which offered new features such as dial tone, call transfer, auto-attendants, and hold music.

TDM PBX  allowed businesses to have new features for their phone systems

VoIP PBX:

Even though VoIP was actually started in 1995, it didn’t catch on immediately. The increased availability of broadband and highspeed internet service in recent years has caused a surge in its popularity and wide-spread use of VoIP. These higher speeds have improved call quality and significantly cut down on the amount of calls dropped making VoIP a much more attractive alternative to traditional landlines.. VoIP is much cheaper than regular landlines and it offers lots of additional inexpensive or free features.

What Is PBX and How Does It Differ From a Residential Telephone Line?

A PBX Phone System differs from a residential telephone line in many different ways. It has key voice features that businesses need in order to function more efficiently and connect people at work.

For example, your business can have free desk-to-desk calling through different extension numbers without having to pay for a separate phone line for each individual phone in the company. Your residential phone, on the other hand, runs on an individual phone line that you pay for.

Here are some other great features that a VoIP phone can offer you that you can’t do with your traditional landline:

Voicemail to email message: You VoIP phone can convert a audio voicemail message to a text email message, so you can check your phone messages as you are checking your emails.

Softphone capabilities: VoIP allows you to turn other devices such as your tablet, laptop, or desktop computer into a phone.

Integration: You can integrate your VoIP with other third-party tools such as you sales software, email marketing software and your CRM tool.

Scalability: You can easily add additional lines without having to install extra copper wiring.

Call forwarding to Your Cellphone: With VoIP you can set it up so that if you are not in your office, you calls can be forwarded to your mobile device or home phone so you can essentially answer your calls from anywhere.

telephone lines

Each residential phone runs on a single phone line

What Is PBX? Advantages of a PBX System

A PBX business phone system gives you some very useful features that a residential phone system can’t. These include the ability to:

  • Have more phones than physical phone lines
  • Make calls free of charge between internal users
  • Transfer calls to extensions
  • Voicemail service
  • Call recording
  • Interactive voice response and call queues for customers
  • Business hour settings for routing calls after hours

What Is the Difference Between Traditional Analog and IP PBX?

Traditional Analog:

Traditional Analog PBX means that your system would operate using analog (traditional phone lines). The disadvantage of the traditional phone system is that you are limited to a certain maximum number of outside phone lines, known as trunks. You also only have a maximum number of internal phones or extensions. Users must share the outside lines if you want to make calls outside of your organization.

For example, if you only have two outside lines and they are currently being used, you will have to wait until someone finishes their call in order for you to make yours.

phne systems for businesses

Analog PBX uses traditional analog phone lines

IP PBX:

Because of the widespread use of the internet, many PBX systems are now using Internet Protocol (IP) as their communication channel instead of the traditional analog lines.

The biggest advantage of the IP PBX is that you can practically have an unlimited number of extensions and trunks so you are not restricted when you need to increase the size of your system.

IP PBX also lets you have more complex features that would be very expensive if you had them included on a traditional system. Some of these features include:

What Is PBX Hosted vs On-Premise

Hosted PBX

Hosted PBX, also known as hosted VoIP, is an internet phone system where your service provider looks after housing and handling the technology for your IP PBX at their location.

Your desk phones are then plugged into a router that will connect them through the internet to your service provider’s location. Your service provider will charge you a monthly fee that will include the number of minutes you can use as well as certain available features, or you can be charged at a per-call rate.If you know how many minutes on average you use per month, you can quite easily calculate your best option package.

A hosted PBX system is a good choice for businesses that don’t want to have a huge upfront investment and  smaller or newer businesses that don’t have the budget yet to purchase their own on-premise system.

free voip phone service

A hosted PBX is great for businesses that don’t want to have a huge upfront investment

On-Premise PBX:

On-premise PBX or an IP-PBX phone system is a lot like a traditional system in that the system itself is located in your facility, not at your service provider’s facility. You have IP phones that connect to your IP-PBX server through a Local Area Network. Your calls go through a traditional phone company as well as a VoIP system.

An on-premise PBX system is a good choice for businesses who want to have more control over their phone system and businesses that have the initial capital to invest upfront to enjoy savings down the road.

Where to Find a PBX System in Kitchener/Waterloo

Now that your questions have been answered about “What is PBX,” if you are looking to purchase a new PBX phone system, contact the telecommunication specialists at Network Telecom. We have been selling, installing, and servicing every type of business phone system for over 40 years. If your current phone system needs repairs, we are available to help you 24 hours a day 7 days a week, 365 days a year.

Need a New PBX Phone System? Network Telecom Can Help

If you need to update your current PBX phone system, partner with Network Telecom. We will help you choose the best phone system for your business. Whether you are looking to have a new phone system installed or your current system updated, you can trust Network Telecom to offer you the expert advice you require.

We also provide a full range of voice mail solutions and voice mail support services. If you are looking for helpful advice about how you can improve your current voicemail system, talk to the professionals at Network Telecom. In addition, we can help you with video conferencing solutions that will meet your business’s particular needs.

In addition to our accredited and certified technical expertise, we offer:

“Very satisfied with the services we received from their staff. They came in and helped us with our phone and fax network cables. They were fast, knowledgeable and got the job done right in a matter of hours!”

– Healing 7 Generations

Read More Testimonials

Contact us today for all of your telecommunication questions and concerns; we’d be happy to help you.

Contact Network Telecom