PABX vs PBX: Key Difference – A Complete Review

Communication technology has significantly evolved over the years and is constantly being improved every day.

“The writer August E. Grant and Jennifer H. Meadows,” said in their book, “Communication Technology Update and Fundamentals” that “Effective communication technology is critical for businesses to connect with customers and build lasting relationships.”

If you are someone who is looking for the most suitable communication solution for business communications, this is the right blog for you.

Here you will get knowledge and insight into the latest communication technology, PABX vs PBX: Key Difference, and many more.

What Is PABX?

PABX (Private Automatic Branch Exchange) is an automated phone system used by businesses to manage both internal and external communications. It is mainly used by large businesses to facilitate calls between internal departments of the company as well as enable calls to the external public telephone networks. 

How Does a PABX System Work?

PABX system uses Voice over Internet Protocol (VoIP) to connect public telephone networks and private phones. This enables businesses to send and receive messages as data packets during external communications.

The key components of a PABX system are:

• Extensions: These are the internal company phone lines and short phone numbers assigned to each employee and department of the organization.
• Trunk lines: These are the external connections to the public telephone network(PSTN) or VoIP provider.
• Switching system: This system is responsible for call routing.
• Control panel: This is software for managing extensions, lines, and calls.

Here is how a PABX operates step-by-step:

1. Incoming call reception

When a PABX system receives an incoming call, it identifies the caller ID and then uses predefined rules or IVR to handle the caller’s needs. If the call is not answered, the PABX system sends it to voicemail or redirects it to another extension.

2. Call routing

The call is routed to an appropriate department based on the caller’s input. In the case of internal calls, calls are automatically connected by the PABX systems since calls made within the organization by dialing short extension numbers do not need an external line.

3. Call switching

PABX system functions as a switchboard, automatically routing calls between internal and external phone lines, avoiding the need for manual operational assistance.

4. External calling

When an employee dials a phone number, PABX determines whether the number is internal or external. If the call is external, PABX enables a trunk line access by connecting the internal extension to an available external trunk line, i.e., a phone line that connects to a public telephone network or VoIP provider. 

5. Data transmission

In modern hosted PABX systems, calls are transmitted over the internet as data packets rather than through traditional phone lines. This saves a lot of costs for long-distance calls.

6. Scalability and integration

PABX systems can easily be scaled up and down based on growing business needs. Modern PABX systems are integrable with CRM softwares and other business tools and provide advanced features such as call logging, analytics, voicemail-to-email, conference calling, and call forwarding.

What are The Different Types of PABX?

There exist multiple types of PABX systems, each with its own characteristics. Each type of PABX has its own use depending upon the size of the business, budget, and specific communication needs.

1. Digital PABX

A digital PABX is more advanced compared to an analog PABX that uses phone lines within an organization. A digital PABX converts analog signals into digital signals for data transmission. It offers the use of multiple phone lines, call routing options, and provides improved voice quality during calls.

It is best for small-sized businesses in transition as well as medium-sized businesses who are looking to improve their business communication.

2. IP PABX

IP (Internet Protocol) PABX is the most commonly used type of PABX. It uses VoIP technology to manage enterprise communications. This kind of PABX is most suitable for large companies with advanced communication needs and remote employees.

It is easily scalable and highly cost-effective for long-distance calls. It is also easily integrable into existing internal systems such as CRM and comes with modern features such as voicemail-to-email, remote extensions, video conferencing, etc.

3. Hosted PABX

Hosted PABX, also known as cloud PABX, is a cloud-based telephony solution where PABX is hosted on the cloud through a third-party service provider. It is great for businesses of all sizes and especially for those looking to avoid the need for physical hardware infrastructure.

It stores all call data on the cloud. The software is updated by the provider. It requires very little maintenance and can be accessed from anywhere.

4. Hybrid PABX

A hybrid PABX combines the features of analog, digital, and IP PABX systems, thus allowing businesses to use traditional phone lines and modern VoIP technology. It is suitable for companies that require the use of both new and traditional technologies.

It supports multiple communication methods and provides great flexibility due to easy customization.

Top Features of PABX Systems

1. Automated call routing

PABX provides a menu system for callers to interact with, guiding them to the services they require. Then, it automatically directs incoming calls to appropriate extensions and departments.

2. Advanced features

If a caller is unable to connect with a live agent or desired professional, PABX allows callers to leave a voicemail, which ensures a follow-up response from the company. The voice mails are automatically converted to emails for customer service agents to address.

It facilitates call parking, allowing agents to put one call on hold and address another call at the same time. 

PABX also allows multiple users to make conference calls for meetings. 

3. Highly secure

PABX systems are highly secured compared to PBX systems. The “Do Not Disturb” functionality directs incoming calls to only a specific extension. This enables agents to take breaks and prevent fraud calls.

4. Highly efficient and reliable

PABX is designed such that all phones can ring simultaneously. Further, when a user dials a busy line, it receives a ring back as soon as the previous call ends.

PABX also allows users to directly connect with the desired destination through extension numbers, instead of having to go through IVR systems.

What Is PBX?

PBX (Private Branch Exchange) is an automated telephone network used within an organization to manage incoming and outgoing calls. It is not fully automated as a PABX but is rather manually or semi-automated.

PBX facilitates communications through the use of fewer phone lines within the organizational capacity without having to go through a public telephone network.

