PABX stands for Private Branch Exchange, which is a private telephone network used within a company or organization. The users of the PBX can communicate internally (within their company) and externally (with the outside world), using different communication channels like Voice over IP, ISDN or analog. A PBX also allows you to have more phones than physical phone lines (PTSN) and allows free calls between users. Additionally, it provides features like transfers, voicemail, call recording, interactive voice menus (IVRs) and call queues.
A PBX (private branch exchange) is a telephone system within an enterprise that switches calls between enterprise users on local lines while allowing all users to share a certain number of external phone lines. The main purpose of a PBX is to save the cost of requiring a line for each user to the telephone company’s central office.
The PBX is owned and operated by the enterprise rather than the telephone company (which may be a supplier or service provider, however). Private branch exchanges used analog technology originally. Today, PBXs use digital technology (digital signals are converted to analog for outside calls on the local loop using plain old telephone service (POTS ).
In some situations, alternatives to a PBX include centrex service (in which a pool of lines are rented at the phone company’s central office), key telephone systems, and, for very small enterprises, primary rate Integrated Services Digital Network (ISDN).