A private branch exchange (PBX) is a telephone system within an enterprise that switches calls between users on local lines, while enabling all users to share a certain number of external phone lines. In contrast to a public switched telephone network (PSTN), the main purpose of a PBX is to save the cost of requiring a line for each user to the telephone company’s central office.
Used as a business telephone system or private telephone network, a PBX is owned and operated by the enterprise rather than the telephone company — the telephone company of which may be considered a supplier or service provider, however. Private branch exchanges used analog technology originally. Today, PBXs use digital technology — digital signals are converted to analog for outside calls on the local loop using plain old telephone service (POTS). Nonetheless, PBXs can include network switching systems that accommodate analog phones into the enterprise’s digital PBX system.
How does PBX work?
The equipment used in a PBX varies depending on the complexity of the system — for example, whether it is a traditional PBX to which copper telephone landlines are attached, whether the PBX accommodates a mix of analog and digital lines, whether it uses voice over IP (VoIP) hosted at the enterprise or whether it’s a cloud-based PBX system. Each is described below.
Traditional PBX phone systems use landline copper-based telephone lines that enter a business’s premises, where they are connected to a PBX box. That box contains telephony switches that enable calls to be distributed to different phones in an office and those phones to access a limited number of outside lines — trunk lines.