PBX Phone System: What Is It , How Does It Work and It's Business Benefits

Published on Updated on March 12, 2024

PBX phone system is a business telephone system. It is extensively used in enterprises to establish a telephone network. Enterprises use PBX systems as their private telephone network for inter-office and external global communication networks. Unlike the plain old telephone system i.e. POTS phone system, PBX has evolved in several ways.

From copper cable transmission to internet protocol (IP) audio signal transmission, the PBX telephone system has evolved with time and technology. If you are intended to implement the PBX phone system for your office communication system, you must know what it exactly is and how it works. If you don’t know, this post sheds light on PBX business phone system technology and also discusses its functioning protocol.

PBX Phone System

Introduction to PBX Phone System

PBX stands for Public Branch Exchange. It is a private business telephone system adopted by the organizations to establish a secure communication channel.

It can be used over copper cable connectivity and with the IP transmission media as well. PBX phone systems can be used with copper cable connection, analog, and digital combination transmission-lines, and voice over IP (VoIP).

Unlike the public switched telephone network that is the POTS phone system, the PBX telephone system allows multiple connections via a single telephone line. It saves the cost of acquiring an individual line for each communication device. Initially, the PBX phone system was developed to offer a private network for analog signal transmission for the office spaces.

Further, it evolved into an external connectable network using the POTS phone system. For the external user connection, PBX converts analog data to digital data or vice versa. Currently, Voice over IP (VoIP) technology is implemented to the PBX phone system for fast yet secured enterprise-centric communication.

PBX System Benefits for Businesses

In the business-centric environment, PBX phone systems are chosen over POTS phone systems due to their exceptional features. The following features of a PBX system benefits the Businesses.

  • Extension Dialing: It allows employees within an organization to connect with one another using internal extension numbers rather than dialing external phone numbers. This feature streamlines communication within the company, making it easier for employees to reach each other quickly and efficiently without needing to remember or look up full phone numbers.
  • Business Communication Hour Setting: PBX telephone systems enable businesses to set specific communication hours, which helps to define when incoming calls are accepted or forwarded to voicemail. With this feature businesses can manage their availability to customers or clients, ensuring that calls are handled appropriately during business hours while avoiding interruptions outside of designated times.
  • Caller Queue and Waiting Line: This functionality of PBX phone system can hold incoming call in a queue when all available lines are busy. Callers are informed of their position in the queue and can wait until a line becomes available. This feature enhances customer experience by reducing the likelihood of missed calls and providing callers with an organized waiting process.
  • Conference Calling: This feature is invaluable for businesses, because it allows businesses to conduct meetings, training sessions, or collaborating with remote teams. With conference calling, multiple participants / employees from different locations can communicate effectively without the need for physical proximity, promoting productivity and flexibility in business operations.
  • Voicemail: Voicemail feature enables callers to leave messages when the intended recipient is unavailable to answer the phone. PBX business phone systems store these messages digitally, allowing recipients to retrieve and manage their voicemails conveniently. Voicemail enhances communication by ensuring that important messages are captured even when recipients cannot answer calls immediately.
  • Call Recording: PBX systems offer call recording capabilities, allowing businesses to record and archive phone conversations for various purposes such as quality assurance, compliance, or training. Call recording helps businesses maintain accurate records of important communications, resolve disputes, and identify areas for improvement in customer service or employee performance.
  • Phone Record Audit: Phone record audit features enable businesses to track and analyze call data, including call duration, frequency, and destinations. This information provides valuable insights into communication patterns, helping businesses optimize their phone systems, identify trends, and make informed decisions to enhance efficiency and productivity.

Types of PBX Business Phone Systems

As business applications transitioned to the cloud, PBX business phone systems have also evolved to offer a variety of options to suit different business requirements. Here are primary types of PBX phone systems.

  1. Hosted PBX: It is also known as cloud PBX, virtual PBX, or IP PBX. Hosted PBX system enables businesses to manage their employee’s phones from web browser. Computers, cell phones and IP phones, almost any device with an internet connection can use the system, as it is hosted in the cloud instead of a physical server. Hosted PBX systems offer scalability, flexibility, and reduced infrastructure costs compared to on-premises solutions.
  2. On-premises PBX systems: This is an in-house communication system require an on-site server and manual wiring to each business phone to handle incoming and outgoing calls. Compare to hosted PBX systems, these systems are costly to maintain, scale, configure and vulnerable to security threats.
  3. Hybrid PBX: Hybrid PBX systems combine elements of both on-premises and hosted solutions. They allow businesses to retain certain functions on-site while leveraging cloud-based features for scalability and redundancy. Hybrid PBX systems offer flexibility and customization options to meet specific business requirements.

How Does a PBX System Work?

The traditional PBX phone system used copper-based telephone lines that relied on complicated analog switches and connectors. It was primarily operated by telephone operators.

This analog copper-based telephone network is ultimately connected with a PBX box, which enables analog voice data transmission over multiple telephone lines. The signal distribution over several lines is performed by telephony switches.

The telephony switches enable and direct the audio signal to a specific telephone within the network. Currently, PBX phone systems are IP based. Due to the benefits offered by internet protocol (IP), the analog to the digital transmission of an audio signal is performed by the PBX technology.

In this VoIP PBX, a virtual PBX network is utilized which can be operated from remote locations over internet-based systems. In this network, Ethernet cables are used, therefore digital signals can be easily transmitted.

In VoIP PBX, the virtual PBX system is used for analog to digital signal conversion. Further, the network features fiber optic telephony switches that direct the signal to different trunk lines.

Choosing the Best PBX Telephone System for Business

Before deciding which PBX system would be best for your business, look at the system you already have. If you already have On-premise PBX system installed and want to upgrade for better quality, security and advance features. Investing in hybrid system makes sense for you.

On other hand, businesses which are starting from scratch can go for a hosted system. It comes with remote work and near infinite scalability features.

By opting for a hosted or hybrid system with SIP trunking, businesses can reduce telecom costs by up to 60%.

Also consider below things while choosing the PBX system,

  • Reliability
  • Security
  • Flexibility
  • Cost
  • Support

As of now, the PBX phone system is introduced and working is explained, it is important to ensure the quality of Ethernet cables and Ethernet switches in order to achieve optimum benefits of this system.

Therefore, it is essential to source these products from a trusted manufacturer or supplier like VERSITRON. The company has been supplying premium quality fiber optic and data communication products for several years to several industries. The quality of their products definitely ensures better performance in your data communication network.

Rich Tull

Rich Tull
R.W. Tull is the President of Versitron, a leading technology company specializing in data communication and networking solutions. With expertise in Guiding network switches and media converters, R.W. Tull has played a pivotal role in driving Versitron's success. His deep understanding of these technologies has enabled the company to provide innovative and reliable solutions to clients. As a visionary leader, He ensures that Versitron remains at the forefront of the industry, delivering cutting-edge networking solutions that enhance data communication efficiency.
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