PBX System

A PBX system, or private branch exchange system, is an internal phone extension program specifically for businesses or offices, unlike common carriers or telephone companies that function on a larger scale.

PBX systems are also known as private automatic branch exchange (PABX) or electronic private automatic branch exchange (EPABX) systems. PBX systems not only implement telephones, but also fax machines, modems and other tools of telecommunication.

Some major components of PBX systems include:

  • Internal switching network
  • Microcontroller
  • Logic cards, switching and control cards, power cards
  • Stations or telephone sets
  • Switchboard

PBX systems manage connections between telephones of a private business or organization and connects it to the public switched telephone network through trunk lines.

PBXs have a different function when compared to key systems—which require users to manually select outgoing calls—because the PBX systems automatically choose the outgoing line and can use a dial plan. There are also hybrid systems that integrate features from both systems.

Features of a PBX System

As an in-house telephony switching system, PBX systems offers a variety of capabilities, such as:

  • Auto attendant
  • Auto dialing
  • Automatic call distributor
  • Automatic ring back
  • Call accounting (call logging)
  • Conference call
  • Custom greetings
  • Direct Inward Dialing
  • Call forwarding
  • Extension dialing
  • Hunt groups (directs multiple calls from one line)
  • Interactive voice response
  • Voice message broadcasting (send mass pre-recorded messages)

Cost of PBX Systems

The cost of installing a new PBX phone system can vary from $800 to $50,000, depending on the number of phone lines, features a business wants to integrate, and lease term. For example, if a small business only needs 2 handsets for three years, then the company can expect to pay about $35 per month, with a deposit of $880 for the PBX phone system.

Is a PBX System Right for Your Business?

Many medium- and large-sized businesses use a PBX system because it's a cost-effective way of routing many incoming and outgoing phone calls. Unlike traditional phone systems that connect an external phone line to every phone in the company, a PBX system can route from one number. Also, a PBX system is a user-friendly way of contacting fellow employees by dialing extensions with 3 to 4 numbers.

For small businesses, a PBX system can make your company seem larger than its real size. The auto attendant feature for small business PBX phone systems welcome callers with greeting messages and routes calls to various department and individual phones, as well as to voicemail.

In addition, a small business does not require an on-site PBX. Using a hosted PBX outsources equipment and system configurations. As a result, small businesses with less than 20 employees can find a cheaper hosted PBX to pay per user.

A PBX phone system can also aid in prioritizing high-volume calls when a small business is undergoing continual growth. In addition, a PBX system can save small businesses money because it avoids additional phone lines for easy integration.

Types of PBX Systems

There are various kinds of PBX systems:

Hosted PBX

A hosted PBX system offers the PBX system over the Internet (VoIP) or Public Switched Telephone Network (PSTN).

Hosted PBX systems and hardware are typically supplied by the off-site company. This scalability allows customers to save resources because they do not need to buy, set up or troubleshoot hardware and software.

This kind of PBX system provides a single number to represent the whole company. As a result, the company can operate at different physical locations or even work from home.

A hosted PBX system also offers multi-modal access, in which users can access the phone network through various telecommunication systems like cell phones, ISDN (Integrated Services Digital Network) or POTS (Plain Old Telephone Service). The purpose of this feature permits one phone extension in the PBX system to call different locations all at once or one after the other.

A virtual PBX system is a basic form of a hosted PBX system, as it is an automated answering service. Like a hosted PBX system, there is no hardware or software to purchase or manage. However, there are no business or call control features to establish a company’s yield or image. Users will need a separate phone service and cannot connect with extension dialing.

Another type of a hosted PBX system is the mobile PBX system, in which handheld devices are used as phone extensions. Unlike hosted PBX systems that forward calls to mobile phones, a mobile PBX system allows handheld devices to manage communication functions.

IP PBX System

An IP PBX system transmits signals over the Internet protocol using hardware or software. The virtual form, called "Soft PBX," utilizes a traditional PBX or key system to manage call routing.

IP PBX phone systems provide many advanced features for businesses, such as:

  • Dial-by-name directory
  • Shared line appearance
  • Call park & pickup
  • Call queue
  • Intercom & paging
  • Customizable auto attendant
  • Branch office system
  • Softphone and video phone use