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VOIP vs PBX Phone Systems

Today, businesses have an abundance of phone system options to consider for their communication needs. In the past, small to mid-size organizations with multiple phones relied on a private branch exchange (PBX), which connected internal lines to external lines, and managed functions such as call holding or call forwarding. Thanks to technology most of these features are available on a  VoIP system, often at a lower cost than traditional phone systems.  

Voice Over Internet Protocol also known as IP telephony, internet telephony, and broadband telephony systems allow you to use a broadband Internet connection to make phone calls rather than analog phone lines.  A high-speed Internet connection and computer are the cornerstones of this type of system.

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Ease of Configuration

With an internet telephony system, custom produced voice recordings can be readily implemented and managed. It is easy to configure recordings such as personalized hold messages and phone menus directly from your computer. Calls can be transferred to multiple phone numbers according to user configurations. Due to limited user access, PBX or premise based systems often require costly service visits by a phone vendor whenever content changes are needed.

Having a user friendly portal to manage your greetings and announcements makes it easy to implement and manage professionally scripted audio messages.  By personalizing your phone systems’ main menu greeting, auto attendant, voice prompts, voicemail greetings, after-hours announcements and on hold messages, you can leverage your system for marketing and informational purposes. These enhancements can be updated frequently to elevate your customers’ experience, and improve how callers navigate your phone system and interact with your brand.


IP telephony systems offer a cost advantage when it comes to the initial set up and monthly charges for the service. You can choose to have IP Phones or use regular telephones with an adapter, and you may only need to pay a fee for setup and the adapters. With a Private Branch Exchange, a business will need to purchase a cabinet of special electronic equipment, which can become costly and obsolete over time. You will incur monthly charges for your phone lines and potential costs for message minutes or long distance rates.

Considering the Flexibility of Each System

If your small business requires additional lines or telephone numbers, a VoIP system is only limited by the amount of bandwidth available via its Internet connection. When additional capacity is needed, additional bandwidth can be added to prevent deterioration of call quality.

When purchasing a PBX system, you are buying a system that has been designed to meet your needs at the time of the purchase. To expand the system, you can purchase additional equipment and pay extra charges for enhanced capacity.

{{cta(‘6fdab8e7-48f0-4c27-8403-a04a575dce98′,’justifyright’)}}Reliability and Disaster Recovery 

Private Branch Exchange has an advantage over internet telephony systems in that traditional analog phone lines will still work in the event of a power failure or Internet outage. When using this type of phone you will need to forward each phone line (additional cost may apply to access this feature) to your mobile number or temporary number – thus disabling business phone features like call transferring, call holding, etc.  Additionally, you may need to purchase and install a new system, which can take days or weeks to coordinate. With a VoIP service, calls can easily be routed to mobile or soft phones or to another location. In the event of flooding or disaster recovery your calls will still be answered and can quickly be moved to a temporary location while your facility is being repaired.

Voice Quality Issues

As long as you have ample bandwidth, your VoIP calls will sound no different than calls made or received on a PBX system. IP telephony systems now offer HD voice quality which sound superior to POTS (Plain Old Telephone Service). The call quality can degrade if bandwidth is low. If a bottleneck occurs on the Internet, or you have too many devices in use at the same time and your system is not properly configured to manage the traffic, call quality may be compromised.  Increasing bandwidth, prioritizing call data, or using separate networks for voice and data will eliminate any quality issues.


Technically, VoIP phones will operate wherever there is an Internet connection.  Working from home or on the road is as easy as plugging in your phone or using an app.  PBX landlines have a physical address, which makes them difficult to move or access from other locations.  Special hardware and configurations can be set up to do this on a premise based system, but flexibility will be limited in most cases.

We’ve touched on a just a handful of features and capabilities to consider when purchasing a new phone system. As with all business decisions you need to weigh the pros and cons and contemplate how your business may change in the next 3-5 years.  It is a key tool for your business and will impact your ability to serve your customers. No matter which system you choose, a top priority should take into account how it will impact the caller experience. 


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