What is PABX?

Originally an organization's manual switchboard (operated
by a person plugging cables into sockets) was known as a PMBX (Private
Manual Branch eXchange). These were gradually replaced by automated
electromechanical and then electronic switching systems, called PABXs
(Private Automatic Branch eXchange). As PMBXes are almost unheard of, the
terms PABX and PBX have become synonymous.

Using a PABX saves connecting all of a business's telephone sets separately
to the public telephone network (PSTN or ISDN). Such a set-up would require
every set to have its own line (usually with a monthly recurring line
charge), and "internal" calls would have to be routed out of the building to
a central switch, only to come back in again.

In addition to telephone sets, fax machines, modems and many other
communication devices can be connected to a PABX as well (although the PABX
may degrade line quality for modems). For this reason, all such devices are
generally referred to as extensions.

The PABX equipment is typically installed at a business's premises, and
connects calls between the telephones installed there. In addition, a
limited number of outside lines (called trunk lines) are usually available
for making and receiving calls external to the site (i.e. to the public
telephone network). Companies with multiple sites can connect their PABXs
together with trunk lines. PABX-like services can also be provided by
equipment located off site at a central provider, delivering services over
the public telephone network. This is known as a hosted PABX. For example,
most local phone companies offer a Centrex service in which each extension
has a trunk line connected to the telephone company's Central Office. Other
companies offer similar services.

PABXs are distinguished from smaller "key systems" by the fact that
external lines are not normally indicated or selectable at an individual
extension. From a user's point of view calls on a key system are made by
selecting a specific outgoing line and dialing the external number; calls on
a PABX are made by dialing 9 (or 0 in some systems) followed by the external
number; an outgoing trunk line is automatically selected upon which to
complete the call.

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