PBX Phone

A PBX phone is actually a PBX phone system. A PBX phone system is a telephone exchange that functions within a business or business location to route calls.

PBX Basics

PBX stands for Public Branch Exchange. PBX phone systems act like local switchboards, handling inbound and outbound calls. The traditional PBX communicates with the Plain Old Telephone Service (POTS) using electric, analog signals. The transmission process using the Public Switched Telephone Network (PTSN) is called circuit-switching.

Newer, Internet-based PBX phone systems use digital signals. PBX phone systems compress the digital signal and turn the data into packets, which the PBX sends over the Internet instead of the POTS. This transmission process is called packet-switching, using Voice over Internet Protocol (VoIP).

Benefits of PBX Phone Systems

Traditional PBX phone systems replaced the earlier key systems that companies used as their small business phone system. Key systems used phones with lights on the bottom of the phone that indicated a line in use.

Once PBX systems became affordable for small businesses, PBX phone systems became the standard for most small business telephone service. PBX phone systems are more efficient than key systems. PBX phone systems are faster and use fewer outside lines. Here's where they are really different:

Business PBX Phone System Providers

Key Systems

  • Key systems used dedicated lines. That meant busy signals.
  • Callers had to use a specific 'outside line' to make outbound phone calls.
  • Required more external lines.
  • Key system callers had to call a main line and be transferred. No direct inward dialing (DID).

PBX Systems

  • There's DID and extension-to-extension dialing on PBX phone systems.
  • PBX phone systems feature line "pools" that allow for next-available use.
  • With SIP trunking, fewer outside lines are needed.
  • PBX offers more internal extensions and scalability.
  • PBX includes automation and convenience features, such as voicemail.
  • PBX offers after-hours messages, directory service, music-on-hold, and other features.
  • PBX systems handle and route calls in-house using a local circuit switch, so phone bills for local phone service are lower.

The VoIP PBX Advantage

If PBX phone systems can do all that, why not stick with a traditional PBX? Why switch to a VoIP PBX phone system? There are a lot of reasons to make the switch to VoIP PBX. The major reasons to choose a VoIP PBX business phone system are cost, flexibility, convenience, and integration.

  • VoIP PBX systems are less expensive than traditional PBX phone service. Whether hosted or on-premises, VoIP PBX phone systems have less moving parts and machinery — almost everything is accomplished by software. That means fewer expenditures on service, repair, and upgrades than a traditional PBX. VoIP lines are also cheaper than analog lines.
  • VoIP PBX phone systems are easy to adapt to your business' changing needs. VoIP phone systems are flexible and easy when it comes to adding or subtracting lines/extensions, changing locations, or adding/subtracting additional features.
  • VoIP phone systems can offer efficient call control features to small business phone system clients that would be too expensive (or not supported) with a traditional PBX. VoIP PBX phone systems offer call controls such as
    • call flip
    • call waiting
    • click-to-dial
    • call record
    • caller ID with call waiting
    • voicemail-to-email
  • VoIP phone service makes it easy to connect with the office, wherever you are. Cell phones can be extensions, even using DIDs. Faxes can arrive in email inboxes. Voicemail messages can be transcribed and sent as email, or attached to an email as a soundclip.

VoIP PBX Basics

Business telephone service today involves more challenges than ever before. Employees on the road use cell phones as their primary work phone. Some employees work remotely.

Many businesses also need unified messaging services. Unified messaging is a way to integrate almost all forms of business communication, ensuring no call, fax, or email is ever lost because someone isn't at their desk.

That's where VoIP PBX comes in. A VoIP PBX phone system allows companies to bring their business telephone systems up-to-date and accommodate newer technologies.

VoIP PBX phone systems:

  • Use the Internet to deliver calls quicker and cheaper
  • Lower phone bills through free or inexpensive long-distance and international calls
  • Offer enterprise-level call control features for small businesses (conference calling, voicemail transcription, etc.)
  • Integrate cell phones and remote locations as extensions
  • Incorporate faxes, SMSs, and other media
  • Can be managed online, from anywhere
  • Lower or eliminate the maintenance and repair costs of a traditional PBX

VoIP PBX phone systems work with standard or VoIP phones. Standard analog phones require a VoIP adapter or VoIP gateway to use with a VoIP system.

Types of VoIP PBX Phone Systems

There are a lot of terms and abbreviations thrown around in the VoIP world. The ones you most need to pay attention to are the basic types of VoIP PBX small business phone systems.

There are three basic types of VoIP PBX small business telephone systems:

  • Hosted PBX (or hosted VoIP)
  • Virtual PBX
  • IP PBX

Hosted PBX

Hosted PBX eliminates the need for on-site management of a PBX system, while taking advantage of the speed and efficiency of the Internet as a delivery system.

  • The closet or space that was once dedicated to the traditional PBX 'phone box' is freed up
  • A third party, or VoIP provider, hosts and manages the PBX phone system
  • Hosted PBX eliminates the need for a dedicated employee to manage the on-site PBX system
  • All repairs, upgrades, and patches are handled by the VoIP provider

Hosted PBX phone systems offer a range of business features at economic prices that would be unaffordable for small business customers with a traditional PBX.

