A PBX (Private Branch Exchange) is a telephone exchange system installed within a business or organization. It provides functions including external/internal line connection, extension-to-extension calls, transfers, hold, and conference calls, serving as the core of corporate telephone infrastructure. Without a PBX, each employee would need their own external line, resulting in enormous costs.
The basic operation of a PBX is receiving incoming external calls and connecting them to the appropriate extension, and connecting outgoing extension calls to external lines. Combined with dial-in, it enables direct department numbers. Combined with IVR, automated voice routing becomes possible. PBX systems equipped with ACD are essential for call centers, automatically distributing calls to operators based on wait time and skills.
PBX systems fall into three main categories. First, traditional on-premises PBX: dedicated hardware installed in the office, connected to analog or ISDN lines. Initial investment ranges from hundreds of thousands to millions of yen, but call quality is stable and unaffected by internet outages. Second, IP-PBX: uses VoIP technology, connecting IP phones via LAN cables. Existing LAN infrastructure can be reused, reducing wiring costs, and inter-office extension calls become free. Third, cloud PBX: no on-site hardware, used as a cloud service. Low initial investment, with the key advantage of using smartphones as extension phones even in remote work environments.
Selection criteria vary by company size, number of locations, and work style. Small offices under 10 employees find cloud PBX convenient, while large sites over 100 employees need the stability of on-premises or IP-PBX. Companies with multiple locations benefit from IP-PBX or cloud PBX that can eliminate inter-office call charges. Review selection points in the business phone number guide.