Central Office Exchange Service (Centrex)

Definition - What does Central Office Exchange Service (Centrex) mean?

Central office exchange service (Centrex) is a service available from local telephone companies to business users that allows them to avoid having to purchase their own facilities. This service effectively partitions centralized capabilities among business customers and provides switching at the central office instead of the company premises. The telephone company manages all the required equipment for implementing a private branch exchange (PBX) and actually sells the services to the business customer.

The central office exchange server can be used in local government, professional offices, banks and financial institutions, hotels, colleges, universities, and small businesses.

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Techopedia explains Central Office Exchange Service (Centrex)

The lines within a Centrex system are delivered to business premises as individual lines or by multiplexing lines over single fiber-optic links. They provide an emulation of hardware PBX by using special software programming at the central office, which is customized to meet customer needs.

Centrex permits extensions at different locations, while allowing them to function as if they were located in the same building. Facilities such as direct inward dialing, where individual extensions are direct and there are unique telephone numbers for incoming calls, is a standard feature in the Centrex environment. The same system is also shared among multiple company locations at low cost and provides limited customization as needed, which minimizes operational programming and maintenance costs. The service also includes self-managed line allocations and cost accounting monitoring.