Business telephone system glossary

A business telephone system involves sophisticated technology, can be challenging to understand and uses a range of unique terms and acronyms. We have provided this glossary to clarify commonly used terminology in the business phone system industry.

This is the main photograph for the article Business telephone system glossary. It shows a close up of a dictionary page.

Photo by Joshua Hoehne on Unsplash.

We have set out below a glossary of the most commonly used business phone system terms to be read alongside our business phone system articles.

In this article

Business telephone system terminology

ATA (Analogue Telephone Adapter): An ATA is a device used to connect analogue telephones and other equipment, such as fax machines, to a digital or VoIP phone system.

Cloud VoIP: See hosted VoIP.

DTA (Digital Telephone Adapter): A DTA is a device to connect digital telephones and other equipment to a VoIP system.

EPBX (Electronic Private Branch Exchange): The term EPBX was used to distinguish digital PBX from the older analogue PBX telephone systems. Today, as many PBX systems are digital, the terms are interchangeable although PBX is most commonly used.

FXO (Foreign Exchange Office): This is the port (or plug) on the telephony device (phone, fax) that receives the analogue line. It connects to the FXS.

FXS (Foreign Exchange Subscriber): This is the port (or plug) that delivers the analogue line to the ‘subscriber’. In reality it is the plug in the wall which is connected to the FXO port in the telephony device (phone, fax). It delivers a dial tone, battery current and ring voltage.

Hosted (Virtual or Cloud) PBX: This is a PBX business phone system where its operating systems are located off-site with its telephone company/service provider which delivers the PBX functionality as a service over the PSTN. The telephone company/service provider routes the business’s inbound and outbound calls to/from the business.

Hosted IP-PBX: This is an IP-PBX business phone system where the business’s IP operating systems are located off-site with its service provider. The term is often used interchangeably with hosted VoIP.

Hosted VoIP: This is a VoIP business phone system where the business’s telephony services are located off-site with the VOIP phone system supplier.

Hybrid PBX: This is a conventional on-premise PBX business telephone system that has been upgraded through the addition of IP technology to enable it to connect to the internet and make and receive VoIP telephone calls.

Internet Service Provider (ISP): An ISP is an organization that provides services to assist a business in accessing and using the Internet.

IP (Internet Protocol): The Internet Protocol is the primary method or protocol that enables the sending of data packets from one host (e.g. a computer with at least one unique IP address) to another host over the internet.

IP-PBX: This is a PBX business phone system that uses IP technology to make and receive telephone calls.

ISDN (Integrated Services Digital Network): The ISDN was introduced in the late 1980s and is a circuit-switched telephone network system that allows the digital transmission of voice and data communications over traditional telephone copper wires.

ITSP (Internet Telephony Service Provider): An ITSP is an organisation that offers digital telecommunications services based on VoIP technology to allow businesses to use the Internet for making and receiving telephone calls. An ITSP provides technology to allow businesses to use their internet connection to make and receive telephone calls and to then transmit those calls to/from the PSTN. ITSPs use a range of signalling and multimedia protocols such as the SIP, the Media Gateway Control Protocol (MGCP), Megaco, and the H.323 protocol. SIP is generally seen and used as the industry standard protocol.

KSU (Key System Unit): A KSU system is a basic business telephone system that manages multiple telephone lines. It uses a central switching device – the Key System Unit – to manually determine the phone line selection. Each telephone handset has individual line selection buttons for each available line and the user must manually select a line to accept or make a call.

KSU-less: A KSU-less is a business telephone system that is entirely wireless and does not use a central switching unit.

LAN (Local Area Network): A LAN is a computer network that connects computers and other devices within a single limited area such as a business’s premises.

On-premise or Self-hosted: Hardware and/or software are located at a business’s premises.

On-premise PBX: This is a PBX business phone system which has its operating system (analogue or IP) located at the business’s premises usually in its phone cabinet or server room.

On-premise VoIP: A VOIP business phone system which has its operating system located the business’s premises.

PABX (Private Automated Branch Exchange): See PBX.

PBX (Private Branch Exchange): A PBX is a business grade telephone system consisting of a telephone exchange or telephone switching system serving a particular business and which permits the sharing of internal telephone lines between handsets and connects those internal telephone lines to external telephone lines in the PSTN. It differs from a KSU system in that the PBX selects the outgoing line automatically.

Traditional PBXs ran on analogue (‘copper wire’) technology and connected into the PSTN over POTS. Traditional PBXs are still available, but most now are digital and utilise the internet to send voice and video communications.

PCI cards: See VoIP interface cards.

POTS (Plain Old Telephone Service): The POTS is the standard analogue telephone service and remains the basic form of small business and residential telephone connection in many parts of the world.

PSTN (Public Switch Telephone Network): The PSTN is the traditional circuit-switched telephone network.

SIP (Session Initiation Protocol)/SIP Trunking: SIP and SIP Trunking tend to used interchangeably. There is actually no physical ‘trunking’ involved with SIP Trunking. SIP is a signalling protocol used for initiating, maintaining, and terminating real-time sessions that include voice, video and messaging applications between two endpoints. It is a technology solution required to ensure that telephone calls can be made and received over the internet and transferred onwards to the PSTN.

Softphone: A Softphone is software used for making and receiving VoIP telephone calls from a computer, smartphone or tablet rather than using dedicated telephone hardware.

Unified Communications (UC): Unified communications refers to the integration of a range of communications systems and applications across a business. 

UPS (Uninterruptible Power Supply): A UPS is a device that provides emergency power when mains power fails or drops to an unacceptable voltage level. It can provide near immediate power for a few minutes to, in some cases, several hours, from energy stored in batteries, super capacitators or flywheels. A UPS is commonly used to protect computers and telephone networks.

Virtual VoIP: See hosted VoIP.

VoIP (Voice Over Internet Protocol): VoIP is a group of technologies that deliver voice communications (and other multi-media) over IP networks such as the internet. BT is due to replace ISDN with its VOIP network in the UK by 2025.

VoIP adapter: A VoIP adapter is a device used to connect analogue or digital telephones and other similar equipment, such as fax machines, to a VoIP phone system

VoIP app: A VoIP app is software that allows computers, smartphones and tablets to make and receive VoIP telephone calls.

VoIP gateway: A VoIP gateway is a hardware device that converts analogue or digital telephony signals from a business’s internal phone system into packets of data for transmission over the internet. On receipt of data packets from the internet the VoIP gateway converts them into analogue or digital signals and transmits them back to the business’s internal phone system.

VIC (Voice Interface Card): A Voice Interface Card is a hardware device that simulates an FXS between a router or network switch and a telephone or FXS based device.

VoIP Service Supplier: This is a company that provides VoIP services to businesses.

WAN (Wide Area Network): A WAN is a private telecommunications network that spans a large geographical area and is used primarily for computer networking. Typically, a WAN will consist of multiple LANs connected through public networks, such as telephone systems, or through leased lines or satellites.

Other guides