What Is PBX?


“Your call is important to us. We are currently experiencing higher than normal call volumes. Please hold and someone will be right with you.”

If you’ve ever called a company, pressed any number, and heard a message like this one, you have used a PBX system. 

PBX, or Private Branch Exchange, is a private telephone network that is owned and operated within an individual company. Used by both large and small businesses, PBX is the in-house phone system used to share phone lines and route calls within and between employees of the same company. 

And as businesses grow, it is important to keep communication lines open and operating as efficiently as possible. The PBX system was created to make life easier, faster and more cost effective for companies to manage external and internal calls. 

In this article we will take a look at how the modern switchboard (aka PBX came to be, the different types of PBX systems, as well as the benefits companies experience when using a PBX system. Some common questions will also be answered, like, is PBX the same as VoIP and what is PBX vs PABX?

Let’s start at the beginning, almost 150 years ago. 

A Short History of PBX

The first manual telephone switchboard was invented not long after Alexander Graham Bell invented the telephone in 1878. From then, until the 1960s, whenever you wanted to talk to someone, you had to call the telephone operator and they would connect your phone directly to the person you were calling. 

Next, companies started installing internal switchboards and using their own operators. Then, in 1972 automation eliminated the need for an in-person operator, and the PABX (Private Automatic Branch Exchange) system was born. Today, since human operators no longer answer manual switchboards, the ‘A’ was removed and we have PBX. 

Fast forward to the twentieth century and PBX systems use primarily digital technology. From a single operator connecting one call at a time, to millions of calls being transferred automatically every minute, the switchboard has come a long way in a century and a half.

Types of PBX Systems

Depending on the equipment being used, your PBX system can be super complicated and take months to install or fully digital and take weeks, or even just a few days even to set up. Let’s take a look at the types of PBX systems. 

Traditional PBX

The traditional, or analog PBX, has been around since the early 70’s. It connects through the POTS (aka Plain Old Telephone Service) lines to the telephone company. All calls going through an analog PBX are transmitted through physical phone lines. 

When traditional PBX was first introduced, it was a huge step in improving the reliability and speed of connecting businesses and employees over the telephone. Analog phone lines use copper lines, and have limited capacity compared to the modern PBX systems available today.

The positive of an analog PBX is that it relies solely on physical connectivity inside of a business, so there is no impact if internet connections are unreliable.

Analog PBX Phone Systems


A more current version of PBX is the VoIP (Voice Over Internet Protocol) or IP (Internet Protocol) PBX. This newer PBX has the same basic functionality, but with a lot more bells and whistles made possible by the digital connection. The company still maintains a central box on site, but every single piece of equipment does not need to be hardwired into it to function. It’s also a more cost-effective solution since physical cabling connections are not required. 

Cloud PBX 

The next level is a Cloud PBX, also known as Hosted PBX, and is provided solely over the internet and administered by a third-party service provider. This is similar to the VoIP PBX, but without any equipment requirements (other than the desk phones you decide to use). There are also more benefits including device flexibility, scalability, and very little set up time. The service provider takes care of system maintenance and updates to the system.

Cloud Pbx

Benefits of PBX

The main benefit of a PBX is cost savings. By having an internal phone system, and not relying on the telephone company to manage every single call, your company saves on the cost of each line it brings in-house. With that, there are several other reasons why companies of all sizes choose PBX.

Easily transfer calls between employees and departments. An employee can receive a phone call and transfer to another employee within the company directly with the touch of a few buttons. This saves time and money, and creates a more efficient workflow.  

Ability to create “rules” for incoming and outgoing phone calls. Whether it is setting phone operating hours with an automatic message for when calls come in outside of regular business hours, or restricting outgoing calls to international numbers, there are countless ways businesses can use the options available in a PBX system.

Support a call center queue. While this option does cost more, a PBX has the ability to hold calls in queue. Capacity depends on system limitations. This is great for call centers of businesses who need to hold several people in queue at the same time. 

There are many other benefits, but these are the ones that most frequently cause businesses to start looking into a PBX system. 

Final Thoughts

As your business grows, there are many tools that you can put into place to save money, increase efficiencies and enhance communication. Installing a PBX phone system is one of them that really goes a long way in creating a more efficient and cost-effective solution.

Whether you decide to go with an on-premise solution or fully cloud-based PBX, Network Installers can help. We can work with you from the beginning, answering questions to help you figure out what type of system you need. Then, taking care of your design and installation needs. Finally, managing your fully cloud-based system if you want. We can do it all. 

Call today for a free quote and we can get you started.

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The Network Installers is a low voltage electrical contractor that provides data cabling, network installation, fiberoptic installation, and WIFI installation. We've been serving commercial customers since 2008 with exceptional quality, consistency, and professionalism.


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