What is PBX? Is it the Right Choice for you in 2021?

What is PBX? A good start to a great customer experience

A private telephone network to simplify how business calls are placed and received with dedicated lines to the telephone exchange. It offers key call center capabilities.

what is a private branch exchange (PBX)
What is Private Branch Exchange (PBX) ? | PBX phone systems

What is PBX?


PBX or private branch exchange is a telecommunications device used by businesses to route the calls made within, to, and from their phone network. The PBX phone systems connect lines to the PSTN (Public Switched Telephone Network). Also, they route incoming and outgoing calls based on pre-set rules programmed into it.

Components of PBX phone systems

Components of a PBX phone system | What is PBX?

A PBX phone system has the following components:


1. Private Branch Exchange Server: The main component of PBX phone systems. It handles everything from call routing to voicemail.


2. Voicemail server: This is where recorded voices for automated greetings, and all voicemail is stored.


3. Gateway: This connects the PBX to the PSTN transporting call signals to and from the business to the telecom network.


4. Analogue phones: These phones are used by agents to make and receive calls. They are connected to the PBX via phone lines.

Why do Businesses Use a PBX System Today?

Free internal communication

One of the primary advantages of a PBX phone system is the fact that they share a trunk line with internal phones. This results in free internal communication.

Lesser number of phone lines required

Reduces the number of phone lines that need to be purchased. For 50 agents, businesses need to buy only 7-10 phone lines since all communication is optimized by the PBX.

Extra features for handling high call volumes

PBX phone systems offer additional features for call management that allow businesses to handle high call volumes in an organized manner.

Configure call flows to an extent

Optimise call branching to the right teams or agents to the extent that the PBX infrastructure allows. Cloud PBX doesn’t have limits on infrastructure to configure call flows.

Easy call transfers

Get customers to the right department with essential types of call transfers offered by major PBX system providers.

Are PBX Business Phone Systems Still Relevant Today?

Infrastructure Heavy

PBX phone systems are infrastructure-heavy. They require components like PBX server, physical wires, voicemail server, etc to be bought and stored on-premises.

Prone to downtime

They’re prone to downtime. If there’s anything wrong with the primary server, the entire phone system comes to a standstill.

Expensive to set up

They are extremely expensive to set up and maintain as compared to the alternative, cloud phone systems. Most businesses take years to break even on this investment.

Difficult to maintain

They are difficult to maintain and offer low flexibility and control. It requires hours to add or remove a single agent and maintenance is dependant on the vendor’s support.

No Analytics

PBX systems don’t offer the analytics and visibility a cloud phone system does. This gives businesses no insight into their communication patterns and trends, making it hard to optimize processes.

Alternatives to PBX Phone Systems



Business communication needs have evolved and so have the channels that enable them. Here are three alternatives to PBX phone systems that better serve the needs of business communication today:

Cloud PBX phone system | Alternatives to PBX phone systems

Cloud PBX Phone Systems

Most of the PBX infrastructure is hosted on cloud, and all you need are phones. In this setup, you don’t need to buy bulky, expensive hardware. You can even route calls directly to agents’ mobile phones using cloud phone systems, enabling your agents to work remotely. This gives you the complete functionality of on-prem PBX along with a whole slew of innovative features.


On-Prem VoIP Phone Systems

The infrastructure on the on-prem VoIP phone systems is similar to PBX phone systems. The difference is that all communication happens over the Internet instead of the PSTN and that you can transfer a whole lot more than just voice via these channels. These systems also offer better features.


On-Prem VoIP phone system | Alternatives to PBX phone systems

Cloud VoIP Phone Systems

This again offers the complete functionality of on-prem VoIP phone systems, with additional features. You get the best of both worlds – no infrastructure required (except VoIP phones) and access to all the functionality of an on-prem VoIP phone system.


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Cloud PBX systems support today’s digital-first approach

Quick & Cost-Effective Setup, Zero Maintenance

No spending on infrastructure like hardware, handsets or license required. All you need is a computer and an internet connection. Zero set up & maintenance costs.

Scale In Real-Time

Get access to unlimited channels, virtual numbers and users to match the pace of your business growth. Never worry about the infrastructure.

Enable Remote Work In Minutes

Connect the solution to your employees’ personal devices so they can make and receive calls from anywhere, at any time. Track performance in real-time.

Customise Your Customer Communication

Use easy drag-and-drop UI to build call flows to match your business needs, set up automatic greetings, out-of-working hour alerts and much more.

On-The-Fly Updates, Latest Security Protocols

Skip personnel-specific on-site updates to software with updates to the cloud system to every user in real-time. Safeguard customer data with industry-leading SOPs.

