This content is part of the Essential Guide: Unified communications technology basics

private branch exchange (PBX)

Contributor(s): Thomas Payne

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 analogtechnology originally. Today, PBXs use digitaltechnology (digital signals are converted to analog for outside calls on the local loop using plain old telephone service (POTS ). Nonetheless, PBXs can include network switches that accommodate analog phones into the enterprise's digital PBX system.

The equipment used in a PBX varies depending on the complexity of the system, for example, whether it is a traditional PBX to which copper telephone landlines are attached, whether the PBX accommodates a mix of analog and digital lines, whether it uses voice-over-IP (VoIP) hosted at the enterprise, or whether it's a cloud-based PBX system. Each is described below.

Traditional PBX phone systems use landline copper-based telephone lines that enter a business' premises where they are connected to a PBX box. That box contains telephony switches that allows calls to be distributed to different phones in an office and to allow those phones to access a limited number of outside lines (trunk lines).

An IP PBX uses digital phone signals, rather than analog landlines, to send calls. Because you can use Ethernet cables to connect your phones instead of traditional phone ones, no rewiring is needed.  IP PBX systems can also be hosted by management service providers. While hosted systems require monthly fees, there are fewer end-user hardware costs associated with its use. Smaller PBX systems, often referred to as virtual PBXs, offer hosted service but with fewer features. They are more appropriate for very small businesses. Hosted PBX service is sold by numerous provIders, including Nextiva, Vonage and Ring Central.

The equipment needed depends on the complexity and use of the PBX, for example, the types of phones used at a particular site. In general:

  • 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
  • Unified communications router (wireless and wired)
  • Phone handset (USB, VoIP and SIP)
  • VoIP gateway
  • IP PBX
  • Internet router
  • Cables, cabinets, uninterruptible power supply
  • Telephony application server

In some situations, alternatives to a PBX include centrex service (in which a pool of lines are rented at the phone company's central office), key telephone systems, and, for very small enterprises, primary rate Integrated Services Digital Network (ISDN). 

PBXs installed within the enterprise are sold by numerous vendors. They include: Northern Telecom (NORTEL), Rolm/Siemens, NEC, Fujitsu, Cisco, Avaya and Alcatel-Lucent. Hosted PBX systems are sold by Nextiva, Vonage and Ring Central, among others.

See also: IP PBX, private automatic branch exchange (PABX), Direct Outward Dialing (DOD), Direct Inward Dialing (DID)

This was last updated in May 2011

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Great paper. I have had a very good expercience with Teo Technologies (, these guys have been able to shrink down the solution into a single device which is currently used by govt agencies and offer the only DoD approved Secure End Point in the industry.

A hosted PBX or Virtual PBX System is a kind of business communication system that is managed and handled by PBX providers on the cloud. This kind of PBX allows businesses the freedom to not be bogged down by space or cost constraints. Virtual PBX India’s other important advantage it offers is the freedom to customise and integrate calls and SMS with app and product or website using APIs. For this kind of PBX, you can choose CloudConnect Communications that is one of the best same service providers in India

yes guys try to insert images to this post for easy illustration 


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