PBX - Private Branch Exchange

A PBX (private branch exchange) is a telephone system within an enterprise that switches calls between enterprise users on local lines while allowing all users to share a certain number of external phone lines. The main purpose of a PBX is to save the cost of requiring a line for each user to the telephone company's central office.

The PBX is owned and operated by the enterprise rather than the telephone company (which may be a supplier or service provider, however). Private branch exchanges used analog technology originally. Today, PBXs use digital technology (digital signals are converted to analog for outside calls on the local loop (Telephone carrier’s network)  using plain old telephone service (POTS ).

A PBX includes:

  • Telephone trunk (multiple phone) lines that terminate at the PBX
  • A computer with memory that manages the switching of the calls within the PBX and in and out of it
  • The network of lines within the PBX
  • A console or switchboard for a human operator (optional)







Essentially there are three types of PBX systems:


The Analogue PBX System is the older style of PBX.  An Analog PBX sends the voice information as actual analogue sounds.  The information is sent as is and never gets changed in any way.      


A Digital PBX essentially takes analogue sound and converts it in to a digital format. Digital PBX’s will typically encode the voice using the industry standard G.711 codec.  Once the voice has been encoded, the information is sent using what is known as circuit switching



An IP PBX system is what is mainly known as a VOIP system (Voice over IP).  The IP PBX will convert the voice in to data and transfer it across the network as packets.  The voice packets are sent via a method known as packet switching which is a known technique for allowing a single network channel to handle multiple calls.

There is also the Hybrid PBX system.

A Hybrid system is a combination of a Digital and IP PBX systems.  These types of business phone systems are very popular currently as they allow organizations to transition to the emerging IP PBX systems whilst still retaining all the functionality of the digital PBX System.


As hardware base PBX does not provide the flexibility to shop for the most cost effective and feature rich system that is available on the market.  A software Base PBX system has proven to be more cost effective, feature rich and scalable.  A software-based IP PBX / PABX offers many benefits:

  • Easier to install & manage via web-based configuration interface
  • Far less expensive to purchase and expand than a hardware-based PBX / PABX
  • Improve productivity with presence, desktop based call control and extension management
  • No need for separate phone wiring – phones use computer network, easy hot desking!(move from one desk/office to the next without having to do any wiring or system reconfiguration)    
  • Deliver mobility by allowing employees to work from home using a remote extension
  • Choose between popular IP hardware phones or softphones - no vendor lock in
  • Receive & make calls via the standard PSTN using VoIP Gateways or cards
  • Save on monthly call costs using SIP trunks, VoIP providers or the Skype gateway!