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PBX vs. VoIP. Which phone system will reign victorious? This post will discuss both these systems, with a complete breakdown of PBX and VoIP communication systems. Including price, maintenance, benefits analysis, recommendations, and more. Let’s begin with the basics.

What Is PBX Phone System?

PBX or “private branch exchange” is a type of telephone system within an enterprise that switches calls between users on a local line while at the same time enabling other users to share a limited amount of external phone lines. Furthermore, the system connects all office desk phones on the same network and allows a business to make internal calls for free and transfer calls with ease.

The primary purpose of this type of communication system is to save the cost of needing a line for each user. A private branch exchange is owned and operated by the enterprise instead of the telephone company. They use digital tech, and signals are converted to analog for outside calls. With PBX, a company can successfully have more phones than phone lines. Instead of multiple lines, it will use extensions to redirect the calls to the business number.

What Is A VoIP System?

VoIP, or simply put, voice over internet protocol, is an advanced technology for transmitting voice and audio data over the internet. VoIP converts your voice into a digital signal, allowing important calls to be made directly from a computer, a VoIP phone, or other data-driven devices. For example, when you use applications like Skype, you use a VoIP system. VoIP calling app-to-app is almost always free. However, additional costs for landline or mobile numbers can occur. 

People are learning to love this new alternative of communication and find it very valuable in the workplace and home. Why? Because VoIP offers more than traditional analog phone service and at a way more affordable cost. Cloud phone service providers include many helpful features not necessarily found with a standard line. Services like auto attendants, call recording, custom caller ID, and voicemail to email are just some of the essential features a VoIP might have. Plus convenience, you can VoIP call from anywhere you are in the world, at any time. 

Related: 20+ VoIP Features You Can’t Live Without

20 Differences Between IP PBX and VoIP

PBX and VoIP have many similar features and share many of the same benefits. The fundamental differences are found in cost, maintenance, scalability, multi-office collaboration, and when dealing with centralized data. Here are just twenty of the differences between IP PBX and VoIP phone systems.

IT Team Involvement

With a PBX installed in a business, your IT team will most days stay pretty busy with troubleshooting. Whether it is a traditional setup or IP, PBX can and will take more effort. Fixing issues are solely left to the owners’ responsibility to monitor and keep the system updated. If any features start showing difficulties and you have no one readily available who is skilled at IT, then maybe PBX isn’t the right choice for you.

Two coworkers working on a computer.

One of the convenient attributes of VoIP is that if anything stops working correctly, the provider will care for said responsibilities and will handle all the difficult to manage hardware and software issues. 

Related: What is Hosted VoIP?

Size of Business

More traditional PBX solutions are made for larger offices and buildings with hundreds of employees hard at work. IP PBX installations are more suited for medium-sized enterprises and smaller businesses. This system usually works with the benefit of a highly trained IT staff and a reasonable technology budget available for maintenance. VoIP works a little bit differently in that size isn’t as important as is the custom plan that serves the business. From solopreneurs to large companies with remote employees, any size company can benefit from using VoIP lines


Choose a provider on a case-by-case basis. A company that doesn’t plan to expand in the near future and perhaps one that has a limited budget might be better off sticking with their original PBX. Enterprises that plan on developing and growing might stand a better chance by using VoIP. If a business follows a similar plan throughout all of its offices, it can lower costs and improve company communication. It can help centralize data so that analysts and managers can better overview system performance. 

For help deciding what your business needs, contact SE Telecom today

Upfront Investments

Upfront investments are much more involved when installing an on-site PBX. The initial setup can be a project that requires much more initial money to install the full system. Before even purchasing phones and headwear, hardware might be necessary. Equipment and accessories like power supplies, routers, software, and VoIP gateways. Whereas with VoIP, the main piece of hardware you need to invest in is an IP phone. The user can actually wear any USB headset they might have that will work with their computer to save money.

Costs of Running

VoIP providers tend to follow a specific subscription model, while on the other side of the road, the running costs of on-site PBX will ultimately depend on the user’s setup. These extra costs can include but aren’t limited to software licenses, service and update fees, and maintenance charges, along with the phone bill. 


Scalability with PBX is a bit complicated, especially for newer offices. You might have to add extra phone lines and need to install upgrades or an entirely new system. A call center’s technology can be scaled more quickly and simpler with VoIP service. You can easily order more phones, add a network switch or include new users to the plan. Multiple offices and branches can then work off the same network plan. 

Related: The Pros and Cons of VoIP

Call Quality

VoIP nowadays typically uses the same audio codec as PSTN to deliver HD quality voice calls. However, insufficient network configuration and bandwidth errors can still heavily impact a VoIP call. The voice quality of PBX and VoIP can actually be similar, considering most modern PBX systems use the same VoIP technology.

