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Introduction to Telecoms Systems

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Introduction to Telecoms Systems

Many businesses rely upon fully-featured business telecoms systems. At the centre of many such networks is a Private Branch Exchange (PBX) system. PBX systems have been in existence for years, since businesses first started to install in-house switching systems that in many ways resembled a miniature, private version of a telephone exchange. This allowed a smaller number of external lines to be shared effectively by a larger number of business users, saving money on the cost of external connections, while also helping facilitate internal communication.

Today, there are a number of different varieties of PBX in operation, including both traditional, physical systems and modern, virtual exchanges. The two main types are PBX and IP PBX. This introduction to telecoms explains the difference between PBX and IP PBX, the features and benefits of PBX, and how to find the right telecoms system for you.



A PBX connects a smaller number of incoming phone lines to a larger number of extensions, and unites all of the individual handsets into a single, coordinated network. As well as allowing a number of extensions to function through each individual line, a PBX will perform a range of other tasks in order to allow the business phone network to function in a way that is useful and practical.

For example, it will automatically route some incoming calls to the extensions that are deemed appropriate according to certain criteria, and allow other calls to be directed to the extension that has been selected by the caller. The PBX also establishes a connection between handsets and external lines when required so that employees can place external calls. And it directly connects individual handsets in order to allow internal calls to be made without going through the external telephone network.

These are the core tasks carried out by a PBX today, and they are essentially the same set of tasks that these systems have carried out since they were first invented in the middle of the 20th century. However, over the decades, telephone technology has not stood still, and neither have PBX systems. One of the most notable recent developments is the creation of the IP PBX.


IP PBX Systems

Voice over IP or VoIP technology is what drives modern communications solutions such as Skype. It has, in many ways, changed the way in which business communications work, and is often used in tandem with traditional telephony, or may be required to interact with standard phone networks.

Modern PBX systems are often designed to work with VoIP as well as traditional telecommunications, and these are known as IP PBX systems. However, there is no strict definition as to what exactly constitutes an IP PBX. In practice, this is essentially a category encompassing a range of VoIP-ready system types. This includes a dedicated piece of hardware, located within the business premises and looking rather like a rack-mounted server.

Less commonly, it may refer to a complete business telephone network which includes a VoIP element. Alternatively, it may refer to a virtual PBX that handles VoIP communications. Most commonly, this is either a software-based system running on a computer connected to the company's phone network or a cloud-based service providing similar functionality but hosted with an external provider.

Existing, traditional PBX systems can usually be converted to handle VoIP communications along with the communications for which they were originally designed. There are two main ways in which this is usually handled. In some cases, it is achieved by installing new, VoIP-capable modules within the existing system. In other situations, it is managed through the use of a separate module, which will act as a mediator between VoIP communications and a traditional PBX, “translating” communications from one technology into a form the other will understand.

Which Businesses Need PBX?

For a long time, a PBX system was expensive to purchase and install, and difficult to maintain once in place. As such, they were the preserve of larger businesses, as only these businesses could really afford to use them and only on larger scales were they truly cost-effective. Alternative systems, such as similar but smaller-scale manually-operated “key systems,” were developed for use by smaller companies.

As with many technologies, however, PBX systems have become both better and cheaper over the years, and the introduction of entirely different types of system that perform the same job such as a virtual PBX has accelerated this process. It is now fairly common for these systems to be used by relatively small businesses that once could never have justified using a PBX. The basic functions of PBX are all inherently useful for businesses of any size above a handful of employees. So now that costs and maintenance requirements are less prohibitive, most businesses that are made up of more than a few people find that using this kind of system is justified.

Changes and improvements in the technology underpinning PBX are also prompting businesses with existing but rather old systems in place to upgrade. In particular, many businesses are electing to upgrade to an entirely new and modern IP PBX instead of upgrading their existing system to handle VoIP. This means that in addition to gaining VoIP functionality, they also gain access to other features that were not part of their old installation, and in many cases also move to a system that is easier to maintain and more cost-effective in the long-term than their old set-up.


Things to Consider When Choosing a PBX Telecoms System

There are a number of key points that businesses may need to consider when choosing a PBX solution that will fit their requirements and deciding as to what kind of system and features to invest in. These include:


Capacity: This is one of the most basic yet most important considerations. A given PBX will only be able to handle a certain number of extensions, and a certain number of simultaneous calls. It is important to make sure that your PBX will have the capacity you need in both of these areas.

VoIP Protocols: There are a few different protocols, both open source and proprietary, used by VoIP communications. SIP, an open source protocol, is the most common. It is therefore advisable to ensure that an IP PBX is SIP-compatible, and ideally able to handle other protocols too.

On-Site or Hosted Solution: On-site solutions have higher initial costs and will require your business to take responsibility for on-going, periodic maintenance. Hosted solutions will have lower initial costs and will leave maintenance in the hands of the service provider, but will have higher recurring costs. Think carefully about which will suit your business.

