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Network telephony embraces both the use of the public switched telephone network (PSTN) and the internet for both voice and data communications. An Internet Protocol Private Branch eXchange (IP-PBX) is a telephone system designed to operate over a data network in conjunction with the PSTN to deliver both voice and video content.

The term “IP” refers to “internet protocol.” The term “VoIP” refers to “voice over internet protocol” - the definition relates to the protocol, not necessarily the internet; the protocol can be used on intranets and local area networks, in addition to both private and public wide area networks.

An IP-PBX system combines traditional PBX functionality and voice over internet protocols enabling a business to leverage its intranet to enable users to make internal calls, and external local, long distance, and international calls via the PSTN.

Unlike “hosted VoIP” services, whereby the servers and other equipment are hosted and managed by VoIP providers at remote locations, IP-PBX systems are hosted locally with private connections to phone companies. As a consequence they avoid the dropped and jittery calls associated with hosted VoIP solutions, and do not suffer from call quality degradation as more phones are added. IP-PBX systems use either the primary rate interface (PRI) or the session initiation protocol (SIP) for establishing, monitoring, and terminating phone calls. SIP connections usually cost less than those of PRI.

IP-PBX systems are much easier to install than traditional PBX systems. They are easier to manage by using a web-browser interface that provides current call and systems statuses and historical usages. The SIP standard enables the use of non-proprietary IP-phones that can be “hot plugged” into any ethernet connection on the intranet, without changing extension numbers. SIP also allows for easy roaming.

IP-PBX systems have a lower total cost of ownership than both traditional PBX and hosted VoIP solutions because they do not require separate voice and data networks, incur lower long distance costs, and have no incremental costs as more phones are added. They offer at least the same functionality as traditional PBX systems, including auto attendant, call queues, call recording, and voicemail.

A PBX serves a particular business as opposed to a telephone exchange operated by a common carrier or telephone company, connecting outside calls with internal extensions, and internal extensions with each other. Originally PBXs were operated manually, but have become automated over time. Automated PBXs were special purpose computerized devices. A traditional PBX requires separate networks for data and voice transmissions.

An IP-PBX is a communications server that uses the VoIP protocol. It is able to switch VoIP calls between users on a local network, and allows all users to share external phone lines. The server hosts a server-side operating system, such as Linux, Unix, or Windows, and an application, such as Asterisk, which delivers the PBX functionality managed through a graphical user interface, such as Free PBX.

IP-PBX systems can be configured in different ways:

  • Single site – with an IP-PBX connected to the PSTN using a PRI or SIP-based carrier for typically 2 to 50 phones

  • Multiple site – a single phone system connecting multiple sites through extensions – a IP-PBX can be placed at a central (corporate) office, and can also be placed in branch offices, connected via the PSTN; the phones are connected through a private WAN or MPLS – small sites (branches) may have approximately 1 to 10 phones (without an IP-PBX) and larger sites (branches) may have approximately 11 to 50 phones with a local on-premise IP-PBX

  • For high availability, multiple data synchronized IP-PBXs may be placed at each site with redundant carrier connections to the PSTN

IP-PBX systems provide for unified messaging – the ability to receive all messages, including email, fax, and voice in one place. They can also provide for integration with applications, such as CRM.

IP-PBX systems are good for business because they are easy to administer, are fully functional private branch exchanges, and they have a lower total cost of ownership than traditional and hosted VoIP offerings.

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