What is a PBX Phone System?

What is a PBX Phone System?

When researching phone solutions for your business, you may have come across the acronym PBX, which stands for Private Branch Exchange. PBX is a term that basically means a business-grade phone system. Business phone systems offer key voice features that companies need to run successful and seamless daily operations. Some common features include extension dialing, business hour settings to route calls off hours, customer waiting for ques, music on hold, and conference calling. Residential telephone lines and cell phone services do not offer these optimized business features.

Today most PBX phone systems are digital and use the internet to send voice and video communications. In this article, we’ll take a closer look at the types of PBX systems companies are using.

Traditional Analog PBX Phone Systems

Traditional analog PBX phone systems have been around for a long time. They connect to the Public Switch Telephone Network (PSTN) over Plain Old Telephone Service (POTS) lines. The PBX manages calls between phones and fax machines by physically connecting them to copper wires. Incoming calls get routed through the PBX and out to the phones, and calls get transferred between phone via the PBX. The traditional PBX is typically stored on-premise in a telecom closet. The old systems are not capable of many modern-day phone systems features, like voice-to-email, and they are not able to deliver high definition voice calls.

On Premise IP PBX or VoIP PBX

As broadband internet replaced copper lines, Internet Protocol (IP) PBXs have become the most common systems used in enterprises. IP PBX delivers voice calls over the internet, otherwise known as VoIP. A premise-based IP PBX is a VoIP-based phone system that’s physically housed in a telecom closet. But instead of physically connecting to the PBX with copper wiring, phones connected to the PBX over an office’s Local Area Network (LAN), typically leverage the same internet connectivity as office computers. 

To maintain an on-premise IP PBX, you’ll need the help of an IT professional. The costs associated with an on-premise IP PBX include: equipment (PBX and phones), SIP Trunking or PRI service, and the IT professional’s time to deploy and maintain the phone system.

Hosted PBX or “Cloud Phone System”

A hosted PBX (or Virtual PBX) service takes the phone system out of your telecom closet and puts it “in the cloud.” Hosted PBX is a VoIP-based PBX that is maintained by a service provider and allows businesses to connect over the internet. For the customer, it eliminates the costs associated with on-premise maintenance, upgrading software, and service downtime. Everything is handled by the service provider.

Often, hosted PBX is the best choice for small to midsized businesses. Most hosted PBX providers do not require customers to purchase any equipment beyond IP phones. The SIP Trunking service is also handled by the PBX provider. Many hosted PBX providers offer browser-based administrative portals that give owners full control over how the phone service is used in the office. You can seamlessly add phones, extensions, users, and applications with just a few mouse clicks. 

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