A PBX, or Private Branch Exchange, is the phone system inside a business. It connects your internal phones to each other and to the outside world, so ten or a thousand people can share a handful of phone lines and still be reached by one number.
How a PBX works
Every phone gets an extension. Calls from outside arrive over trunks (lines from a carrier), and the PBX decides where each call goes: to a person, a group, a menu or voicemail. Those decisions are called routing rules, and they can depend on the time of day, the caller's number or what the caller pressed.
The three types of PBX
- Traditional PBX: a hardware box in a cupboard using analog or digital lines. Reliable, but expensive to change.
- IP PBX: software that runs on a server and carries calls over your network and the internet using SIP. Cheap to extend and easy to integrate. Asterisk and FreeSWITCH power many of them.
- Hosted or cloud PBX (UCaaS): the provider runs everything and you pay monthly per user. Simple, but you rent rather than own.
Core features to expect
- Extensions, voicemail and call transfer
- IVR and auto attendant (see our IVR design guide)
- Ring groups and call queues
- Call recording and call detail records
- SIP trunk support (see SIP trunking explained)
- Fax to email, which many offices still need
- Softphones, mobile apps and reports
PBX, VoIP and UCaaS: what is the difference?
VoIP is the technology of making calls over the internet. A PBX is the system that manages calls for a business. UCaaS is a hosted service that bundles a PBX with chat and meetings. An IP PBX uses VoIP, and a cloud PBX is a PBX delivered as a service.
What does a PBX cost?
There are three cost models: hardware you buy once, software you license once, or a subscription per user. A subscription is easy to start but adds up over years. Use our PBX cost calculator with your own numbers. Do not forget your SIP trunk minutes and the server or VPS if you run it yourself.
How to choose a PBX: an 8-point checklist
- How many users and simultaneous calls do you need?
- Do you need fax, and is it built in?
- Will you host it yourself or want a provider to?
- Do you need queues, recording and live statistics?
- Which phones and softphones must it support?
- Can it integrate with your CRM through an API?
- What does support look like when calls stop?
- What is the total cost over three to five years?
Common mistakes
Buying for today's headcount only, ignoring internet bandwidth (check with the SIP bandwidth calculator), skipping a backup trunk, and treating fax as an afterthought.
Is a PBX still worth it?
Yes. Even teams that use chat and meetings still need a reliable business number, routing, recording and reporting. The question is which type fits you. If you want your own server, a free plan and fax in one system, see what Telvora PBX is or browse the glossary for any term here.