Create a Single Source of Truth

Integrate cloud telephony with your CRM, Helpdesk or Servicedesk tool to unify customer data for personalised customer engagement. Enable app click to call for agents.

Exhaustive Customer Insights

Get key call & SMS analytics, understand the performance of conversations and find ways to optimise customer engagement.

Enhanced Customer Privacy

Allow agent-customer interactions without revealing either’s contact details to prevent infringement of customer privacy & future legal hassle.

Why do businesses need a Hosted PBX phone system?

Any business, with a customer facing team, that wants to streamline customer communication requires easy to use, cost-effective, reliable and scalable phone system. Find out why businesses need a Hosted PBX in this video.


What is PBX?

PBX or private branch exchange is a telecommunications device used by businesses to route all the calls made within, to, and from their phone network. A PBX connects a business’s internal phone lines to each other and to the PSTN (Public Switched Telephone Network). It has the intelligence to route incoming and outgoing calls based on pre-set rules programmed into it. Each terminating device connected to a PBX is called an “extension” and is assigned a unique (within that network) phone number.

What are the advantages of using a PBX phone system?

Benefit from free internal communication given a single trunk line within the organisation, reduce the number of lines for customer-facing teams, handle high call volumes better, set up call routing to agents and easy call transfers to specific teams.

What is the difference between PBX and VoIP?

PBX systems create voice signals and transfer them through the PSTN (Public Switched Telephone Network) before it is converted to voice at the receiver’s end. VoIP transfers audio to data signals, packages it and transfers it over the internet to the destination’s voice device (VoIP-enabled landline, handset, or PC) before it is decoded to voice signal for the receiver to hear it. PBX works through on-premise infrastructure, while VoIP can be on-premise or hosted.

Learn more about how IP PBX systems can offer far more than an on-premise PBX solution


How does PBX work?

PBX phone systems create voice signals and transfer them using phone lines and PBX boxes to the PSTN (Public Switched Telephone Network). The PSTN transfers the signals to the receiver’s landline or handset where these devices convert them to voice for the receiver to hear it.

Find why a cloud PBX system beats a PBX system hands down.

What is a PBX Operator?

A PBX operator is usually a telecom operator or an intermediary working with telecom networks and businesses to offer PBX telephony services.

Why Do Businesses Need a PBX system?

Businesses used to deploy PBX phone systems as a default way of setting up enterprise communication operations because of certain benefits: free internal communication, fair call management and routing capabilities, reducing costs using fewer lines for the significant scale of conversations, and more. Today cloud or hosted PBX phone systems offer far more benefits than PBX can offer.

Compare the two solutions now.


What is Cloud PBX?

Cloud PBX, also called hosted PBX phone systems or cloud telephony solution offers virtual number(s) that you can manage and set it up for your customer-facing teams with a few clicks via an online dashboard, configure customised call flows through easy drag-and-drop UI, and get rich call analytics to improve customer engagement and drive business results.

Asia’s most innovative companies use Exotel

Chirag Patel

Exotel's API documentation and implementation process is extremely simple and easy to follow. There were no hassles in setting it up. We use other cloud telephony platforms as well but Exotel gets a big thumbs-up from us for their ease of use.

Engineering Manager, 1mg

Shashank ND

We have worked across cloud telephony players and with other vendors, but the fact is Exotel is dependable.

Co-Founder & CEO, Practo

Prateek Jain

The number masking feature has been a very worthy addition to making our customer experience even better.

Former Associate Director - Driver Experience, Olacabs

Kumar Vinod

We used to use a traditional PBX system before. But that doesn’t have the capabilities of Exotel’s IVR system. So, we decided to use Exotel for our IVR cancellation system.

Senior Manager - Operations, redBus


Exotel's automated calls have helped in increasing our service levels and reducing our costs since there is no need for any manual intervention.

Senior Manager - Operations and Strategy

Praveen Kumar

Exotel's APIs are very clearly defined. Our tech team could integrate them in no time. It’s easy to incorporate into any product.

Assistant Vice President, Quikr Services

Ranjana DK

An excellent, user friendly and cost effective platform. Automations make it very easy for the caller and receiver to interact efficiently. We are truly glad to have moved to Exotel.

Sales and Marketing Manager, T0rq03 Sports & Adventures

Satish Chugh

Very supportive and understanding staff who have lived up to every expectation, and at times exceeded them too.

Senior Manager- Last Mile Design, Ekart

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E-book: Cloud telephony in a Nutshell

If you’re unclear about how cloud telephony can help your business (like hosted EPABX or PBX systems, start here. In this ebook, we talk in detail about the various options businesses are faced when they consider using cloud telephony for their business. And we decode each one of those and help you make a decision that is right for your business.

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