A business has to have a phone system, no doubt about it. However, choosing the type of phone system is no easy feat. There are so many options out there now that it really requires some serious thought to pick the best option. In this article, we’re going in-depth to look In this article we’re going to look at PBX vs. VoIP and the advantages of using VoIP.

If you have been looking online at phone systems then you will have come across these two different acronyms: PBX vs VoIP. Basically, these are your two options when it comes down to it.

Traditional PBX systems have been around for decades, while VoIP is a relatively new phone solution that has a lot to offer. However, both have their advantages and disadvantages.

The history of PBX

PBX means Private Branch Exchange and VoIP stands for Voice Over Internet Protocol. The traditional PBX system was created in the 1960s and actually required human operators to rout calls manually. Companies found that when they purchased their own phone systems (including phone lines, switchboards, desk phones, and more) and hired operators they could save more money.

As the technology developed, operators were no longer needed and the systems became more reliable/sophisticated. More and more companies adopted PBX phone systems, with added features, such as dial tone, extension dialing, call forwarding, and hold music being included later on.

Decades later, in the 1990s, VoIP phone systems were created and have continued to evolve to this day. Modern-day phone systems are significantly more advanced than the old legacy systems. VoIP stands for Voice Over Internet Protocol and the evolution of this technology has allowed businesses to enter the modern age.

The differences between PBX and VoIP

While PBX and VoIP are similar, in the sense that they are phone systems that facilitate inbound and outbound calls in an organization, there are some fundamental differences. VoIP has been considered to be the more popular choice of the two, as VoIP was purposefully invented as an improvement to the previous systems. However, traditional PBX still has its own benefits. So here are the differences between the two that you need to know.

The way service is delivered

One of the most notable differences between PBX and VoIP is the way they are able to provide service and how phone calls are received. A traditional PBX system is connected to a local Public Switched Telephone Network (PTSN) through a landline. Legacy systems used copper wires to establish the landlines and offered a limited number of lines, although there were still plenty of lines available so it wasn’t usually a problem.

PBX systems have typically required a full-time IT person on-site to maintain the necessary physical hardware that has to be stored in the office.

A VoIP system is able to transfer and transmit voice as data over the internet and transfer that data back to voice for the receiver. This means that a VoIP system only needs an internet connection for calls to be made, so less hardware and the VoIP service provider usually conduct the maintenance and upgrades to the system.

It is important to note that there are no speed differences between PBX vs. VoIP systems.


It may not be something that many people consider when wanting to grow their business, but a phone system is an integral part of that process. While both systems can handle being scaled up, they go about it in different ways. Adding additional lines as more employees are hired can be easily done with VoIP, as you simply add users to your plan. At the most, you may have to upgrade your plan and pay a higher fee, if you are on a monthly billing plan that includes updates/upgrades.

PBX can make it more difficult as lines may be too limited, based on the area where the business is located. You will need to add hardware and equipment. PBX systems also tend to be more expensive than VoIP, so you may end up paying even more to add lines than you would with VoIP.

VoIP can also allow phone systems to be upgraded to a cloud-based or virtual PBX system (also known as a hosted PBX). A cloud-based PBX has advanced features to offer maximum customization.

Flexibility for workers

Businesses need to be flexible if they want to retain employees. A VoIP system easily allows for that flexibility because it relies totally on the internet. A traditional PBX (vs. VoIP) system has to be located on-site since it is a physical phone system with landlines and hardware. Remote work can easily be done with a VoIP system, unlike with a PBX, and companies can be reached at multiple locations, allowing them to have offices all over the world.

Also, if you want to switch providers then that usually means that you will need to purchase all new hardware in order for the system to be compatible with the equipment your new provider has to offer.


This is a situation where PBX has got VoIP beat. Since VoIP is connected entirely through the internet, it is not always the most reliable system. If your business is located in a more rural area then the internet may be spotty or subject to long outages. Your options for providers may also be limited depending on whether they can cover that area or not.

A PBX system is less likely to go down, which can get costly in terms of lost business. This is especially important for emergency services or any organization that needs to be accessible at all times. Call quality can be better with PBX systems too. Call quality can be affected in rural areas, as well, with a VoIP system.

Although, this is not to say that a VoIP system is totally unreliable. They still offer a high level of service overall. However, there is also a risk of hackers attacking a VoIP system and causing it to go down, unlike with a PBX.

These are merely some of the differences between a PBX and VoIP phone system but are the most significant to keep in mind.

What advantage does VoIP offer over PBX?

VoIP and PBX are both popular options among contact centers. But there’s no doubt that VoIP offers a number of advantages over PBX. Let’s dive into five advantages:

VoIP is more affordable

VoIP is often less expensive to set up and maintain than a traditional PBX system.

VoIP offers better call quality

VoIP systems can offer high-quality voice calling, making it easier for employees to stay connected and communicate clearly. They can also be used with mobile devices, making it easier for employees to stay connected while on the go.

VoIP is more scalable

VoIP systems are more scalable than PBX systems, making it easier to expand your system as your business grows.

VoIP is easier to manage and maintain

VoIP systems are typically easier to manage and maintain than PBX systems since they can be managed remotely.

VoIP offers more features and flexibility

VoIP systems often offer a wider range of features than PBX systems, including call forwarding, caller ID, voicemail, and call waiting. They’re also more flexible than PBX systems, making it easier to add new users and features.
There is no one-size-fits-all answer to which is better for your contact center. The best solution for your company will depend on a number of factors, including your budget, needs, and preferences. However, in general, VoIP systems tend to be more cost-effective, flexible, and feature-rich than PBX systems. So if you’re looking for an affordable and feature-packed solution, VoIP may be the better option for you.

This concludes our article on PBX vs. VoIP.

Is a virtual/cloud-hosted PBX the same thing as a VoIP system?

A virtual/cloud-hosted PBX system is technically different from a VoIP system. A virtual/cloud-hosted PBX utilizes VoIP system technology to actually make calls but also has additional features. VoIP systems came about before virtual or cloud-based PBX systems and virtual systems are considered to be an advancement to the VoIP system.

What is the difference between PBX and IP-PBX?

IP PBX is another way of referring to VoIP phone systems and is an internet-based phone service. PBX is the original phone system, using landlines to allow outbound and inbound calls. PBX systems also allow employees to make internal calls to each other.

What is the difference between PBX and PSTN?

PSTN stands for Public Switched Telephone Network and is the way PBX phone systems are able to make calls. Legacy PBX systems used landlines that connect to a local PSTN and calls travel through the PSTN.

What is the difference between a PBX and a call manager?

A PBX system is simply a phone system that receives and routes phone calls within a company or organization or allows people to make outbound calls. A call manager is more complex in that it includes features such as IP phones, media processing devices, voice over IP (VoIP) gateways, and multimedia applications.

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