Deciphering the two acronyms of PBX and PABX already helps understanding the difference between these two types of phone systems quite a bit: indeed, the former acronym stands for Private Branch Exchange, and the latter for Private Automatic Branch Exchange.
Because they are automatically operated, with “electronic switching”, PABX systems have features which were not available with manual systems, such as call conferencing, call waiting, automatic ringback, voicemail, and internet connectivity.
The reason why PABX is now seldom used is that almost every PBX system used these days is in fact automatic, so the two terms have started standing for pretty much the same thing. But originally, private branch exchange systems were operated by humans, pulling and plugging wires on large switchboards to connect calls. PBX has become so widely used to refer to PABX, that these systems are now in turn called PMBX or private manual branch exchange systems to avoid confusion.
The system behind PBX is actually very old. It dates back to even before electronics were involved in telephony. At the very beginning, a PBX designated a room for the switchboards. The operator would be able to connect calls to their recipient by manually plugging wires to complete the circuit.When electronics started to be part of telephone systems, the electric switching improved how PBX worked. It gave the possibility to automatically connect the calls to the recipient, thus erasing the need of human action. Therefore, in order to make the distinction between the manual and the automatic system, a new term was created: Private Automatic Branch Exchange, or PABX.
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