Virtual Telephone

A business telephone system is any of a range of a multiline telephone systems typically used in business environments, encompassing systems ranging from small key systems to large scale private branch exchanges.

A business telephone system differs from simply using a telephone with multiple lines in that the lines used are accessible from multiple telephones, or “stations” in the system, and that such a system will often provide additional features related to call handling. Business telephone systems are often broadly classified into “key systems”, “hybrid systems”, and “private branch exchanges”.

A key system[1] was originally distinguished from a private branch exchange (PBX) in that it allowed the station user to see and control the calls directly, manually, using lighted line buttons, while a private branch exchange operated in a manner similar to the public telephone system, in the calls were routed to the correct destination by being dialed directly. Technologically, private branch exchanges share lineage with central office telephone systems, and in larger or more complex systems, may rival a central office in capacity and features.


One of the latest trends in PBX development is the VoIP PBX, also known as an IP-PBX or IPBX, which uses the Internet Protocol to carry calls. Most modern PBXs support VoIP. ISDN PBX systems also replaced some traditional PBXs in the 1990s, as ISDN offers features such as conference calling, call forwarding, and programmable caller ID. However, recent open source projects combined with cheap modern hardware are sharply reducing the cost of PBX ownership.

For some users, the private branch exchange has gone full circle as a term. Originally having started as an organization’s manual switchboard or attendant console operated by a telephone operator or just simply the operator, they have evolved into VoIP centres that are hosted by the operators or even hardware manufacturers. These modern IP Centrex systems offer essentially the same service, but they have moved so far from the original concept of the PBX that the term hardly applies at all.

Even though VoIP gets a great deal of press, the old circuit switched network is alive and well, and the already bought PBX’s are very competitive in services with modern IP Centrexes. Currently, there are four distinct scenarios in use:

* PBX (Private and Circuit Switched)
* Hosted/Virtual PBX (Hosted and Circuit Switched) or traditional Centrex
* IP PBX (Private and Packet Switched)
* IP Centrex or Hosted/Virtual IP (Hosted and Packet Switched)

Since in reality people want to call from the IP side to the circuit switched PSTN (SS7/ISUP), the hosted solutions usually have to maneuver in both realms in one way or another. The distinctions are seldom visible to the end user.

Home and small business usage

Historically, the expense of full-fledged PBX systems has put them out of reach of small businesses and individuals. However, since the 1990s many small, consumer-grade and consumer-size PBXs have become available. These systems are not comparable in size, robustness or flexibility to commercial-grade PBXs, but still provide many features.

The first consumer PBX systems used analog (POTS) telephone lines, typically supporting four private analog and one public analog line. They are the size of a small cigar box. In Europe these systems for analog phones were followed by consumer-grade PBXs for ISDN. Using small PBXs for ISDN is a logical step, since the ISDN basic rate interface provides two logical phone lines (via two ISDN B channels) which can be used in parallel. Small, entry-level systems are also extremely cheap (e.g. US$100). With the adoption of VoIP by consumers, consumer VoIP PBXs have appeared, with PBX functions becoming simple additional software features of consumer-grade routers and switches.

Open source projects have provided PBX-style features since the 1990s. These projects provide extreme flexibility and features, including the means to inspect and change the inner working of a PBX. Lowered entry barriers for new manufacturers created business opportunities for newcomers.