Security Systems: When a PBX is used with VoIP calling, there are specific requirements which often cause problems with security systems that are not designed with this purpose in mind. VoIP- and SIP-compatible firewalls are necessary in order to avoid issues. It may be preferable to opt for a PBX that includes a firewall built-in.

Interactive Voice Response (IVR): Some PBX systems offer IVR functionality; an automated greeting system that will answer incoming calls and provide a pre-recorded message and list of extensions, together with interactive navigation options.


About Virtual and Hosted Telecoms Solutions

Virtual PBX has been available since the 1990s, and carries out essentially the same job as a traditional PBX but uses a computerised, software-based system instead of dedicated hardware. There are now three types of PBX that are essentially software-based: virtual PBX, hosted PBX, and cloud PBX.

While there are some differences, the three names have been applied so liberally over the years that it is questionable as to whether there is really any definitive difference or whether these are three names for the same general type of solution.

The first real virtual PBX was offered by a company named, appropriately, Virtual PBX. This service most closely resembled what would now be recognised as a hosted PBX. As the first of its kind, however, it was unsurprisingly rather more limited than current systems, or indeed the traditional PBX systems of the time which had had much longer to develop. All it could really do was forward calls to the appropriate on- or off-site handset.

Shortly after the turn of the millennium, VoIP technology began to really take off and the ability to have VoIP systems interconnected with traditional phone networks also improved significantly. This was when the majority of virtual PBX providers were able to add an effective system for handling outbound calls. Things changed a great deal in this period, and prompted the creation of a new name; “Hosted PBX.” Later, when the word “cloud” gained popular currency in its current technological sense, it soon came to be applied to those PBX services that are essentially cloud-based.

In common usage, at least, the three phrases are generally treated as interchangeable. As such, you should not make the mistake of thinking that any specific features or functionalities are necessarily implied by the name that a given provider chooses to describe its services. Rather, you should look carefully at the list of features to understand exactly what you are getting, and to compare one service effectively with another.


On-site and Off-site PBX: Making a Choice

Probably the biggest choice - and arguably the most difficult - that a business will face when choosing a PBX solution is whether to choose an on-site system or an off-site, hosted PBX solution. There are a number of advantages and disadvantages to each approach. Key factors to think about include:

Costs: Probably the first factor you consider will be simple cost. As discussed above, on-site PBX systems have higher - potentially prohibitive - initial costs but lower on-going costs. Hosted solutions, on the other hand, are cheap to set up (in most cases although costs vary depending on provider and feature set), but are billed as a monthly service and therefore have higher recurring costs.

Features: On-site solutions are more flexible in some respects, being relatively easy to reconfigure and better-suited to Wide Area Networks (WANs) incorporating branch offices. However, for the most part it is difficult to form a general comparison in terms of features and capabilities. There are many different in-house systems and many providers of hosted solutions, and in both cases this means a great deal of variation in features. The main thing is to ensure that any specific solution you consider offers everything you will need.

Maintenance: An on-site system will require your business to take responsibility for ensuring that it receives the necessary ongoing maintenance, whether this means having employees who can carry this out (often your IT team) or using external services. With an off-site solution, this is the responsibility of your service provider and the costs are included in your subscription. Sometimes an exception is made for changes in configuration, requiring your business to undertake these.

Traditional Phones or VoIP: Many hosted solutions are rather more geared towards VoIP communication than traditional, analogue telephony. Analogue handsets are usually easier to integrate with on-site solutions. Ultimately, both types of PBX are capable of handling both kinds of communication, but if you are heavily reliant upon either traditional phones or VoIP then this may be worth taking into account.

Security Considerations: A modern and up-to-date PBX system, whether on-site or off-site, is almost always connected to the internet. As such, there are some security vulnerabilities to consider. A firewall should be sufficient to prevent denial or theft of service attacks, but it can be difficult to configure that firewall in such a way that it will not interfere with VoIP. Using a hosted solution takes most of the security burden out of your hands and places it with the provider (although you will still need to ensure that your data connections are secure), while using an in-house PBX leaves this entirely up to you.


Final Points to Think About

If the above specific considerations have not led you to a definite answer as to whether to choose an on- or off-site PBX, there are some additional aspects that you might wish to consider. In particular, you might want to think about the strategy of core competencies. This is a philosophy that states that, in order to be at their most effective, businesses should keep their focus on the things that they do well. If an activity is necessary but falls outside of this scope, it is often best to outsource it so that it can keep focus insofar as possible on core activities.

For many businesses, this seems a sound reason to opt for a hosted PBX solution. As operating and maintaining telephone systems does not feature amongst, and is not closely related to, their core competencies, they find it better to leave that responsibility to a company that specialises in this area.

If telephony is closely related to a business' core competencies, on the other hand, then it may make more sense to have an in-house system. This may be particularly true in the context of an IT business, or a business which has telephony as a truly central part of its core activities, such as a call centre.


If you already have a Telecoms project underway, get in touch with SAS today to see how we can help you.

SAS can provide a shortlist of suitable partners for your business. Our service is non-chargeable and there is no obligation to proceed with our selected vendors.



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