PBX VS VoIP: Which Telecom System Is Better For Your Business?

Estimated reading time: 5 mins

A research conducted in 2016 indicates that 65 percent of clients prefer using a phone to communicate with a business. Since the invention of the telephone, communication in the business sector has been a critical aspect for any organization.

Having a business phone system is essential if you want to establish proper internal communication. It’s also helpful for setting up external communication with customers.

There are various telephony solutions in the market. The most common phone system in most workplaces is the Private Branch Exchange (PBX).

However, modern developments have led to the emergence of digital business communication solutions such as VoIP.

The big question I have been asked many times Рis voip good for business? With most companies in today’s market focusing on profitability and operational cost, here is a brief analysis of PBX vs VoIP to help you identify the best phone system for a business.

What are PBX and VoIP?

You can use the name PBX interchangeably with TDM (time duplex multiplexer). It’s an analog phone system consisting of a line to line connections that are made by an exchange.

It does not connect to any data network.

The PBX system helps businesses to make internal call among employees without the need for a public telephone network. Large organizations prefer using the PBX system due to its reliability and functionality.

VoIP, on the other hand, is a modern phone system that packages voice signals into data packets. It then transfers them using the internet.

VoIP offers businesses similar solutions to those of the PBX system. However, its rate is cheaper.

While it may seem like the VoIP system is the better option due to its low charges on the phone bill, the decision may rely on the needs of a specific organization.

Here’s a detailed overview of how the Traditional PBX and the VoIP differ from one another.

  1. The Setup Costs

The cost of setting up a PBX system is high. You need to purchase its premise hardware together with proprietary phones. Shop here for all your requirements.

Additionally, you need to pay for the installation and have separate funds for occasional maintenance.

Setting up the VoIP system does not require you to spend too much. You do not need to buy any premise hardware or get dedicated desk phones.

  1. Reliability

The PBX system dominates when it comes to reliability. Since it doesn’t use the internet, it does not encounter any fluctuations when there is a lag in the internet connection.

The VoIP system, on the other hand, is highly dependent on the internet. It can be a significant problem for businesses that rely on phone usage.

You should not use the VoIP system if your business is in an area with poor internet connectivity. If you end up using a VoIP system, ensure that your business has at least one analog phone line that can help you during an emergency.

  1. The Efficiency

Businesses store essential contact details in the office phones to access them quickly. Depending on the strength of the internet, the VoIP system can allow you to store unlimited phone numbers.

Also, PBX allows you to store phone numbers, but space is limited. You need to spend money to increase the storage size.

  1. Quality

The quality of the call in VoIP is highly dependent on the strength of the internet. A stable internet connection delivers a clear transmission.

Interference with the internet connection will negatively affect the sound quality. The PBX system always delivers a sound that is clear and consistent since it is not affected by the internet.

  1. Security

A PBX system can guarantee security over the information that it transmits. PBX is similar to landlines because it uses analog signal transmission. It uses copper lines of the PSTN to transmit the voice data, which helps avoid hacking.

The VoIP system is highly vulnerable to cyber-attacks. However, the likelihood of losing data due to hacking relies on the security measures put in place by the provider.

It’s common for businesses to incorporate security measures such as firewalls or data encryption.

  1. Phone Compatibility

Traditional PBX does not connect to any phone. It only deals with proprietary telephones. However, a VoIP solution does not require the use of dedicated phones.

You can use the service with their mobile phones, or use the older style landline desk phones with an adapter. You can still find IP Desk phones that are made specifically for use with the VoIP solution.

  1. Functions

The PBX system can work anywhere. Its primary functions expand from that of landlines and include voice messages, voicemail, faxing, and phone conferencing.

The VoIP system has a broader functionality scope as it touches on phone conferencing, business SMS, video conferencing, screenshot sharing, file sharing, team messaging, and collaboration.

Even though the traditional PBX solution is a favorite for medium and large organizations, its popularity is fading. Its analog nature, together with its dedicated hardware, promotes the reliability and security that every business owner needs.

However, the VoIP system, with the help of the internet, is more accessible and reliable. It’s the best option for businesses that cannot match the initial and operational costs of the PBX system.

For the PBX system, its security and reliability do not come at a cost.

However, it requires a knowledgeable team of professionals to conduct installation and maintenance. It can play to the benefit of large organizations that have an in-house IT department.

Small organizations looking to gain from the functionality of this analog system may be out of luck.

PBX vs VoIP: Which Should You Choose?

Choosing the best solution between the traditional PBX and modern VoIP may be difficult. The traditional PBX solution dominates the large scale enterprise sector due to its security, reliability, and functionality.

On the other hand, Modern VoIP has evolved to become a cost-effective and stable solution.

If you can’t choose between the two, you can choose to work with a hybrid solution. A hybrid utilizes features from the VoIP solution and integrates it with the infrastructure of the PBX.

Get more information about PBX vs VoIP from our blog.

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