What is a PBX Business telephone system and how does it work?

PBX Business telephone system

​What Does PBX Stand For?

PBX is short for Private Branch Exchange. It is a private communications network used within an organization or a company. All the users within this telephone network can communicate internally (within the business with other employees), or externally (outside the business with other people) using separate channels such as analog, ISDN, Voice-over IP.


Moreover, it allows free calls within the network and also provides you with more phones rather than phone lines. There are several advantages of using Private Branch Exchange. For instance, it is much less costly for a business, does not require any expertise to use, does not need any specialized hardware or software, and is rich in features!

​What Is Needed For Setting Up A Private Branch Exchange?

Well, the requirements depend on the type of Private Branch Exchange you want to set up for your organization. However, here are some of the necessary requirements.


  • Multiple phone lines
  • A computer(s) that manages the calls in and out of the company
  • A wireless or wired unified communications router
  • Telephone sets
  • VoIP gateway
  • IP PBX
  • Internet router
  • Uninterruptible power supply, cables, cabinets
  • Telephony application server


Once it is all set up, your organization can attend all inbound and outbound calls. Also, it provides features such as Interactive Voice Response, allow agents to make and take calls from their desks, conferencing capabilities, check the productivity of your agents, provide training, among many others!

​How Does a PBX Work?

Now that you know what a Private Branch Exchange (PBX) is and what you need to set it up let us see about the mechanism behind how it works. A PBX works in a similar way to a switchboard operator at a phone communications inception. Any incoming call came to the switchboard operator, and then it was manually directed to the desired contact by the operator. However, with all the technological advancements and breakthroughs, we do not need any switchboard operators anymore. 


Advanced computer programming and softwares are now able to dispatch and receive calls efficiently and quickly. The best part is, your callers always get connected with their desired attendees. So, it is an excellent way of providing exceptional customer service!

​Is a PBX the Right Choice for Your Business?

You might be wondering whether a PBX system is right for your business or not. Well, if you are a rapidly growing business or a smaller one with a lower budget, it might be a good option for you. PBX systems are highly efficient and cost-effective, which means it will save you a lot of money over the long term. Also, it cut costs by eliminating the need for receptionists or IT teams for all the technical hardware!

The Bottom Line

In a nutshell, a PBX system is a great investment in a business. It reduces costs, improves customer service, allows employee flexibility, is user-friendly, set up is easy and quick, and comes with tons of features! So, if you are wondering whether you should get a PBX system or not, well, you definitely should!