What Is PBX Phone System?

A PBX (private business exchange) is the software and or hardware that connects multiple incoming business calls to the right company departments. With a properly configured PBX phone system, incoming calls first reach an automated attendant, which helps to direct the calls to the right departments and employees. PBX systems also connect internal office calls with each other.

All businesses that use multiple extensions need a PBX; however, this doesn’t have to mean an expensive price tag every month, as Internet calling allows for monthly saving on all aspects of the phone system.

4 Different Types Of PBX

1. Traditional PBX

Traditional PBX connects callers through multiple phone lines to multiple extensions, as described above. Unlike the other types of PBX, which use Voice over Internet Protocol (VoIP) technology for very affordable Internet calling, traditional PBX phone systems have historically used copper based landlines to make and connect calls. This means traditional PBX can be more expensive to run due to line restrictions.

However, almost all of them can still use NBN & VOIP technology through the use of low cost ATA devices that convert VOIP lines into traditional lines that can now connect directly to a traditional PBX.

The problem is, many PBX providers do not want consumers to be aware of this fact, and you may need to find and contact an independent technician that is willing to be transparent. One of the main benefits of Traditional PBX is that you don’t have to pay ongoing fees.


IP (Internet Protocol) PBX is a clever upgrade to a traditional PBX. IP PBX offers the functionality of both a traditional PBX & IP PBX and Instead of only physically connecting to the PBX with copper wiring, these phones can also connect to the PBX over an office’s Local Area Network (LAN).

IP PBX switches calls between enterprise users on local lines, while allowing all users to share a certain number of external phone lines, utilising the data network. Like traditional PBX, IP PBX has install costs, however, IP PBX comes with a much lower overall cost including no ongoing equipment rental costs, much better VOIP line choices and freedom of VOIP provider.

IP PBX is also easier to maintain than traditional systems, as it’s not limited by the number of phone lines available. IP PBX’s only limitation is the bandwidth space on a company’s internet connection (and because the call data is compressed into digital packets, calls don’t take up very much space).

An IP PBX is a good option for companies that want direct control over how their PBX is configured in-house and don’t want to pay subscription fees associated with other PBX systems.

3. Hosted PBX

A hosted PBX is operated off-site and maintained by a provider. This type of PBX system is becoming a more popular option for businesses because they get the benefits of PBX (for a monthly fee) without the headache of having to maintain the system on-site. Since there is no initial investment, a hosted PBX can be a good option.

However, for businesses with more than 20 employees, it may be less expensive (in the long run) to operate an IP PBX of their own. When considering which PBX phone system is the best for your business, make sure to go through the options thoroughly with your PBX provider.

For more information about Hosted PBX providers, check out the 10 best Hosted PBX providers of 2017.

4. Virtual PBX

Virtual PBX is cloud-based. It is similar to Hosted PBX, but offers lower prices and fewer features. Virtual PBX runs a workplace’s office phones through the internet, and allows employees to work flexibly and productively without the traditional costs and limitations of an on-premise PBX phone system. For businesses that only use a few calling features (like voicemail, greetings and on hold music), an economical virtual PBX system can be an option worth considering.

Need some in-person advice on which PBX phone system is best for your business or how to find the right local technician? Don’t hesitate to ask us! Call Smart On Hold on (07) 3117 0700 today.