What is PBX?
PBX is an acronym for Private Branch Exchange, which is a telephone switching system that serves a private organization and centralizes telephone lines and provides intercommunication between a large number of telephone stations in the organization. The central office lines provide connections to the public switched telephone network and the centralization of a PBX allows the shared use of these lines between all stations in the organizations. The intercommunication aspect allows two or more stations to establish telephone calls between them without using the central office equipment
What a PBX allows you to do is concentrate all of your phone lines into one location and then allows the shared use of these lines to each phone in the network. It also allows you to communicate internally without having to use centralized equipment. This all leads to less lines and equipment which drastically lowers the cost of installation as well as maintenance.
Each station connected to the PBX- could be a handset, fax machine, or computer modem- is referred to as an extension, and has a designated telephone number which can be mapped automatically to the numbering plan of the central office and the telephone number block assigned to the PBX. Lines are either selected automatically by the system or extensions are used in a numbering plan for its stations.