What is a PBX?

PBX meaning: what the letters stand for

PBX stands for private branch exchange. The ATIS Telecom Glossary, from a US telecommunications standards body, defines it as a subscriber-owned telephone exchange that usually includes access to the public phone network. Each word tells you something:

• Private: it belongs to one organization and serves only its people.
• Branch: it connects to the public phone network but is run separately from it.
• Exchange: the telephone industry's word for a switch, the equipment that connects one line to another.

"PBX system" and "PBX phone system" mean the same thing, as does "business phone system" when it has extensions and routes calls.

PBX vs PABX

PABX stands for private automatic branch exchange. In the glossary's strict sense, a PBX is run from a manual switchboard, while a PABX connects calls by itself, with or without an operator's board. The glossary also notes that "PBX" is far more common, whether the system is automatic or not. Modern systems all connect calls automatically, so in practice the two terms mean the same thing.

What a PBX does

A PBX decides which phone rings and what a caller hears on every call into your business, and sends your outgoing calls to the phone network. Each feature links to how it works on PBXflex.

The rules that tie these features together are your call flow. A typical one for a small office: the main number answers with a menu, option 1 rings the front desk ring group, and unanswered callers reach shared voicemail. After hours, the same number plays a different greeting.

A traditional PBX handles voice calls. Texting meant somebody's mobile, and fax usually meant a machine on its own line. On PBXflex, business texting and fax are included on every plan, in the same app as your calls.

How a PBX works

Every PBX, old or new, has three parts.

1. Call control. The brain. It holds your extensions, menus, ring groups and business hours, and applies them to every call. In a traditional system it is a cabinet of circuit cards. In a cloud PBX it is software on the provider's servers, managed in an app.
2. The carrier path. The link to the public phone network. Trunks are the lines that carry calls between your PBX and a phone carrier, often many at once. Your main number and every direct line arrive over those trunks.
3. Endpoints. Everything that rings or speaks: desk phones, computer and mobile apps, cordless handsets, paging speakers and fax machines.

What happens when someone calls you

1. A customer dials your main number.
2. The phone network delivers the call over your trunk to the PBX.
3. The PBX checks the time against your business hours and plays the matching greeting.
4. The caller presses 2 for billing, and the PBX sends the call to the billing queue.
5. The first person in billing to become free takes the call. A caller who would rather not wait can choose a callback or leave a message in shared voicemail.

Calls to a colleague's extension stay inside the PBX and skip the carrier. Outbound calls go down a trunk to the public network, showing your business number.

Types of PBX: traditional, IP and cloud

There are three kinds. They do the same job, but differ in where the switch lives and who looks after it.

Traditional (analog or digital) PBX

The original kind. A cabinet in a closet connects to the phone company over dedicated lines, and each desk has a handset wired back to it. Its limits are physical, and most changes need the installer. If your office still runs one, ask how long parts and support will last, and what moving off it involves.

On-premises IP PBX

An IP PBX handles calls as internet protocol (IP) data. On premises, the switch is a server or appliance in your office, and phones share your computers' network. You run it yourself, so someone on your side owns the server, its updates, its security and its backups.

Cloud PBX (hosted or virtual PBX)

A cloud PBX is an IP PBX that a provider runs for you. In everyday use, hosted, virtual and cloud PBX all name this one idea. There is no switch in your office. Your phones and apps connect over the internet, you change call flows in an app instead of calling an installer, and you pay monthly. PBXflex is a cloud PBX. See how PBXflex works as a hosted PBX.

PBX vs VoIP vs cloud phone system

A PBX decides where a call goes. VoIP (voice over internet protocol) is one way to carry the sound of the call. They answer different questions, so one phone system can be both: an older PBX carries calls over phone lines, a newer one over VoIP.

The FCC's rules define interconnected VoIP as real-time, two-way voice that needs a broadband connection at your location and internet-compatible equipment, and that can call and be called by ordinary phone numbers.

