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What is a PBX Phone System?

Source: - Lic#79560792 ID#27446420

Looking for an upgrade for your business phone system? One that reduces calling costs but enables better and reliable connection? A private branch exchange or PBX system works alongside your current telephone network. However, it has the potential to give you access to high-quality voice and video communication. In this post, we explain what a PBX phone system is and how it can benefit your business.

Private Branch Exchange (PBX): Definition & Guide

A private branch exchange is a telephony solution that enables communication between users of a private network. A PBX system works with your business’ telephone network and handles forwarding and routing features for calls. Companies use private branch exchange systems to reduce monthly phone bills as it operates internally and uses fewer phone lines.

Most PBX providers will offer you communication features along with the system. These features include voicemail, cloud IVR, custom messages, call transfer, and extensions.

Before these systems worked only through plain old telephone service lines. However, now, you can connect your PBX with VoIP technology, also called IP PBX. Voice over IP technology uses the internet instead of analog phone lines to make and answer calls. Both of these systems together will give you the ability to use SIP trunking as a feature that offers voice and video calling at inexpensive rates.

Setting up a private branch exchange system, however, needs expertise. To install PBX for your office, you will need specific hardware, physical space, and an IT team for maintenance. Costs for these can increase quickly. Thankfully, cloud PBX functions as a cost-effective solution.

4 Reasons for Businesses to Use a PBX System

So, why should your business consider getting a private branch exchange phone system? There are many benefits to using a PBX system, which include:

  1. Running a call center: PBX systems can hold inbound and outbound calls in a queue and transfer them to the right department when the time comes.
  2. Connecting multiple locations: a PBX system can route users to employees, agents, or departments in another office location, enabling team collaboration.
  3. Transferring calls through extensions: calls can be transferred quickly and with ease, without the worry of calls being dropped.
  4. Custom call management: Handle and route calls according to your needs and desires by setting rules within the system.

With advancements in telecommunications, there are a few different private branch exchange systems to choose from. The most common are hosted/cloud and on-premise/IP PBX. Let’s delve into these types first.

Understanding the Difference Between PBX, EPABX, and IP PBX

There are many terms for PBX going around: PBX, IP PBX, PMBX, PABX, EPABX, to name a few. And it is not always clear what each of these terms means or which type of phone system is right for your business. Let’s try to break this down so you can make a more informed decision when it comes to your business PBX system.

What is EPABX?

Electronic Private Automatic Branch Exchange — also known as PABX and EPABX — is a PBX system or private telephone network used for internal and external business communication. Employees share limited resources and use a single phone line for business-related communication. This helps reduce phone system expenses.

The main difference between PBX and EPABX systems lies in who operates the system. PBX systems used to be (and in some cases, still are) human-operated or manual systems and are also known as PBMX.

PABX systems, on the other hand, use computers to automate the switching process within the system, also known as Private Automatic Branch Exchange. EPABX systems don’t need an operator and instead use a computer to manage and transfer calls effectively.

pbx flow chart

IP PBX: What is it and How Does it Work?

IP PBX takes the private branch exchange system to the next level by using VoIP technology and cloud communications. IP PBX phone systems use VoIP technology to transfer or direct calls from one end to another by converting analog voice signals into digital signals. The VoIP provider manages the initiation (beginning) and termination (end) of each call.

IP PBX uses SIP technology, the standard for VoIP phone systems. Because of this, your business can make use of SIP trunking to utilize multiple voice channels or SIP channels without purchasing separate lines. And since SIP trunks are location-agnostic and highly scalable, you can set up or move offices or work remotely, as and when needed within minutes.

With IP PBX, you can expect:

  1. Low communication costs — This PBX system is inexpensive compared to analog alternatives. You can choose between different plans (metered and unmetered) of SIP trunking services to find one that works for your business needs.
  2. High scalability — Add/remove users and lines as needed without having to change your system or plan.
  3. Low equipment costs — Use your existing hardware and equipment. No need to teach or train employees in using new systems.
  4. Cloud reliability — By using a cloud-based system, when your PBX system fail, the cloud system’s settings will automatically route calls to predetermined locations or lines to ensure uninterrupted service.

On-Premise vs Cloud PBX

There are two different types of private branch exchange systems: Cloud PBX and On-Premise PBX. And choosing between these two phone systems depends on a few factors:

  • What do you need from your phone system?
  • Do you want to connect multiple office locations through the system?
  • What communication features do you need?
  • What is your budget?
  • Do you have or need to hire an IT team?

The answers to these questions can help you determine which PBX phone system is right for you.

On-Premise Private Branch Exchange System

An IP or on-premise PBX system refers to a system that is installed within the office, is IP-ready, and is handled and maintained by you. You will need an experienced IT team to handle such a system. If you want a system that you can control and manage and you have the budget for it, then an on-premise system may be your solution.

You can even choose to combine your PBX with VoIP tech and run an IP-PBX system instead. This way you can make and receive calls through the internet instead of using analog phone lines. Doing so results in better phone quality and access to VoIP features such as call forwarding, transfer, etc.

Cloud PBX System

A cloud PBX is what it sounds like: a PBX system that works over the cloud. This means that it does not need a physical space in your office. Other terms for cloud PBX include hosted or virtual PBX systems. A hosted or cloud PBX system works similarly to an on-premise system, except that it is operated by your provider.

