What Is an IP PBX Phone System and How Does It Work?


An IP PBX phone system is a telecommunication device that allows you to place incoming and outgoing calls over the internet. It does so by converting analog signals into digital signals and directing their control to a premium VoIP service provider.

However, understanding the true technicalities and the computer jargon behind the concept can be confusing. And, terms like IP PBX and VoIP generally look intimidating.

So, if you want to learn all about PBX phone systems and their various advantages, you’ve come to the right place. Keep on reading to learn more about IP PBX phone systems and how they work.

What Is an IP PBX?

Generally, IP PBX and VoIP phone systems stand for the same thing. You can define both of them as phone systems that work with internet protocol (IP) to transfer data. Similarly, VoIP simplistically stands for Voice over Internet Protocol, while we represent switchboard elements within private phone systems through PBX (Private Branch Exchange).

We use these telecommunication devices to enable voice calls to overseas desk phones. Similarly, you can receive and send calls across any range of telephone networks through an internet connection. Usually, they are crucial for businesses as they provide the required services for the functioning of a sustainable company.

These enhanced services include providing extensions for employees, managing numerous incoming and outgoing calls, and general business call managing functions. However, it’s worth noting that other than VoIP, PBX uses different communication channels such as integrated services digital network (ISDN) too.

What Features Do IP PBX Phone Systems Have?

In general, companies design these services to meet the demands of new and growing businesses. A standard PBX would involve call-queuing, conference calling, call routing, hold music capabilities, auto attendants, and much more.

When it comes to IP PBX systems such as 3CX IP PBX, they consist of the integral component of VoIP phone systems. They can include aspects such as VoIP phones, IP PBX servers, or a VoIP Gateway. Likewise, in many ways, they can relate to proxy servers. Through these, SIP clients would register into a server and then make a phone call by requesting the IP PBX.

They often have an index corresponding to a SIP address, enabling internal and external calls to a specified location through a VoIP gateway or service provider. Along with that, you can change them using open-source solutions and with help from Linux.

Overall, there are many benefits and drawbacks to using IP PBX phone systems, so they may not appeal to everyone. However, for a more informed decision, you can continue reading to learn more about the history and functionality of IB PBX systems.

Types of PBX Systems

Before we dive into the technicality of IP PBX, we should first look into its origins. Generally,  there are three main types of PBX phone systems: analog, cloud-hosted, or digital.

An analog variant PBX system would be your average landline system. It uses public switched telephone networks (PTSN), which is becoming overwhelmingly more uncommon over time.

Meanwhile, digital PBX, somewhat similar to cloud-based systems, is done under a stable internet connection and bandwidth. It enables more interactive and technical solutions to modern businesses at a lower cost. 

However, all these individual IP PBX phone systems function in exceedingly different ways. For instance, conventional analog systems use old copper telephone landlines to make incoming and outgoing calls. On the other hand, modern systems would generally use a VoIP telephone system over an IP, or a mix of digital and analog lines.

When it comes to analog PBX phone systems, these copper wires would have to be connected to phones within your office or home. Afterward, the box would need to utilize telephone switches to encourage incoming calls directly to your office/home phone.

Subsequently, every phone on-premises would be able to make outgoing calls as they connect to numerous trunk lines through their PBX box.

Meanwhile, an IP PBX would utilize a digital phone connection rather than an analog one. Therefore, updating to an IP PBX implies that you’d be switching to more simplistic and modern features. Compared to conventional systems, you wouldn’t be restricted to a specific number of trunk lines or outside extensions.

IP PBX systems work by benefiting users with a practically unlimited number of trunks and add-ons. They would serve as the ideal choice when resilience and robustness are preferred.

Continue reading to know more about the components that contribute to an IP PBX system:

How Does an IP PBX Phone System Work?

IP PBX systems serve seemingly simple functions but through complex mechanisms. The most notable feature of IP PBX phone systems is that they allow you to place and receive calls over the internet. They do this by changing analog voice signals into digital signals. In this process, they administer calls to the VoIP service provider, which then manages the start and end of all calls.

These services use a Session Initiation Protocol (SIP) that has become a universal standard for VoIP phone systems. Through SIP trunking, a PBX is capable of connecting to numerous voice channels while remaining unchanged.

Although, the process by which IP PBX runs is complicated, with numerous components that help in functionality. Thus, the following are some components of an IP PBX system that contribute to its capabilities:


A firewall can become part of the internet and then join distant linkages. It serves as an integral component in IP PBS systems.

These linkages would include devices, such as mobile phones processing 3CX Android and IOS apps, personal computers processing PBX’s softphones, and similar PBXs joined through a bridge. Similarly, a router can also join a PSTN network with the help of a VoIP provider.

Corporate Network

All corporations have a local network for their IP PBX system. These networks help run SIP clients, which include IP phones connected to the PBX and softphones.

VoIP Gateway

Another crucial component of IP PBX systems is VoIP gateways. They function by connecting to PBX through PSTN networks. They allow you to make incoming and outgoing calls using phone lines, which can be particularly helpful for businesses transitioning to VoIP.


Benefits of IP PBX Phone Systems

There are numerous advantages to switching to IP PBX systems over traditional phone systems.  Below, we have provided a few detailed examples of each:


The most substantial benefit of switching to IP PBX systems would by far be affordability. With IP PBX phone systems, small businesses do not receive the burden of high licensing fees.

Therefore, companies would be able to save on profit and direct it towards other expenses, such as support and maintenance. Furthermore, since you only need an internet connection for administering an IP PBX phone system, you would save a ton of money on on-premises hardware and equipment.

Ideally, this serves as the best alternative for both small and sizable businesses.  

Cloud-Based Reliability

IP PBX phone systems are reliable due to their dependence on the cloud. With cloud-based backing, a reliable VoIP service could have numerous data centers for their dependable performance. So, even if your PBX system malfunctions, you’d still be able to connect your calls elsewhere.

Easy Transition

When you’re an established business, it’s understandable to have doubts about change, especially when you’re unsure of the outcome. Thus, it’s worth checking out SIP trunking when getting into VoIP phone systems. They serve as an ideal gateway to experiencing the value of IP PBX phone systems with minimum change.

Subsequently, as you make note of improvement and growth in your company with these small changes, you can then expand to more voice channels without much configuration.

Utilizing Existing Equipment

To save on initial costs, you can use the same hardware for VoIP systems. The equipment would already be attached to your PBX. The only requirements would be a SIP address, domain, and password. Other than that, after establishing a connection, you would be free to indulge in the benefits of IP PBX systems with ease.

In addition to the above-mentioned benefits, these are some features exclusive to VoIP phone systems: auto attendants, low-cost international calls, contact center capability, integrated video conferencing, live chat for businesses, and advanced call routing.

Where Can You Get an IP PBX Phone System?

Are you looking for an upgrade for your business communication services? Phone.com can serve as a great place to get all of the modern features of a sizable enterprise phone system. These services would all be at an affordable price, with the convenience and ease of entrepreneurs and growing businesses in mind.

Easy to Buy. Easy to Use.

Overall, IP PBX systems are highly advanced and beneficial. If you’re looking to install an IP PBX system, Phone.com ensures that you don’t have to deal with any hassles involving implementation and installation. You can start using your business phones immediately after choosing from our selection of 20 million phone numbers, all within a fraction of the cost of traditional phone systems.

Whether it’s automated attendants, hold music for callers, or greetings, Phone.com would ensure that your customers receive the best experience at your expense. So, what are you waiting for? Set up your IP PBX phone system and grow your business today with Phone.com.


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