A PBX (private branch exchange) is a telephone system within an enterprise that switches calls between enterprise users on local lines while allowing all users to share a certain number of external phone lines. The main purpose of a PBX is to save the cost of requiring a line for each user to the telephone company’s central office.

The PBX is owned and operated by the enterprise rather than the telephone company (which may be a supplier or service provider, however). Private branch exchanges used analog technology originally. Today, PBXs use digital technology (digital signals are converted to analog for outside calls on the local loop using plain old telephone service (POTS ).

A PBX includes:

• Telephone trunk (multiple phone) lines that terminate at the PBX
• A computer with memory that manages the switching of the calls within the PBX and in and out of it
• The network of lines within the PBX
• A console or switchboard for a human operator (optional)

In some situations, alternatives to a PBX include centrex service (in which a pool of lines are rented at the phone company’s central office), key telephone systems, and, for very small enterprises, primary rate Integrated Services Digital Network (ISDN).

Lucent Technologies, Northern Telecom (NORTEL), Rolm/Siemens, NEC, GTE, Intecom, Fujitsu, Hitachi and Mitel are among the larger manufacturers of PBXs.

See also: IP PBX, private automatic branch exchange (PABX), Direct Outward Dialing (DOD), Direct Inward Dialing (DID)