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A PBX is a private telephone switching system that replaces the telephone company’s central office within a business. It reduces costs by leasing fewer outbound lines and offers features like voicemail and call forwarding. PBXs can range from small systems for home use to robust systems for large enterprises. Popular manufacturers include Avaya, Mitel, Siemens, and NEC.
PBX (Private Branch eXchange) is a privately owned telephone switching system for managing multiple telephone lines without having to pay the telephone company to lease each line separately.
Normally a telephone line is connected to the telephone company’s local central office via “a trunk”. The central office is responsible for routing incoming and outgoing calls. It also provides other services like voicemail, call forwarding, caller ID and so on. The telephone company receives a monthly fee for this service.
A business that requires dozens or even hundreds of phones would quickly run into a very large phone bill!
A PBX essentially replaces the telephone company’s central office within the enterprise by acting as a point of exchange, routing calls. With an active PBX, each phone only needs an extension, not a phone number, and the PBX handles all desk-to-desk calls within the enterprise.
When an outside call is required, an access number is dialed first, usually a “9” (in the US). The PBX then transfers the call to the telephone company’s central office. From there the call is routed normally.
A PBX reduces costs because the business only pays for the number of outbound lines that can be connected at any given time. If a company has 100 phones, it’s unlikely that everyone is making an external call at the same time. Perhaps only 10% will require an outside line at any given time. Therefore the company would lease 10 lines from the telephone company instead of 100.
PBX systems can be basic or feature-rich, depending on what the customer is willing to pay. Voicemail, call forwarding, conference, intercom and transfer are just some of the options available.
A significant feature of a PBX is control over which numbers can and cannot be dialed from within the system. This can prevent calls abroad, to 900 numbers or to other expensive numbers that would be available without the system in place.
Small PBXs that can be used in a home or small business can be purchased for around $100 – $1,000 USD, depending on features. Larger PBXs that handle up to 75 lines start at around $1,000 and can go as high as $10,000. Robust systems are also available that handle up to 20,000 lines. These systems start at around $10,000 and can range up to ten times that amount. Asterisk, a promising free and open source version of the PBX software is currently under development; running Asterisk on a dedicated computer along with switching to VoIP can save you even more on your monthly phone bills.
Popular PBX systems include Avaya’s Definity series (System 75 and System 85) and Northern Telecom’s Meridian systems. Mitel, Siemens and NEC are among the other popular PBX manufacturers.
