What is a PBX? Everything You Need to Know | VS Group

What is a PBX? Everything You Need to Know

For businesses and non-profit organisations, whether they’re small or large, a good telephone system is absolutely essential. Although websites are often now the “face” of your organisation, a phone conversation may often be the first time a customer or client interacts with you – and your one chance to form a relationship that could last for years to come.

That’s why it’s so important to make a good impression. A phone system that drops calls or leaves people on hold for ages means your leads won’t convert into customers, and your reputation will suffer. On the other hand, an efficient, powerful phone system shows that you’re an effective, smart and trustworthy organisation. In short, the phone system you choose matters a lot.

The kinds of phone networks that organisations have relied on over the years have changed. In the past, many organisations used a Private Branch Exchange System, or PBX. However, some organisations now find this system is no longer necessary, as alternatives like VoIP have more advantages.

Still, if you’re the owner or manager of a business or charity, you will likely want to consider all the telephony options available to you – including a PBX.

What is a PBX phone system, then, and what are its upsides and downsides? In this post, we’ll examine how a PBX system works and how it fits in the picture of an organisation’s telecommunications operations today.

What is a PBX phone system?

As we’ve said, PBX stands for Private Branch Exchange System, and the important word here is “private.” It is essentially a small, private branch of the telephone network that’s managed by an organisation, not by the public telephone operator.

PBX systems began to be used in the 1960s in large organisations that needed to make a lot of internal calls. Let’s visualise why this was necessary.

Imagine that you have Person A on the 5th floor, who needs to make a call to Person B on the 7th floor. Without a PBX, both people need to have phones that are connected to the public telephone network, and their calls travel through that public system. It’s as though Person A has to walk completely outside the building and then in again to travel to the 7th floor, rather than just taking the lift two floors up.

With a PBX, Person A can be connected just to the organisation’s own internal switchboard, which will connect them to Person B. That saves on the number of external phone lines the organisation has to pay for, which means saving money. This approach is also likely quicker and more efficient.

This is the picture of PBX systems early in their usage. As time passed, however, PBX systems gained more functionalities designed to be helpful in office settings, such as the ability to forward calls. By the 1980s and 1990s, PBX systems came with the sophisticated handsets many of us are used to seeing in offices, complete with buttons to make conference calls, put callers on hold, and many other functions.

PBX versus VoIP

Naturally, the original PBX systems relied on the PSTN, or public switched telephone network – as it was the only option available before the internet was widely used. In short, that’s the landline network that operates via copper wires underground.

However, as time passed, this PSTN network began to be seen as inferior. In the UK, our ageing PSTN is being phased out. It is set to be completely switched off by 2027, as the copper wires are degrading underground and it’s no longer worth the cost to repair them.

So, if an organisation didn’t want PBX systems relying on landlines, what is a PBX phone system alternative?

Private consumers who are being transitioned from the PSTN network are now using digital landlines that run on VoIP, or Voice Over Internet Protocol. Organisations are also turning to VoIP, which can be implemented in different ways. The core idea of VoIP is the same, though. Once internet speeds became faster, broadband connections became able to carry audio packets quickly from one user to another – basically mimicking the function of a phone line without using a landline at all.

In short, VoIP’s central feature is phone calls that are made over the internet. That being said, VoIP systems often offer more features, which we’ll discuss later.

Requirements for a PBX

As we’ve mentioned, PBX systems were really best suited to large organisations that made a lot of calls, especially internally. Therefore, these organisations typically didn’t mind spending money to invest in their own private telephone exchange. That meant buying a lot of hardware and maintaining a department of people in charge of managing it – possibly including human operators to switch the calls, in the early days of PBX.

However, in our current era, this approach feels like it takes a lot of resources to accomplish something that could be done much more simply.

Some organisations began to use solutions that melded VoIP technology with aspects of their existing PBX systems and sometimes other technologies. These include IP-PBX, cloud-based PBX, and SIP trunking.

Other organisations simply chose to use VoIP systems.

Drawbacks of a PBX

Firstly, it’s important to remember that in the UK, a traditional PBX running via landlines simply can’t exist after 2027. The PSTN landline network will no longer be available.

As for other aspects of a traditional PBX, it’s still true that operating a private, internal phone system requires a significant investment of time and resources. You’ll need tech support specialists to manage it. Since you are dealing with physical phone lines, the system is also rigid, meaning that it’s difficult to upsize or downsize as needed.

Also, as technology has developed, some of the phone features provided by a PBX, like call forwarding and group calls, are now available via other, cheaper methods.

What is a PBX phone system alternative?

So, if you’re still using a traditional PBX in the UK, what options can you choose before the PSTN network shuts down in 2027?


Small or medium enterprises (SMEs) often find that an externally managed VoIP system suits their needs well.

A VoIP system can provide many automated functionalities that streamline workloads. For example, you can use a virtual receptionist to ease strain on your own office personnel, or you can have the system transcribe voicemails and email them directly to you.

VoIP is typically also less expensive and more flexible. There’s no physical lines or hardware to deal with. You just have a monthly subscription for each user. If your organisation is growing and you need more users, just add more subscriptions. If your business shrinks, end a subscription. Likewise, you don’t have to maintain an entire tech support team in your business to deal with your phones. There’s external support available.

Moreover, VoIP offers collaboration functions like messaging and group video calls. And it integrates seamlessly with software you’re already using, making internet use and phone use work in sync together.

Perhaps most importantly of all, VoIP works anywhere as long as you have an internet connection (although it is important to have a strong, fast connection). In our current age of remote and hybrid working, this is absolutely a must.

When an employee is working at home on Tuesday and in the office on Wednesday, VoIP ensures that this employee’s experience of work is the same. There’s no need to adjust to different ways of dialling their work phone, for example. Even if your employee is at a customer’s office or another branch of your business, they can work just the same as always.

SIP trunking

If you’ve already got a PBX system and you don’t want to tear it down and start from scratch, SIP trunking is for you. Session Initiation Protocol (SIP) trunking builds on your existing PBX system to add two things – a VoIP phone system and multimedia communications. It brings together all these uses of your broadband system into one package.

SIP trunking provides the best in internal and external connectivity for your organisation. While your employees benefit from an IP-PBX system that sends their phone calls through the internet line just as the PBX did, they also get video communications – which are crucial in today’s age.

Plus, with SIP trunking you can keep the old physical phone handsets that your employees are used to. It’s a way of transitioning away from the soon-to-be-obsolete landlines without having to get used to a radically new way of making calls.

Turn to VS Group for your VoIP and SIP trunking needs

VS Group is a specialist telecommunications company providing phone, internet and cloud services to hosts of organisations, including many in the voluntary sector. We offer VoIP and SIP trunking services that are secure, reliable and often significantly less costly than our customers’ previous systems.

If you’d like to know more about the many functionalities that VoIP or SIP trunking could offer your organisation, our experts would be happy to chat with you by phone on 0330 094 0170. You can also email us at customerservice@vsgcomms.com



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