Types Of Phone Systems Explained

If your business is looking for telecommunications solutions, it can be a little confusing for those unfamiliar with terms such as VoIP, PBX and PABX. What can make it even more perplexing is that different systems can actually be integrated to form individualised solutions for specific needs.

It is important when considering business phone systems that you know how many users there are, the volume of calls and call patterns. Call management features are also vital and are an integral part of all systems. It is important to speak to a telecommunications expert when considering a system to help guide you through the options and your needs. Here is a basic guide to help give you a little knowledge before taking that next step.


VoIP (Voice over Internet Protocol) is increasing in popularity as its biggest attraction is the ability to significantly cut call costs. Quite simply, VoIP works by placing and receiving phone calls over the internet rather than a traditional landline. Usually it can be a simple case of just installing software and you are away. In many cases you can use your current phone – instead of plugging it into the wall, you plug it into a compatible modem or router.

The benefits of VoIP are rapidly being realised by businesses as along with cost savings (calls are either very cheap or sometimes even free), it allows for other forms of communication such as instant messaging and video calling. Of course, traditional faxes can also be sent via VoIP. Many telecommunications providers are making it easier for customers to go “naked” – do away with fixed landlines altogether – or have a mixture of systems.


The PBX (Private Branch Exchange) telephone systems allow companies to connect all of their internal phones to an external line. Essentially it is what is termed a switch service which links multiple phone lines and it allows businesses to have multiple users of the one phone number. Workers then have an extension, which is usually a three or four digit number so calls can be transferred throughout the business or to call fellow workers.

It also has the ability to integrate some handy features that can improve efficiency and the way a business is presented to outsiders. Greeting messages, call distribution, on-hold options and call management are all typical features of PBX systems. PBX has usually been used by big companies but with the ability to integrate it with VoIP. It is proving more attractive and affordable to smaller to medium-sized businesses.


PABX (Private Automated Branch Exchange) is very similar to PBX and really only differs in two ways – the name and its ability to allow users to manually choose outbound telephone lines (PBX systems automatically select the outward lines). Otherwise it offers all of the features of a PBX system.

It is geared towards big companies (upwards of 40 employees) and has improved greatly as technology has advanced. Once PABX systems took up a lot of space (entire rooms in some cases), but now they can be easily placed in an IT area along with computer servers. PABX systems are now more frequently just termed as PBX because they boast almost identical features.