Therefore, you do not need to worry about installation and maintenance costs or even hiring an IT team to manage the system. In fact, you simply sign up for the service, complete the minor set-up, and start using it.  They take care of the system and all you need to do is use it. One factor to note is that your business will be reliant on your provider and won’t have as much control as with an on-premise system.

With hosted private branch exchange, calls made are routed to the provider and then the destination. Cloud PBX systems are VoIP-based systems that help you take advantage of cloud communication features such as call forwarding, recording, IVR systems, outbound calling, advanced routing, and more.

Choosing Between Cloud PBX vs On-Premise PBX

So, what are the main differences between these 2 types of private branch exchange phone systems?

On-Premise Cloud
Customizable Customizable
Operated on-site by you Hosted by your provider
May use VoIP tech Uses VoIP tech; Needs a broadband connection
Low monthly costs; High upfront costs Low monthly costs; No upfront costs
Controlled and managed fully by you Little to no control over how it operates
Limited calling features Variety of calling features
Physical space required; closet or room No physical space required
Installation and regular maintenance required No installation or maintenance needed
Costly maintenance No maintenance costs
Experienced IT team needed No professional IT experience needed
Limited scalability On-demand scalability
Can handle SIP trunking for high-definition voice and video calling Can handle SIP trunking for high-definition voice and video calling

The bottom line is that if you want a system that is wholly controlled and managed by your in-house IT team then an IP-PBX is the choice for you. However, if you don’t want to worry about the hassle of running and maintaining your phone system, then go with the cloud.

Get a PBX System for Your Business

Here at United World Telecom, we can help get you set up with a private branch exchange system that makes call management simple and efficient. You can sign up on our website or speak with our experts to learn more! Call us at 1 (877) 898 8646 to see how we can assist your specific business.

Hosted PBX versus SIP Trunking: What’s the Difference?

Source: - Lic#27766347 ID#27446420

When switching to a cloud phone system for your company’s communications, owners often have to decide between a hosted PBX and SIP trunking. Here we will discuss what these two types of service are so you can make the right decision based on your needs.

Hosted PBX versus SIP Trunking: Key Differences

In order to decide whether your company can benefit from a hosted PBX  or SIP trunking, it is important to first understand what each of these services is capable of achieving. Other factors to consider are:

  • Costs
  • Level of expertise required
  • Company size and calling (or call management) requirements
  • Security needs

But first, let’s look at these services and their benefits individually.

What is a Hosted PBX?

If you want a system handled and managed offsite, then a hosted PBX service will be more in line with your needs. Other terms for hosted PBX are virtual PBX, cloud PBX, and cloud phone system. A hosted PBX service is a service managed by a third-party provider and connects to a public switched telephone network (PSTN).

Benefits of Hosted PBX

Therefore, subscribing to a hosted PBX service means that your company does not have to buy or maintain any equipment or software to utilize the service. And so, you do not have to worry about high setup or maintenance fees. Additionally, you do not need to hire experienced IT professionals to manage the system.

A hosted PBX service will give you the opportunity to utilize Voice over IP services such as:

  • Call management tools to manage and route calls
  • Call transfer
  • Voicemail
  • Call recording
  • Interactive voice response (IVR system)

What is SIP Trunking?

SIP trunking also uses VoIP technology. SIP connects your existing PBX to the internet and enables the sharing of multimedia files such as voice, video, and text. Therefore, to use SIP trunking technology, you need to have an on-premise PBX system and a skilled and experienced in-house IT team to manage it.

SIP trunking

Benefits of Using SIP Trunks

SIP technology is growing more and more popular with businesses because of the many advantages of using such a system. Here are a few benefits of SIP trunking:

SIP trunks replace traditional phone lines by helping you make and answer calls over virtual lines instead. This enables long-distance and international calling at cheaper rates. Therefore, SIP technology is often preferred for its affordability.

Furthermore, you do not need to subscribe to 4-5 different services to handle your office’s communications. SIP trunks allow for transmission for various types of data all in one place, making business communications easy to manage. This is also helpful in increasing overall office productivity and efficiency as employees spend less time learning new services and more time providing better customer support.

Key Differences Between Hosted PBX and SIP Trunking

Now that we have a better understanding of what each service means, let’s look at the key differences between having a hosted PBX system and SIP trunking as part of your office phone system:

Hosted PBX SIP Trunking
1) Setup Costs Low Low, if you own PBX equipment on-premise
2) Ongoing Costs $15-$50 per phone line per month $20-$50 per user per month
3) Maintenance and Expertise Handled by your provider Handled by your in-house IT staff
4) Expertise Required No, handled by the provider In-house IT staff must be experienced
5) Call quality and volume Great for low call volume Great for a large workforce and a high call volume
6) Flexibility Geographically flexible and self-reliant Depends on PBX program licensing and support
7) Company size and type Recommended for companies with <20 employees Recommended for companies with >20 employees
8) Security Depends on the provider’s standards More secure infrastructure

Choosing a Phone System

Deciding on a type of phone system for your business can be overwhelming. To simplify the process, pay attention to what your business needs and what your budget allows. For example, can you afford a skilled in-house IT team or do you want your provider to handle maintenance? Do you need a system that supports a low or high call volume and traffic? And so on. Determining your business’ needs will help you make a better choice. To get SIP trunks and PBX, call United World Telecom and speak with an expert.