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A private branch exchange (PBX) is a private telephone network used within an enterprise. It is a business-oriented phone system designed to supply efficient voice communications between the users of an organization. Acting as the phone company’s central office within an organization, a PBX works as the exchange point and point for routing calls.
The word private refers to its use in the private sector, as opposed to a public telecommunications company. Branch indicates a remote subsystem, and exchange points to its switching functionality. Most medium-sized and larger companies used a PBX because it is less expensive than connecting an external phone line to every phone line in an organization.