What is a PBX? Private Branch Exchange explained

Who this guide is for

Audience: Business decision-makers evaluating phone system architecture.

Understand how VoIP calling works — SIP, PBX, codecs, trunking, DID numbers, STIR/SHAKEN, and the protocols behind business phone systems.

Use this guide when you want the setup to be correct the first time and easy for another admin, manager, or supervisor to verify later.

What this workflow helps you accomplish

A PBX (Private Branch Exchange) is a private telephone network that manages internal call routing between users within an organisation and connects external calls through trunk lines to the PSTN. Modern PBX systems can be on-premise hardware or cloud-hosted software.

This workflow matters because numbers, routing, access, and reporting in CallOrbit are connected. Skipping one setup detail usually creates avoidable support work later.

• Step 1: Understand the core PBX function: a PBX routes incoming calls to the correct internal extension, allows internal calls between employees without using external lines, and manages how many outside lines are shared across the organisation through trunk connections.
• Step 2: Compare on-premise PBX — dedicated server hardware in your office that requires IT maintenance, SIP trunk connections, and physical phone wiring — versus hosted PBX (cloud) where the provider runs all the infrastructure and your team connects via internet.
• Step 3: Evaluate PBX features: auto attendant menus, extension dialling, call forwarding, hunt groups, voicemail boxes, call parking, call transfer, conferencing, and music-on-hold. These are standard on any business PBX regardless of deployment model.
• Step 4: Know the scale limit: traditional on-premise PBX hardware caps concurrent calls based on the number of trunk lines installed. A hosted PBX scales linearly because the provider handles capacity allocation across their infrastructure.
• Step 5: Plan your PBX migration: replacing an existing PBX involves porting existing phone numbers, reprogramming auto attendants and IVR menus, reconfiguring SIP trunks, testing extension routing, and retraining staff on any new phone features.

Setup checklist

• Understand the core PBX function: a PBX routes incoming calls to the correct internal extension, allows internal calls between employees without using external lines, and manages how many outside lines are shared across the organisation through trunk connections.
• Compare on-premise PBX — dedicated server hardware in your office that requires IT maintenance, SIP trunk connections, and physical phone wiring — versus hosted PBX (cloud) where the provider runs all the infrastructure and your team connects via internet.
• Evaluate PBX features: auto attendant menus, extension dialling, call forwarding, hunt groups, voicemail boxes, call parking, call transfer, conferencing, and music-on-hold. These are standard on any business PBX regardless of deployment model.
• Know the scale limit: traditional on-premise PBX hardware caps concurrent calls based on the number of trunk lines installed. A hosted PBX scales linearly because the provider handles capacity allocation across their infrastructure.
• Plan your PBX migration: replacing an existing PBX involves porting existing phone numbers, reprogramming auto attendants and IVR menus, reconfiguring SIP trunks, testing extension routing, and retraining staff on any new phone features.

Operational follow-up

After you complete this flow, confirm the live experience from both the agent and customer side so ownership, routing, permissions, and reporting all match what the workspace expects.

If your team is rolling this out across multiple users, queues, or phone numbers, pair this article with the broader knowledge base and the relevant routing or numbers guides to keep deployment consistent.

• What is the CallOrbit Knowledge Base for? — It is the public help hub for how CallOrbit works, covering numbers, webphone setup, SIP, extensions, routing, users, roles, and billing basics.
• Can customers read this without signing in? — Yes. The Knowledge Base now lives on a public route so customers can read setup guidance before or after they enter the portal.
• Does the portal still have its own Knowledge Base page? — No. The signed-in portal navigation no longer carries a separate Knowledge Base page, and the old portal path now redirects to this public version.
• What is VoIP and how does it work? — VoIP (Voice over Internet Protocol) converts analogue voice signals into digital packets and transmits them over IP networks. Unlike traditional PSTN phone lines that require dedicated copper wiring per line, VoIP calls use your existing internet connection, which makes them cheaper, more flexible, and easier to scale.
• What is SIP trunking? — SIP trunking is a virtual connection that replaces traditional analogue phone lines or PRI circuits. A SIP trunk carries multiple concurrent voice channels over a single IP connection to your PBX or phone system, eliminating per-line hardware costs and monthly line rental fees.
• What is the difference between hosted PBX and cloud PBX? — Hosted PBX runs on dedicated virtual infrastructure managed by a provider, while cloud PBX uses shared multi-tenant cloud infrastructure. Hosted PBX suits organisations needing custom configuration and predictable pricing. Cloud PBX is better for instant scalability and per-user monthly billing.
• What is a DID number? — A DID (Direct Inward Dialling) number is a virtual phone number that routes directly to a specific extension, IVR menu, queue, or user within a phone system without an operator. DIDs decouple the phone number from the physical phone line, so you can have hundreds of numbers routed through a single SIP trunk.
• What are G.711, Opus, and G.729 codecs used for? — These are VoIP codecs that convert voice into digital data. G.711 uses 64 Kbps for toll-grade quality and is the PSTN standard. Opus uses 6-510 Kbps and adjusts to network conditions. G.729 uses 8 Kbps for bandwidth-constrained links. The right codec depends on your available bandwidth and call quality requirements.

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