Difference Between PBX and Centrex

PBX vs Centrex

A Private Branch Exchange or PBX is a unique method of addressing the high costs of communication between offices within the company. A PBX is more like a localized phone system with each line having a three or four digit number only. Companies prefer PBX because it cuts costs while the employees like it because it is much easier to remember the numbers. A Centrex is a service that is provided by a telephone company that simulates a PBX system. But unlike a PBX where the company needs to buy and install the hardware, the telephone company is fully responsible for installing and operating the equipment. All the switching equipment is also located at the telephone company and not at the subscriber.

Because the equipment is owned by the telephone company, a Centrex is much cheaper to acquire compared to a PBX. This makes it the only choice for companies who have a limited budget. Although it might seem more expensive compared to Centrex, PBX can end up cheaper in the long run since there is no monthly payment aside from the wages of those who maintain it. Centrex users are also limited to what features the telephone company wants to implement. They just can’t decide to want something and implement it right away. And even if the telephone company implements a new feature, there is still the issue of price. Telephone companies often charge extra for additional features, especially for new ones. This is not a problem with PBX and the owners can do as they please and install any feature they like.

The only favorable thing about Centrex is in its ability to place extensions on a totally different location. Because the hardware is located at the phone company, if you have Centrex on two separate buildings across town, you can make them act as if they are in the same location. With a traditional PBX, this is not possible as you would need to use the lines of a telephone company to call outside your location. But even this feature comes standard in an IP PBX which is the newer and better version of the PBX.

Summary:
1.PBX is hosted at the location of the company while with Centrex, all the hardware is with the provider
2.PBX is generally better but much more expensive compared to Centrex
3.PBX users have full control when it comes to features while Centrex users are limited to what the provider allows
4.You can place extensions far away with Centrex which is hard to do with basic PBX

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