How Does a PBX System Work?

A PBX system works as a centralized telephone network within an organization. It is not fully automated and thus requires human intervention of telephone operators.

The key components of a PBX system are:

• Extensions
• Trunk lines
• Switching systems
• Control software

Here is how a PBX operates step-by-step:

1. Incoming and outgoing calls

Initially, an incoming call gets picked up by the PBX system. If the call is made to an external number, the PBX checks whether the call is internal or external. 

2. Call routing

The PBX system checks the dialed number and directs the caller to the specific department based on some pre-set routing rules.

In the case of internal calls, the calls get routed to the department of the dialed extension numbers. For external calls, PBX connects the internal extension line with an available external trunk line.

3. Call switching

PBX connects calls between internal users and external phone lines. It also allows efficient use of shared phone lines by allowing multiple calls to be managed at the same time.

4. Scalability and integration

PBX systems are highly scalable and support new extensions in accordance with the growing business needs. Further, its advanced features, such as automated attendance, call transfer, call forwarding, conference calling, etc., can also be easily integrated with internal business communication systems.

What are the different types of PBX?

PBX systems come in several types. Some most commonly used are: 

1. Hosted PBX

Hosted PBX, also known as Cloud PBX, is the type of PBX infrastructure where PBX services and functionalities are hosted on a cloud or third-party service platform. It requires minimal maintenance and is highly cost-effective.

It is most suitable for startups and small and medium-sized businesses. It provides features such as cloud storage, call analytics, and voicemail-to-email. It is easily scalable and accessible from any remote location.

2. Virtual PBX

Virtual PBX is similar to Hosted PBX but operates entirely online with zero on-premise hardware except for phones and computers. It is most suitable for organizations with low call volumes, such as start-ups, small business teams, and freelancers. 

It is extremely flexible and mobile-friendly as it supports mobile devices and softphones in addition to computers. It also has low upfront costs.

3. Hybrid PBX

A Hybrid PBX is a combination of a traditional PBX and an IP PBX. It supports both analog calls made through traditional phone lines as well as calls made with new VoIP technology. 

It is highly ideal for businesses in transition who want to add VoIP services to their communication infrastructure while still maintaining and using their existing infrastructure. 

4. Mobile PBX

Mobile PBX uses mobile technology to incorporate PBX systems into mobile devices, allowing inbound and outbound calls to be handled through smartphones. It is primarily used by companies that operate remotely or employees who are field workers and need to stay connected to clients and their employers via mobile devices.

It is ideal for small businesses as it does not require any extensive hardware. All features, such as call transfer, call forwarding, conferencing, etc., are accessible via mobile apps.

Top Features of PBX Systems

1. Call routing and switching

PBX systems are designed to auto-attend calls and queue them in case of high incoming call traffic. 

2. Modern features

PBX systems facilitate the transfer of active calls to appropriate departments and extensions. It also enables users to receive and store voicemail messages.

It enables conference calling, making it easy for multiple employees to attend meetings at the same time. 

3. Call music and greeting

Companies can customize PBX systems to play music or greet customers with important updates, offers, and promotions while on hold.

4. Analytics and reporting

Modern PBX helps optimize and improve business communications by enabling analysis and reporting of call performance, call volume, call activity, agent performance, and so on.

PABX vs PBX: What’s the Difference?

The differences between PABX and PBX are as follows:

Final Words

Even with the digitization of almost all aspects of any industry, businesses still use traditional phone systems. Both PBX and PABX are widely used depending on the business needs and budget.

Larger organizations mainly use PBX due to its advanced features, scalability, and flexibility. In contrast, PABX is mainly used by businesses looking to fully automate their call management and enhance enterprise communications.

Effective and efficient use of both PABX and PBX systems can help businesses save time and money on communication infrastructures and enhance quality communications. 

FAQs

1. Is PABX the same as PBX?

No, PABX is not the same as PBX. PABX is fully automated and more efficient and scalable compared to PBX. PBX requires more manual intervention for call routing.

2. How much does a PBX cost?

The cost of a PBX system depends on:

• The type of PBX
• The size of the business
• Number of users
• Features selected

However, looking at the current market, the price can range from $1,000 to $15,000 for on-premise infrastructural setups and $20 to $60 per user per month for hosted cloud solutions.

3. What is VoIP, exactly?

VoIP refers to Voice over Internet Protocol, which is a technology that enables communication over the Internet (cloud) rather than through traditional telephone lines. It converts the analog voice signals into digital data packets during transmission.

4. What’s PSTN, and what does it have to do with PBX?

PSTN refers to the Public Switched Telephone Network. It uses telephone lines, optic fiber cables, and switching centers for traditional voice communications. PSTN and PBX are two different types of voice-switching systems.

However, PBX systems use trunk lines from the PSTN to connect multiple internal users to the public telephone network, enabling the simultaneous use of multiple phone lines.

5. What is the difference between a key telephone system and a PBX?

A key telephone system (KTS) is a simpler and manual call management system suited for small businesses. Whereas a PBX (Private Branch Exchange) system is more advanced and automated. It is mainly designed for large organizations with several communication needs.

6. What are the key areas of application of a PBX system?

PBX systems are mainly used in customer support centers, remote work offices, healthcare, education, sales, marketing, and so on.