What Is a PBX System and How Does It Work?

PBX Phone System_December2

As a small business, it’s possible to get by with only a few phone lines. However, as your company expands from a small startup to a thriving business with multiple employees, business needs are going to change. You’re going to want to extend phone connectivity to your whole staff. 

The only problem is, getting a new line for every employee can be rather expensive if you go down the traditional public switched telephone network (PSTN) path. To avoid these costs, many organizations choose to use a private branch exchange (PBX) system instead. But what is a PBX and how does it help businesses save money?

What Is a PBX Phone System?

Like a PSTN, a PBX allows you to connect and communicate with others. Unlike a PSTN, however, a PBX is a private network that’s capable of using multiple communication channels to establish connections. It also grants the user access to a plethora of productivity applications like call transfer, call recording, and voicemail. Finally, a PBX solution allows users to add more phones to their network and make calls with other users at no cost.  

How Does a PBX Phone System Work?

How a PBX system works depends on the type of system you use. These business phones come in a variety of packages, but most PBXs today are digital and leverage the internet to send voice and video communications. Since internet protocol (IP) PBXs can use ethernet cables, no rewiring is needed to add new phones to the network. This solution can also be hosted by a vendor, saving you money on hardware costs.


Both IP PBX and voice over internet protocol (VoIP) offer all the features you need from a business phone solution. But there are notable differences between the two options. An IP PBX converts digital signals using phone lines connected directly to the PSTN, whereas VoIP converts your voice into a digital package and sends the signal to a VoIP provider. The VoIP provider’s data center translates the signals to analog and sends them to the PSTN.

The Benefits of PBX

If you’re interested in installing a PBX solution, here are some of the benefits you can expect to experience.

  • Connect Your Offices: A PBX gives users the power to connect all of their office locations to the same phone system. 
  • Customized Greetings: Users can record messages they want to send to others. This is especially handy when you want to send an alert out to customers.
  • Easy Call Transfer: Transferring a call from one department to another is a breeze with a PBX system

Improve Your Operations With the Right Business Phone

CCT Telecomm is a premier telecommunications provider that takes pride in providing industry-leading communication services. In need of a business phone solution? We let you choose between our IP PBX and VoIP phone systems. If you need help with your decision, we can assess your business needs and provide a recommendation.

Reach out to us today to learn more about the products and services we offer.

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