Private Branch Exchange (PBX)

Last Edited



Definition of Private Branch Exchange (PBX) in The Network Encyclopedia.

What is Private Branch Exchange (PBX)?

Private Branch Exchange, also known as PBX, is a telephone switch at the customer premises that supports multiple independent telephone extensions. Private Branch Exchanges (PBXs), which are installed by a telco, save businesses the cost of supplying an individual local loop connection for each employee because employees can share external trunk line connections. The PBX provides connectivity between the client’s private telephone system that it supports, and the telco’s public trunk lines. In Europe, a PBX is known as a Private Automatic Branch Exchange (PABX).


How It Works

PBXs were originally switch consoles controlled by human operators, who would plug and unplug patch cords to establish connections for customers. The modern electronic PBX (also known simply as a switch) is a solid-state device that essentially establishes a private switching system that mimics the functions of a telco’s much larger central office (CO) switching facility. PBXs allow businesses to have better control of their own telecommunications equipment, and they reduce costs by more effectively routing local telephone traffic.

Typically, a PBX is leased and installed in the main equipment room of a building or campus by a telco or other service provider. It handles all calls initiated and received in the building. If an outgoing call is directed to another line on the PBX, the PBX routes the call directly to its destination instead of forwarding it to the local CO. Outgoing calls directed to destinations outside the PBX are routed to the CO for handling.

A modern digital PBX can handle data, fax, and other forms of traffic in addition to voice traffic. Telephones and other devices are connected by individual circuits directly to the PBX unit, while trunk lines coming in from the outside terminate at a multitrunk channel band (MCB) unit. The MCB interfaces with the main distribution frame (MDF), which provides the individual circuits that connect the outside world to the PBX unit. The more circuits that the MDF creates from the trunk lines, the more simultaneous outgoing calls can be initiated and received by users of the PBX system. Add-ons for the PBX unit can include call management systems (CMS’s), which provide call notification and control services; call accounting services; and modem pools for remote dial-up access.

PBX - Private Branch Exchange
PBX – Private Branch Exchange

PBX switches come in various sizes. The smallest is a 3-by-8 switch that supports three business lines and eight extension lines. This configuration permits eight phones to be connected, but only three of them can make or receive calls at a time.

PBXs support a number of features, including the following:

  • Direct Inward Dialing (DID): A form of call routing that allows outside users to dial directly to any of the extensions 
  • Direct Outward Dialing (DOD): A form of call routing that allows extensions to dial directly to any outside phone number 
  • Station-to-Station Dialing (SSD): Allows any extension to call any other extension without using a business line 

Most modern PBXs support digital phone extensions and T1 or multi-rate Integrated Services Digital Network (ISDN) for their telco connection. PBX boards can also be installed in servers to support computer-telephony integration (CTI). Many products and configurations are available.

Remote PBX

An alternative to installing a PBX at the customer premises is to lease a Centrex service from the telco’s CO. This service offers similar features to a PBX but from a remote location, and it is managed remotely by the telco.