Dalason Software Solutions Pvt. Ltd. - Your reliable outsourcing partner


A Private Branch eXchange (also called PBX, Private Business eXchange or PABX for Private Automatic Branch eXchange) is a telephone exchange that is owned by a private business, as opposed to one owned by a common carrier or by a telephone company.

Originally an organization's manual switchboard (operated by a person plugging cables into sockets) was known as a PMBX (Private Manual Branch eXchange). These were gradually replaced by automated electromechanical and then electronic switching systems, called PABXs (Private Automatic Branch eXchange). As PMBXes are almost unheard of these days, the terms PABX and PBX have become synonymous. When PABX's were built using solid state and digital components the term EPABX came into use but PBX is still more widely recognized. PBX's are differentiated from "Key Systems" in that users of Key systems manually select their own outgoing lines while PBX'x select the out going line (trunk) automatically. Hybrid Systems combine features of both.

Using a PBX/PABX saves connecting all of a business's telephone sets separately to the public telephone network (PSTN or ISDN). Such a set-up would require every set to have its own line (usually with a monthly recurring line charge), and "internal" calls would have to be routed out of the building to a central switch, only to come back in again.

In addition to telephone sets, fax machines, modems and many other communication devices can be connected to a PBX as well (although the PBX may degrade line quality for modems). For this reason, all such devices are generally referred to as extensions.

The PBX equipment is typically installed at a business's premises, and connects calls between the telephones installed there. In addition, a limited number of outside lines (called trunk lines) are usually available for making and receiving calls external to the site (i.e. to the public telephone network). Companies with multiple sites can connect their PBXs together with trunk lines. PBX-like services can also be provided by equipment located off site at a central provider, delivering services over the public telephone network. This is known as a hosted PBX. For example, most local phone companies offer a Centrex service in which each extension has a trunk line connected to the telephone company's Central Office. Other companies offer similar services.

PBXs are distinguished from smaller "key systems" by the fact that external lines are not normally indicated or selectable at an individual extension. From a user's point of view calls on a key system are made by selecting a specific outgoing line and dialing the external number; calls on a PBX are made by dialing 9 (or 0 in some systems) followed by the external number; an outgoing trunk line is automatically selected upon which to complete the call.

PBX Functions

Functionally, the PBX performs three main duties:

  • Establishing connections (circuits) between the telephone sets of two users. (e.g. mapping a dialed number to a physical phone, ensuring the phone isn't already busy)
  • Maintaining such connections as long as the users require them. (i.e. channeling voice signals between the users)
  • Providing information for accounting purposes (e.g. metering calls)


In addition to these basic functions, PBXs offer many other capabilities, with different manufacturers providing different features in an effort to differentiate their products. Common capabilities include (manufacturers may have a different name for each capability):

  • Direct Inward Dialing
  • Auto Attendant
  • Call transfer
  • Customised Abbreviated dialing (Speed Dialing)
  • Voice mail
  • Follow-me
  • Call forwarding on absence
  • Call forwarding on busy
  • Music on hold
  • Automatic ring back
  • Night service
  • Automatic call distributor
  • Call waiting
  • Call pick-up
  • Call park
  • Conference call
  • Call accounting
  • Voice paging (PA system)
  • Custom greetings
  • Shared message boxes (where a department can have a shared voicemail box)
  • Automated directory services (where callers can be routed to a given employee by keying or speaking the letters of the employee's name)