When a small business needs a PBX

A very small business may not need one. If one person answers every call and a single mobile number keeps up, a PBX adds little. The test is what happens when that person is busy, out sick or gone for good.

You need what a PBX does when:

• more than one person answers the main number
• callers need to reach a specific person or department
• calls after hours should be handled differently from daytime calls
• calls arrive in bursts, such as Monday mornings or the week before a deadline
• messages must not sit on one person's phone while they are away
• people work from home or from more than one office

Needing a PBX no longer means buying one. You can rent a cloud PBX and add or remove users as the team changes. If your phones work and the gap is texting and fax, the PBXflex Text & Fax plan sits beside your existing phones.

What a PBX costs today

An on-site PBX is mostly an upfront cost: the switch, handsets and installation, then phone lines and maintenance. A cloud PBX turns that into a monthly subscription, often priced per user, sometimes with usage on top, and desk phones are optional.

PBXflex publishes every rate. Essentials and Business are priced per user, every plan is month to month, and the pricing page lists them. Usage is billed in telecom credits, and one credit is one cent. A call in the US or Canada uses 1 credit a minute, and a text or a fax page, sent or received, uses 2. Number porting is free, and there is no regulatory recovery fee. Taxes and government fees are extra. For the full picture, see what a business phone system costs.

Moving from an old PBX to a cloud PBX

Write down what the old system does before you switch it off. This checklist works with any provider, with PBXflex details for each step.

1. List every number. Include the main line, direct lines, fax lines and toll-free numbers, and note which carrier and account each one is on. Federal rules define number portability as keeping your existing numbers at the same location when you switch carriers. Carriers and interconnected VoIP providers must help a valid port go through without unreasonable delay. Porting to PBXflex is free.
2. Write down your call flows. Record what callers hear, which phones ring, what happens after hours and where voicemail goes. On old systems, a hunt group is a ring group that rings in sequence, and an automated attendant is an IVR.
3. Decide desk phone or app, person by person. Every PBXflex extension works in the web app and on mobile, so you can start without desk phones. PBXflex sells desk phones ($89 standard, $189 executive, $229 cordless DECT) and rents them ($5 or $9 a month).
4. Find the devices that ring for a place, not a person. A lobby phone, warehouse phone, paging speaker or analog fax machine each needs a line. On PBXflex that is a shared-device line, at $10 a month, or retire the fax machine and use fax in the app.
5. Set an emergency address for every extension. Federal 911 rules for multi-line telephone systems cover PBX, Centrex and VoIP systems, on premises or in a provider's network. For systems installed after February 16, 2020, anyone must be able to dial 911 directly, with no 9 or other prefix. Every 911 call must also send a location. For a fixed desk phone, that is a dispatchable location: a validated street address plus details such as a suite number. Phones and apps that move may use a location the user updates, or other location information, when an automatic address is not technically feasible. PBXflex keeps an E911 address per extension in the app. Update it when someone moves.
6. Know the limits of 911 on VoIP. FCC rules require VoIP providers to tell you, in plain language, when 911 may not work, such as during a power outage or broadband failure, or after the equipment moves to a new address.
7. Check the office network. Desk phones on a cloud PBX share your internet connection. If your router or cabling is old, PBXflex offers a VoIP-ready firewall, configured, for $449, and Cat6 data drops at $225 each, installed. Both are optional, and on-site work is quoted per site.
8. Register texting if you will text from the business number. Business texts from a standard number run on a registered 10DLC campaign, and every PBXflex plan includes a low-volume campaign. See the 10DLC registration guide.
9. Choose who builds it. Self setup in the app costs nothing. Guided setup is $299 for up to 10 users, then $15 a user. It builds the IVR, queues and ring groups, ports your numbers, registers the texting campaign and includes a 30-minute training session.
10. Test, then port. From an outside phone, try every menu option, ring group and queue, the after-hours greeting and shared voicemail. Send and receive a test fax. Keep your old service running until your numbers have moved.