Definition: PABX

Private branch exchanges (PABXs) have been the backbone of inter- and intra-organizational voice communications for decades. It is a private network managed within an organization, consisting of numerous lines and stations. PABX uses a series of different platforms, such as Voice over Internet Protocol (VoIP), Integrated Services Digital Network (ISDN), etc. for communication. In a PABX system or PABX telephone system, the public switched telephone network (PSTN) is used to facilitate connections provided by the service provider.

To emphasize the importance of the PABX, without an automated system, a business might have to install a separate telephone line for each office. Not to mention that in a traditional system of separate telephone lines, calls originating from each office are billed as normal calls. A PABX system can facilitate sharing of telephone lines and businesses do not need to install separate lines for each office, so much so that even 20-30 telephone lines can facilitate up to 200 virtual telephone lines. Additionally, it allows employees to call each other by dealing with short extension numbers only, and best of all, the calls are free.

The system works efficiently because not all employees are expected to be on a call simultaneously and the system can transfer calls between executives seamlessly. PABX systems have proven to be very useful for small businesses working with limited cash flow.

How does a PABX work?

The PABX consists of a few integral components, namely a box for the internal parts, a telephone switchboard console for the operators, a computer for data processing, lines to connect the PABX to the PSTN, the hardware necessary for the system, endpoints (telephone, fax and other terminals), etc.

When it comes to how PABX works, modern systems use VoIP to send and receive digital signals. Once the analog signal is converted into a digital signal, the system can manage it as it wishes, like any other information of a digital nature. Other advanced features offered by PABXs include voicemail to email, auto attendant, conferencing, music on hold and/or message, caller ID, transfer call, speed dial, redial, etc.

Should you install your own PABX system or opt for a hosted system?

Since PABX has become a necessity for small and large businesses, one must be very careful before installing one. Setting up an in-house PABX can result in significant investment and maintenance costs. A company will also need to employ highly skilled IT professionals to troubleshoot problems (which arise occasionally) and update the entire system.

In contrast, PABX service providers offer all this installation as a service, along with maintenance, and businesses only need to pay a fixed monthly fee for this. Therefore, opting for a hosted phone system is a much smarter choice than installing the entire system at your workplace, especially for small businesses.