PBX network stands for “Private Branch Exchange network,” an internal telephone system that allows users within an organization to have their own phone lines. However, these phone lines are connected to the PBX network, not directly to a phone company’s network. In contrast to home phones that telecommunications companies manage, an enterprise operates a PBX network.

In the past, calling a company that uses a PBX network would direct you to an operator who then connects you to the department or person you’re calling. These days, a PBX network can be attached to an Interactive Voice Response (IVR) system, such as that you encounter when calling customer service hotlines, to automate call routing.

Read More about a PBX Network

How Does a PBX System Work?

Say, for example, an enterprise has five departments. Instead of getting five different phone lines from a telephone company, the enterprise would only need one and set up a PBX network, enabling it to assign internal phone lines to each department.

Think of a PBX network as a secretary who supports multiple office managers. When an outsider calls the office, the secretary answers and forwards the call to the right person. In a PBX system, the PBX box is the secretary. It has telephony switches to distribute calls to different phones within the company. Outgoing calls also go through this box.

PBX Network

What Are the Functions of a PBX Network?

These are the primary call-processing functions of a PBX network.

  • Enables employees to have local numbers of a particular city regardless of their location
  • Allows employees in virtual offices worldwide to call each other and join conference calls through internal extensions
  • Lets employees receive incoming calls and make outgoing calls
  • Maintains the connection of any call as long as the user requires
  • Provides analytics and accounting data to the company

PBX systems have evolved over the years. From catering to companies with a central location, a PBX network can now connect users in different physical locations.

What Are the Parts of a PBX Network?

A PBX network comprises hardware and software components, including the following:

  • PBX box that contains switches and a network of lines
  • Multiple phone lines that go to the PBX box
  • A computer where the call switching management happens
  • Unified communication (UC) device that combines a company’s different communication channels
  • Phone handsets
  • Telephony application server that handles call waiting, call forwarding, conference calling, and other call-processing services

The parts of a PBX network differ depending on the type of PBX system used.

What Are the Types of PBX Systems?

There are three types of PBX systems:

  • analog, 
  • digital, 
  • cloud-hosted.


Analog PBX systems are the traditional type, typically connected to the public telephone network. Communications over analog PBX go through copper wiring and, thus, can only handle voice calls.


On the other hand, a digital PBX system can send voice and video calls over the Internet. A digital PBX system is also called a “voice-over-Internet Protocol (VoIP) phone system.”


Lastly, a cloud-hosted PBX network is similar to a digital PBX system since it uses the Internet. However, its software is hosted on the cloud and not on premises.

What Are the Benefits of Using a PBX Network?

Cloud or hosted PBX is the most common PBX network companies use today. Among its advantages are:

  • Scalability: Hosted PBX can support an unlimited number of users, although the cost may go up as the number of users increases. However, adding users is easy and fast, without the need for additional equipment.
  • Not dependent on location: Employees can make calls from and to anywhere in the world.
  • Customization: Companies can add or remove features as needed.
  • Low cost: Compared to on-premises digital PBX, implementing a cloud PBX network does not require a huge budget for equipment or maintenance since these are the responsibility of the cloud PBX provider.
  • Immediate implementation: Cloud PBX is quick to implement since you don’t need to set up the network in your physical location.
  • Technical support: Cloud-based PBX subscriptions also come with customer support that can help with implementation, updates, maintenance, and other issues.

Can a PBX System Get Hacked?

Now that you know what a PBX network is, the next concern would be its security. Like other forms of technology, attackers can target PBX systems. They can hack into a PBX network to commit fraud or hijack business phone calls to spy on the company. In other cases, companies find a massive volume of unauthorized international call charges.

Key Takeaways

  • PBX stands for “Private Branch Exchange.”
  • A PBX network is a telephone system implemented within a company that allows employees to receive and make calls.
  • A PBX network works like a telephone operator who forwards calls to the right person.
  • Aside from allowing internal communication, PBX provides companies with analytical and accounting data.
  • There are three types of PBX systems—analog, digital, and cloud-hosted.
  • Most companies use cloud-hosted PBX, which is more scalable, cheaper, and easier to implement than on-premises digital PBX.