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What is a Private Branch Exchange (PBX)?

We’re here to give you an easy to understand guide to PBX

Olivia Maier

· 4 min read

Searching for a new phone system shouldn’t be complicated…

But unfortunately many companies and providers will use terms that aren’t fully explained such as PBX. This can leave decision makers feeling confused and frustrated, which is the last thing we want for our customers and audience. That is why we wanted to take the time to break down the concept of PBX, so that you can feel more confident and informed when reading about different business phone solutions.

What is PBX?

When you think about some differences between your personal phone and your business phone, what comes to mind? For one there is this idea of internal and external communication within a business phone. You want the ability to keep your team members connected internally as you route external callers to the appropriate team member.

With business telephone systems there are multiple lines that require a system to help route and switch inbound and outbound calls. PBX is a type of telephone exchange, which is simply a telecommunications system that helps connect telephone calls between different subscriber lines. Think about how call routing used to be done, there would be a telephone operator who would manually connect calls via different cord pairs at a telephone switchboard. This process has now been automated, but thinking of that visual might help simplify the concept further.

PBX specifically is a switching system that serves a private organization, typically a large enterprise. The internal nature allows for switching between internal telephones without the need to add additional external phone lines. So with PBX there is one central business phone line that connects to a public switching telephone network. The public switching telephone network can connect an external caller to your business phone line. Once the external call is connected to your phone line, you may need to route the caller to the appropriate team member. That is where PBX would kick in, and switch the connection to allow the caller to be routed without relying on an additional phone line or different telephone number.

This concept of PBX holds true today, but thanks to innovations in technology there aren’t the same barriers to accessing your own PBX system. We said before that PBX typically serves large enterprises, and this is due to the bulky infrastructure needed and the high capital requirements to install and maintain these systems. However, with Cloud PBX this technology is more accessible than ever.

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Wait… What’s Cloud PBX?

Cloud PBX is able to offer the same functionalities as a traditional PBX system, however it is all done via the internet. This technology will automatically answer all external calls, and route them to the right internal user of your company. There is no need to connect to the public switching network, or to have physical copper phone lines. Instead, you’re able to benefit from cloud technology. A cloud PBX system is significantly more affordable than traditional PBX, and is typically paid for in a subscription model. This means that you can cancel at any time, and you won’t be left with bulky infrastructure on your premises.

Did You Say VoIP?

Yes, yes we did! VoIP systems are simply phone systems that enable internet based calling. These systems are able to send voice signals as compressed data packets over the internet, which are then decompressed back into voice signals for the user on the other end of the phone. This process takes place instantaneously, so there is no noticeable difference for your callers. VoIP systems in general are able to make big business technology such as PBX more accessible for businesses of all sizes. Even for big enterprises, VoIP just makes more sense as it is easier to scale, provide flexible working options, and increase productivity.

In the end…

PBX is simply a private switching exchange which allows calls to be routed without additional phone lines. When you take advantage of cloud PBX you’re able to access technology that is typically reserved for large businesses. Accessing cloud PBX is easy through VoIP systems like Yodel. You can get started with a cloud PBX system easily through Yodel’s free trial!

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