Private Branch Exchange (PBX)

A Private Branch Exchange (PBX) is a private network of telecommunications devices that share one or more connections to the public network. Historically a PBX was a collection of physical cables that connected telephones to a switching mechanism that communicated with the public network and this evolved into different types of telecom devices (e.g. fax machines) and wireless devices (e.g. digital cordless handsets) being connected with ever increasing capabilities of the switching system where the PBX could share public connections and internal devices reached directly from the public network (e.g. direct dial numbers and fax machines) or via a distribution point (e.g. company reception). In the last decade Internet Protocol (IP) based PBX systems have emerged which allow the utilisation of local area network (lan) infrastructures and virtual PBX systems to achieve the same (and possibly greater) functionality as the traditional PBX without the same infrastructure and equipment requirements.

When a company uses an IP PBX system (also termed Voice over Internet Protocol (VoIP)) and an internal user makes a call to a traditional telephone line, that voice data must be routed by an Internet Telephony Gateway (ITG) that the LAN is connected to (even if via the nodes) between the virtual and the physical system whilst maintaining compatibility and quality as Xianhui & Lee (2009) state “routing is an essential data networking function that provides an efficient real-time data delivery required by VoIP”.

Compatibility is also managed by the ITG by converting the format of the VoIP data from the node, of which there are many, to the standard used on the traditional telephony network (PSTN). It must be remember however that compatibility is also important in terms of telephone numbers and VoIP devices therefore the ITG must have additional functionality to translate the signals between the normal telephone and the VoIP user. This is achieved by assigning static IP addresses to VoIP devices and hence unique telephone number can be used and translating numbers dialled by the VoIP user into compatible data for the public system.

I was the CEO of a company in 2001 that switched from a tradition PBX system to an IP PBX system and the cost savings were significant as we used existing cabling and moved all our communications onto PC/mobile devices and increased functionality (e.g. reaching people out of the office, direct dialling/faxing, videoconferencing and voicemail). At the time we had issues with performance and outages in heavy network demand periods as we used a single ADSL connection for all networking purposes (and therefore had to control Internet usage quite strictly). Also, we experienced what Sulkin (2001) predicted “it won’t do anyone any good if the performance of IP-PBXs doesn’t match the promise” and always insisted that we had to divert to mobile option in case of any kind of outage. The mobile option was much more expensive pro-rata that with the traditional PBX, however this backup solution only came into effect occasionally and therefore the benefits of an IP-PBX still outweighed the cost for us being a medium sized company (approx. 50 users).


Sulkin, A 2001, ‘Wait For IP Slows PBX Market’, Business Communications Review, 31, 1, p. 54, Communication & Mass Media Complete, EBSCOhost, viewed 13 May 2011.

Xianhui, C, & Lee J., C 2009, ‘VoIP Performance over Different Interior Gateway Protocols’, International Journal of Communication Networks & Information Security, 1, 1, pp. 34-41, Computers & Applied Sciences Complete, EBSCOhost, viewed 13 May 2011.