PBX vs Centrex: Difference and Comparison

Telephonic communication within a company, institution or any other office is very different from the local telephonic communication between houses in a city.


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With the special layout of telephone wires, a completely different switching system has to be set up to establish such kind of telephone network. Choosing the right system is very important, depending on the requirements and the cost.

Key Takeaways

  1. PBX is more expensive than Centrex.
  2. PBX requires on-site installation and maintenance, while the service provider manages Centrex.
  3. PBX is more customizable than Centrex.

PBX vs Centrex

PBX is a private telephone network used within a company or organization allowing users to make and receive calls between internal lines. Centrex is a telephone service provided by the telephone company that allows businesses to use a central office for their telephone system eliminating the need to purchase PBX.

PBX vs

In PBX systems, the hardware required to establish a telephone network, such as the telephone wires, switchboard, receivers, and other equipment, is completely and entirely owned by the company that is implementing the system.

Thus the company does not have to pay any telephone service provider to establish a network within the company.

On the other hand, a Centrex system is a service provided by a telephone company that tries to simulate the PBX model.

Thus in this system, the telephone network and the hardware are all laid out by the telephone service provider, but the operation of the network is a complete replication of the PBX model.

Comparison Table

Parameters of ComparisonPBXCentrex
DefinitionIt is an independent telephonic communication systemIt is a service provided by a telephone company
Hardware InstallationHardware installation is done by the company using the systemThe telephone company provides hardware installation
Switching centreA dedicated switch operation centre is established within the company The telephone company maintains the switching centre
Outside ExtensionsExtensions to different locations outside the office are not possibleExtensions to different locations are possible
ChargesRelatively less expensive as the system is completely maintained within the office Telephone companies often charge more for such services.

What is PBX?

PBX is a completely independent telephone network is that laid out by a company to establish telephonic communication within the premises of the company. It is an independent network, and no telephone provider is involved.

In such a network, the hardware required for establishing the network is installed by the company. These include telephone cables, switchboards, individual receivers, and other miscellaneous equipment.

As no telephone company is involved in the operation, a dedicated switchboard room has to be set up within the office space, with professional switchboard operators to maintain the telephone system.

The advantage of using such a system is that as t is completely independent, the set-up and installation cost is completely in the hands of the company.

But for proper functioning and maintenance of the system, professional individuals with experience in operating a switchboard as well as maintaining a telephone network are required.

Hence this might add up to the maintenance expenditure.

The main drawback of using this system is that since the network is completely localized within the company premises, extensions to different locations are not possible as there is no connection between the PBX network and the outside regional telephone line.

Hence making phone calls to locations outside the company can be a problem.

pbx 1

What is Centrex?

Centrex is a telephonic communication service provided by a telephone company that tries to mimic the PBX system in its operation.

As it is a service provided by a private telephone company, the telephone network is completely maintained by the service provider.

Thus the installation is also under the control of the service provider.

The installation includes the set-up of all the necessary equipment for a telephone network. The phone cable is laid out by the service provider, with a switching board that is located at the service provider’s establishment.

Along with this, individual telephone receivers are also provided by the service provider. Hence the company opting for such a service does not have to purchase any hardware essential for the telephone network.

The only drawback with this system is that as the service provider provides the installation and maintenance of the telephone network, it is more expensive than the PBX system.

But once the network has been set up, the operation of the network is a complete replication of the PBX system. Each telephone piece is connected to the other pieces on a completely private network inside the office space.

The benefit of this system over PBX is that as a private service provider maintains the operation, extensions to different locations are possible.

Main Differences Between PBX and Centrex

  1. PBX is a completely independent telephonic communication network. Centrex is a telephone company service that tries to mimic the PBX model.
  2. In the PBX system, the hardware installation is done by the company using the system. In Centrex service, the service provider provides all the hardware installation.
  3. A dedicated switch operation room must be established within the company for the PBX system. In Centrex service, the switching operation is covered by the service provider.
  4. In the PBX system, extensions to locations outside the office space of the PBX architecture are not possible. In Centrex service, extensions to locations outside the office space are possible.
  5. PBX is relatively less expensive, but proper maintenance of the system is necessary. Centrex services are more expensive as a private company provides the entire system.
  1. https://onlinelibrary.wiley.com/doi/abs/10.1002/j.1538-7305.1971.tb01873.x
  2. https://ieeexplore.ieee.org/abstract/document/1094509/
  3. https://ieeexplore.ieee.org/abstract/document/6592593/
  4. https://ieeexplore.ieee.org/abstract/document/6541818/

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