A person on the phone while working.

Call quality is a number one priority, and it truly all depends on the quality of the hardware itself. Your router, switches, and gateway are just some of the things that determine the quality of your calls, more so than the type of service.


Team mobility is essential in today’s time because it keeps us connected even when employees are away from the office. On-premise PBX systems depend on an internal data network to connect all the phones. You really can’t make calls outside of the office. VoIP is a mobility asset for one main reason, You can call from anywhere. You can send and receive VoIP calls with your computer or mobile device, work remotely, and even accept emergency calls when not at work. Workers, especially Millennials, love mobility and flexibility when dealing with calls. 

Reliability and Service Provider Options

Reliance is all about what provider you use for your service. Both systems can be very reliable, and it all depends on precisely what you are looking for. In the end, the reliability and trust you have in VoIP or PBX are dependent on your provider and the service they offer.

With the rise of VoIP, there are many more providers to choose from with quality and reliable service reviews. 


Sometimes a PBX dashboard is created without a particular standard or consideration, and a custom-developed PBX might only work well when connected to a specific network or phone. Not following certain criteria or standards means inconsistencies, whereas a modern hosted solution will follow particular codecs and standards to have top-shelf hardware and services.

Related: What is VoIP Number Porting?

Important Calls

PBX and VoIP numbers are quite different from regular telephone numbers because they don’t have a precise location of where you are connecting from. In the case of emergency calls, like dialing 911, it is best to use your everyday mobile. Some solve this issue by offering this as a free feature but still require an open internet connection.

An employee working remote on a moble device and VoIP technology.


On-site PBX systems, route external calls directly to the PSTN (Public Switch Telephone Network). Since the system itself is not connected to the internet, it can’t be hacked. However, VoIP security systems depend significantly on the service provider. Many have top-of-the-line security programs installed, and engineers closely monitor 24 hours a day, seven days a week.

Domestic and International Calls

Switching a landline to a VoIP can make domestic and international calls much cheaper. Providers treat most local calls very similarly, in between local and long-distance. Long-distance or international calls can be made for much more reasonable rates, and if you call on another VoIP phone on the same plan, you can make calls worldwide–for free!

Internet Usage

Good news! VoIP utilizes your already existing network (Ethernet) to connect. These voice-over-internet-protocol calls only require 100 kbps or so of bandwidth per phone line. Before VoIP technology, much older, slower technology actually had to be run on a completely separate network, which was overly time-involved and way more expensive to operate. 

Voicemail Features

Both systems offer an advanced feature that will convert voicemails to texts, and some will even send them via email. However, some of these features may need additional hardware. Furthermore, these features make receiving your important messages easier than ever and more accessible to employees. 


More traditional analog telephone lines are separate from the power grid. Unfortunately, outages do affect PBX and VoIP equipment. PBX equipment such as servers and gateways still need electricity. VoIP also connects to the PSTN via the internet and requires power to the modem to function. However, some service providers will help you when your power and connectivity are down through apps.  

Multimedia Communications

PBX equipment can only handle voice calls, and VoIP can actually make voice calls, instant messages, and conference features. Yet another service benefit of VoIP is you can use the service in other offices, even located in different states. Furthermore, many of these VoIP features are a part of your monthly service plan.

Service Providers

As the use of VoIP systems increases and advances, fewer companies are utilizing the older PBX systems and equipment. If you do not have a PBX provider locally, it can become difficult to install equipment because you are relying on people who may not be trained contractors

There are many more options for VoIP systems because many phone companies and mobile service providers offer some form of VoIP equipment installation. 

Term Agreements and Contracts

PBX services commonly involve long-term agreements and contracts where you will be required to purchase software licenses regularly. 

On the other hand VoIP is a great option to try because they offer shorter-term contracts for their phone communication services

Cell Phone Compatibility

Traditional PBX service is not compatible with smartphones and other mobile devices. An upgraded version of PBX does work with a few select apps, but many exclusions are present when referring to all mobile devices. 

VoIP communication services allow for many more smartphone uses. The primary system can work efficiently off a service app that you can use on smartphones, including iPhones and Androids. This unique feature gives employees options for communicating outside of the office via their business number. 

Final Thoughts

VoIP communication systems are becoming more popular because they offer many features that traditional PBX systems don’t. They’re also cheaper, which is why many businesses are making the switch. If you’re thinking about switching to VoIP, be sure to do your research first and find a provider that offers the features you need.

Making the switch to VoIP can be an excellent decision for businesses of all sizes, and they also offer many more features. Furthermore, VoIP systems are compatible with smartphones and other mobile devices, making them perfect for employees who need to communicate outside of the office.

Contact SE Telecom for more information on how to make the most of your VoIP system.