Telephone Systems

Private Branch Exchange (PBX)

The Private Branch Exchange (PBX), also known as a Private Automatic Branch Exchange (PABX) or an Electronic Private Automatic Branch Exchange (EPABX), is a dedicated telephone exchange for a single business.

Typically, PBXs become efficient above 50 extensions. At their most elaborate and sophisticated, they are the phone system powerhouses that support major corporates with many thousands of users.

The PBX automatically makes connections between your organisation’s internal phones, as well as connecting them to the public switched telephone network (PSTN) via trunk lines. In this respect it differs from the Key System Unit (KSU) phone system that relies on individual users to make their own external connections.

Back in the days of centralised switchboard operators, the PBX was the standard system for companies with many employees. The technology evolved from the external exchanges operated by telephone companies and evolved over the years to become the standard corporate-level phone system.

Along with massively increased functionality, the technology of the latest PBX phone systems has become increasingly computerised and miniaturised. What’s more, the traditional differences between PBXs and key systems (designed for up to 50 employees) have become blurred as technology advances have made so-called virtual PBXs possible. Typically, these use broadband internet to carry data, a development that has reduced costs and brought many of the traditional advantages of the corporate PBX to SMEs.

Most modern PBXs support VoIP (VoIP PBX, IP-PBX or IPBX). Indeed, development of the PBX now seems to have gone full-circle as the latest corporate VoIP centres are hosted by operators or even telephone companies using Centrex, a PBX-like service that provides switching at a central office rather than at the customer’s premises. Although these modern IP Centrex systems offer essentially the same service as the original PBX, the concept has evolved so far that the term barely applies now.

Though all the talk seems to be about VoIP, the old circuit switched telephone network is alive and well and existing PBXs are often still competitive with modern IP Centrex systems.


  • Proven for very large organisations
  • Integrates well with major corporate functions such as call centres
  • Deceasing footprint of equipment
  • Proven technology
  • Convenient rack-mounted equipment
  • Integration with other IT equipment


  • May lack the convergence benefits of VoIP systems

Hosted PBX vs. On-premises PBX

For many businesses, the choice of phone systems will come down to either a hosted or an on-premises PBX. A hosted PBX is delivered as a service by the provider (usually billed monthly). The on-site equipment is limited to phones and basic routing devices. Everything else is managed by the service provider.

Reasons for choosing hosted PBX include:

  • Business can concentrate on what it does best rather than managing a phone system
  • Scalability
  • Seamless 24/7/365 service
  • No maintenance/upgrade burden
  • Flexible pricing makes budgeting easy

For businesses with up to 50 users, the low start up costs and minimal maintenance requirements of hosted PBX means this is often the next step up from a KSU system. On-premises PBX phone systems require all the required equipment to be on the customer’s site. The start up costs are higher, but the customer enjoys the following benefits:

  • More control (upgrade whenever needed)
  • Greater flexibility of use and features
  • Easy customisation
  • May be more cost-effective in the long term

If you need even more help choosing between phone systems, Telephone Systems (UK) Ltd can help you select a friendly phone systems dealer near you.