  • Anywhere, anytime access to the VoIP phone system
  • Cell phone integration
  • Unified messaging
  • Advanced call controls
  • Inexpensive flat rate or usage-based call plans

Virtual PBX

A virtual PBX phone system is a good solution for a SoHo PBX phone system, with just a few employees and a small budget. A virtual PBX phone system offers the same basic advantages of a hosted PBX system for small business phone service:

  • Voice delivered as data over the Internet
  • No maintenance or repair responsibilities
  • Call routing for incoming calls
  • More than one extension
  • Web management
  • Extensions with DID
  • Basic call controls such as call forward, call transfer, and call hold
  • Lower costs

The key difference between a virtual PBX and a hosted PBX is that a virtual PBX is the economy version of an already very economical service. Virtual PBX phone systems offer even lower prices, with fewer features. A virtual PBX is a good business phone system for the small office with few extensions and not a lot of call volume.

Virtual PBX systems offer the efficiency of IP phone service as a no-frills business telephone service. Virtual PBX systems typically offer only a handful of standard features (such as voicemail) and handle only incoming calls.

A virtual PBX might limit the number of extensions, offer a set number of minutes, and not include voicemail-to-email, for instance. However, the features available with a virtual PBX phone service are expanding every day. Be sure to check with the VoIP provider for service details.

Many virtual PBX VoIP providers also offer hosted VoIP service, which is another advantage to small business owners looking into a VoIP business telephone service. A virtual PBX phone system is an ideal SoHo PBX phone system for a company that might soon grow into a more fully-featured hosted VoIP service plan. A VoIP provider who can offer both options is probably a good fit.

IP PBX

An IP PBX is a completely Internet-based phone service with a PBX that resides on-premises. That may sound like a step back to the traditional PBX phone system and the need for complicated hardware, space, and professional services, but it's not. The IP PBX is simple to set up, monitor and maintain.

The standard PBX was a complicated, bulky box. The IP PBX is much simpler. An IP PBX is typically software and a PCI interface card on a dedicated computer, with a web-based interface for management that can be accessed anywhere there's an Internet connection. External hardware requirements are relatively minimal, such as dedicated PoE (Power over Ethernet) switches to power the IP phones, Ethernet cables to connect the phones to the Ethernet port, and routers.

The IP PBX offers the same flexibility, scalability, and convenience of a hosted VoIP PBX phone system. An IP PBX generally has the same call controls, plus a few additional advantages related to network integration, portability, and facilities management.

  • Integrates with the user's computer (click-to-dial, email IDs as caller IDs)
  • No phone wires — uses Ethernet cables to connect with the Internet
  • IP phones retain the identity of the user (via the configuration) when moved from desk to desk
  • Web-based PBX system management
  • Voice over WiFi (VoWiFi) phones can be used
  • Can use a softphone rather than phone hardware

The IP PBX allows for totally converged voice and data communication over the Internet. That means that everything is sent as data packets over the Internet. It also means that voice calls originate as data packets -- no conversion from analog to digital (using a VoIP adapter) first.

With an IP PBX phone system, the small business phone system becomes completely digital. Callers use IP phones that are connected directly to the VoIP network, and often to their computer. With an IP PBX phone system, traditional phone wiring is redundant.

The initial cost for a pure, 100% digital IP PBX phone system can be a little steeper than using hosted PBX phone services for a small business phone system. The expense of an IP PBX phone system is due primarily to the cost of IP phones. However, over time the cost of an IP PBX business phone system becomes significantly lower than a hosted PBX VoIP phone system. That's because many hosted PBX phone systems charge per user. With an on-site IP PBX, there is no monthly per-seat fee.

IP Phones

IP phones are an integral part of the IP PBX phone system. IP phones are phones built specifically to interact with the IP PBX network. They incorporate software elements such as stacks, clients, and codecs to create data packets. IP phones are connected to the local IP network by Ethernet or sometimes by WiFi.

Hot desking: IP phones are configured, like a computer, with the caller's identity. That identity can travel with them wherever they plug in their phone, making moves within the office easier on everybody. Voice over WiFi phones (VoWiFi) take this concept a step further: These mobile phones can act as a landline as the employee travels through the building or campus.

Callers using IP phones on an IP PBX business telephone system make phone or video (if supported) calls that are sent as data packets over the company's LAN or WAN, or over the Internet. Companies can even skip the phone hardware altogether and use softphones instead.

IP phones do have their disadvantages, as well. IP phones:

  • Can be expensive
  • Are vulnerable to network attacks
  • Can affect bandwidth consumption
  • Require a separate power source or PoE switches
  • Without QoS features, call quality can be affected by Internet congestion
  • Do not work well on high-latency Internet connections (satellite Internet, edge networks)
  • Are affected by non-standard (proprietary) codecs, resulting in compatibility issues

An IP PBX is a purely digital PBX phone system when used with dedicated IP phones. However, analog phones can also be used with the IP PBX. VoIP adapters or a VoIP gateway are needed to accommodate traditional phone hardware.

Opting not to invest in new IP phone hardware can save money when switching to an IP PBX, but it does eliminate many of the benefits of an IP PBX phone system.