Comparison of Analog, Digital and IP PBX


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A Private Branch Exchange (PBX) is a telephone exchange that serves an enterprise by switching calls between users within the enterprise on local lines, while allowing users to share a certain number of external phone lines.

The main advantage of PBX is that it helps cut the cost by reducing the requirement of having a separate line (from service provider or central office) for each user and providing free call switching within the enterprise. This prime benefit has remained available ever since the invention of analog PBXs and has continued with the transition to digital and lately to IP PBXs. However, with advancements in technology, PBXs now offer much more advanced features to support functions of the enterprise.

With a long list of features available, it is now for the users to select the set of features and capabilities that meet their business needs. The choice to select analog, digital or IP PBX depends primarily on:

  • Type of business: Businesses that rely on strong customer relationships (like banks) have more communication requirements as compared to transaction based businesses (like retail stores).

  • Impact of features on operations: Advanced features provided by the modern PBX will help the enterprise to achieve its goals such as integration of PBX with CRM (Customer Relations Management) System.

  • Existing infrastructure (if there is any): Existing infrastructure like LAN (Local Area Network) within the enterprise can make the transition from analog or digital to IP PBX much easier and cost effective.

Comparison of Analog, Digital and IP PBX

The understanding of analog, digital and IP PBX and the features they offer is crucial for any enterprise for selecting the type of PBX. This article presents a comparison of analog, digital and IP PBX – their advantages and limitations – and all related factors for the users to make the right choice of PBX for their needs and budget.

Analog PBX

Analog PBXs use standard Plain Old Telephone Service (POTS) phones and copper wire. They are reliable, offer good voice quality and provide the basic features of a typical home phone (such as hold, mute, redial & speed dial) and can transfer calls between extensions.


Figure 1 – Analog Phone

Analog PBX keeps the extensions functioning even when the power goes out and the users remain connected. They are relatively cheap as they are simple and have limited options to expand or upgrade. However being less modular, analog PBXs are expensive to support, configure and upgrade. For instance, changing the location of an extension necessitates rewiring of punchboard by an experienced technician.

Digital PBXs

Digital PBXs offer a number of advanced features while providing the same (or better) voice quality and improved signal processing than analog PBXs. Some of these features include call forwarding, voicemail and virtual auto attendants. They provide the flexibility of adding new features and capabilities by adding new cards (add-on modules) on the bus structure in the existing PBX cabinet, such as:

  • Analog and IP phones can be connected.

  • Additional features like VoIP server, alarm systems and music-on-hold can be added.

  • Call center and enterprise sales software can be integrated.


Figure 2 – Digital PBX


An IP PBX offers call switching between VoIP (Voice over IP) extensions and digital / analog extensions within the enterprise with the ability to communicate with external users using both PSTN trunk lines and Internet / Intranet. IP PBXs are “software-based”, which can have a dedicated hardware or can be configured on a computer as software.

An IP PBX provides all the features of a typical analog or digital PBX and in addition offers several advanced features such as:

  • Unified communications: Single network of voice and video.

  • Presence Services and Mobility.

  • Voicemail delivery to email and fax delivery to email.

  • Voicemail transcription to SMS (speech to text)

  • TTS/ASR (text to speech/automatic speech recognition).

  • VoIP phone/soft phone connectivity.

  • Conferencing.

  • Interactive voice response (IVR).


Figure 3 – IP PBX

The main advantages of IP PBX are:

  • Economy: IP PBX deployment is very economical in very enterprises where LAN (Local Area Networks) exist, as IP phones will use the existing LAN and no extra expenditure is required for phone extensions. IP PBXs use Intranet and Internet for routing calls which can significantly reduce the telephone bills including long distance calls.

  • Unified Communication: IP PBX converges the two separate systems to a single more comprehensive network which also reduces the maintence cost.

  • Scalability: IP PBX being software based can expand with the growing number of employees and changing needs as there is no need of rewiring or adding new hardware. An IP PBX makes it easy to add any additional functionality as features can be added by simply upgrading the software.

  • Flexibility: Using IP PBX, the offices of an enterprise which may be geographically spread across the globe can be visible to the user as a single entity. Moreover, if the location of the office is changed there is no requirement of downtime and original phone numbers can be maintained using connection over Internet / Intranet.

  • Transition: IP PBX allow smooth migration from analog or digital PBX systems as they can integrate with both analog and digital phones.

  • Evolving Technology: In the past, IP phones did not work without power, which was considered a disadvantage as analog / digital extensions can work during power outage. With the introduction of Power over Ethernet (POE), IP Phones do not require a separate electrical outlet and can work during power outages.

  • Security: Security and encryption can be easily implemented in the IP PBX as compared to digital and analog PBXs.


Detail of Factor





Service availability





Initial Cost



Medium / Low

Recurring Cost




Easy to Install

Initial deployment




Easy to Configure





Maintenance requirements

Management/ maintenance





Ability to add modules

Less modular

Modular. Mostly addition of hardware


Scalability / Expansion

Ability to expand with increasing number of users

Limited to no scalability


Highly scalable


Ability to add new features


Possible with adding hardware

Easy due to software upgrade

Basic Features

Hold, Mute, redial and speed dial, call transfer between extensions




Advance Features

Call forwarding, voicemail, virtual auto attendants, CRM integration, IVR, conferencing

Not available



Advance Features

Voice and video convergence, Presence Services and Mobility, TTS, ASR

Not available

Not available




No security

Hardware required

Software based and can be easily implemented