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Written by
Katy Ratican
5 Oct 2021
4 minutes

PBX vs. VoIP: Which one should you choose for your business?

A guide for local business owners and entrepreneurs who have to choose between PBX and VoIP for their business phone system
Pbx versus voip business phone

If you’re starting your business, deciding on the best business phone system for your needs is one of the earliest decisions you will have to take. If you’ve been running your business for a while, there will come a time when you have to upgrade your office phone system and decide between the two. This guide will help you to better understand the features of PBX and new phone number apps delivered through VoIP.

What is PBX?

A PBX or Private Branch Exchange hosts your phone systems on your premises. If your business requires several phone lines, they will be routed through the PBX hardware located in your office or workplace.

PBX systems became a viable choice because businesses didn’t want to host multiple phone lines for their employees. That would have been prohibitively expensive.

With PBX, users can use a single phone line to make and receive calls. In that sense, it’s a private telephone exchange for your business.

While the earlier PBX systems were analogue, the modern versions use digital signals. But they will be converted to analogue after they leave the local business phone system.

What is a VoIP system?

A VoIP or Voice over Internet Protocol delivers voice and multimedia sessions using internet connections. VoIP converts analogue voice into digital packets and then transmits them over the internet.

VoIP can be used to contact people who have either traditional phones or other IP (internet protocol) phones. It has become popular worldwide due to the exponential increase in the usage and capabilities of broadband internet at reasonable costs.

Things to keep in mind when choosing between PBX and VoIP

Both PBX and VoIP have their distinct advantages which you should be aware of before making a decision. Keep the following factors in mind when choosing your business phone system:

1. Initial investment

The first thing you should know about PBX is that the initial investment will be quite high. You would need the hardware and devices, routers, software and you’ll have to ensure an uninterrupted power supply. Put together, you’re looking at thousands of pounds.

If you opt for a VoIP system, all you need are the IP phones. With your USB headsets, your initial investments will be significantly lower than that of PBX. For small businesses and startups, this makes VoIP the ideal choice.

2. Call quality

It depends on the quality of the hardware you use in PBX. Your phones and routers need to be top-notch for excellent call quality. This means you’ll have to go for high-end hardware since the usage will be predictably high.

The call quality in VoIP systems used to be a problem years ago. That was primarily due to weak internet connections. But with fibre optic cables, the call quality has improved significantly and as long as you have a stable internet connection, there’s nothing to worry about.

3. Scalability

This is one of the biggest challenges with PBX. Every time you need to add a connection, you would need additional hardware and phone lines. If you’re shifting, the problem becomes acute. You’ll have to install a new system and make further investment.

But VoIP systems are based on licences and subscriptions. The system is designed to be scalable and you can add new users and other features without having to get expensive hardware. You can also upgrade your plan with the utmost ease. A few clicks and you’ll be able to add new users.

4. Reliability

One of the reasons for the popularity of PBX systems is that they are reliable. But for that, you need to install them properly and use high-quality hardware. You also don’t have to worry about anyone hacking into your system. But if there’s a problem with the hardware, the entire system will be down.

Any power outage will affect a VoIP system since it needs electric power to run. Low-quality internet connections will also bring down the quality of your calls. With the right firewall, encryption and strong passwords, VoIP systems can be defended against hackers.

5. Mobility

A PBX system is bound to a location. Since the hardware, routers and connected phones will be in your place of business, you won’t be able to make or receive calls from outside. This makes them unsuitable for remote work.

A VoIP system enables you to route calls to your laptops or other devices. With a second-line app, you’ll be able to add a second number exclusively for business and use additional features like auto-reply to separate your private and business lives.

In short

It’s one of those decisions that can have long-term impacts on your communication capability. As a small business owner or entrepreneur, considering the flexibility, cost-effectiveness, scalability and mobility, a VoIP system is generally a more sensible and smarter choice.

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