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Telephone System Basics

Because of the technology we have today, we easily take the telephone for granted. If you really think about it, the telephone is one of the most amazing devices ever created. It made long distances shorter. We can connect to friends, family, colleagues, business partners and practically anyone by just picking up the phone and dialling their numbers. We are not only instantly connected to them but we even have a two-way conversation. Back then, people wrote letters to keep in touch with each other and usually when the letter arrives, the news it bears is already old news. With the invention of the telephone, the news that happens now can be shared with anyone even with someone from another continent.

The telephone is one of the simplest devices you have in your house or office. It’s so simple that even a phone manufactured several decades ago can be used today when plugged into a phone jack.

The telephone system is an integral part of any business. Before getting your own system, you should understand some basic concepts about this humble invention.

Types of Telephone Systems

There are 4 types to choose from. Let’s start with the most popular one today which is the VoIP.

VoIP (Voice over Internet Protocol)

Both households and businesses can avail of this latest technology in phone systems. You can make the cheapest calls through this kind of platform. It works by sending your voice signals to the other person you are talking to through digital signals via the Internet.

This setup does not need a lot of wires and too much equipment. It is not as expensive as regular lines. A plan will have most of the features that a business needs. However, a lot of large companies do not rely on this type as it can sometimes bring problems such as dropped calls or poor call quality. Even with this in mind, there are still a lot of businesses, both big and small, that take advantage of this technology as it is really affordable.

PBX (Private Branch Exchange)

This setup is recommended for businesses with more than 40 users. It works by connecting wires to a service provider’s main satellite. It is 100% reliable as long as the wires are intact. It offers impressive features. The downside is that installation and maintenance costs are high. Don’t be surprised if your monthly bill is high as well. But that should not deter you from investing in this platform. It offers a lot of functionalities that are useful to a large corporation.

Key System

This type of system is similar to the PBX in terms of installation, maintenance and costs. It requires heavy wiring and equipment. It requires a phone cabinet and a Public Switched Telephone Network. But, like the PBX, it also provides a lot of useful features.


This type is usually recommended for offices with 10 users. It does not need wires and can be easily moved to another location should the owner decide to move to another office. It costs less than the 2 abovementioned systems. This type, however, cannot be expanded. This is not advisable for businesses that see growth in their horizon.

What are the basic telephone system features?

Now that we have tackled the different types available, let’s talk about the basic features of a telephone system. When choosing a type, you should at least see if your choice includes any or all of the following.


With this feature, you don’t need to travel to attend meetings. It is also very useful if you need to talk to people from other countries. The number of people that can conference varies so you should determine the number of participants in your meetings before getting this feature.

Direct InDial

This feature uses ISDN technology and allows each employee to have their own dedicate number. Incoming calls can go to their extensions directly without having the need to go through reception. It saves time and lets staff entertain customer calls at once.

Auto Attendant

This is your personal receptionist that does not get tired answering and routing calls. It instructs callers how to reach the person they are calling. This is valuable if you have a large volume of incoming calls daily or if you have after hours support.


Some systems provide you with music while some allow you to personalize this feature. You can put your company jingle or commercial.

Speed Dial and Directory

This is a very important feature for people who are too busy and are always on the phone. Just press one button and you can easily be connected to the person you are calling.

New phones now have the capability to store hundreds of frequently used numbers. You can easily find your contacts. If you have Caller ID, your phone can display the name of the caller if he is in your directory. If you can find a system that will allow you to import contacts from a spreadsheet, get it as this can save you a lot of time in both setting up and managing your directory.

Call Queuing

This sorts calls, queues them and then automatically distributes them to available lines. This is an important feature to have if you receive many calls simultaneously daily.

Ring Groups

You can assign a single number for each of your departments. You can set up the phones to ring simultaneously or one-by-one. You can set it up so that if one phone rings a certain number of times and is not answered, the call is automatically transferred to the next phone.

Call Transfer

You can either transfer your call to a person in the office or a field employee via their mobile phone.

The following features will help you with Accounting and Call Management.


You can limit access to international, long distance and mobile calls.

Call Tracking

You can get details of all calls (internal and external) made from every phone connected to the system. You can use this with Call Accounting to analyse the calling patterns in your company. You will be able to pinpoint inefficiencies and reduce costs.

Call Accounting

This feature is more suited to large businesses as it allows you to monitor employee calls and allocate costs.

Tips on How to Choose a System and its Features

You can choose hundreds of features for your phone system but did you know that most companies actually use only 5-10% of these features. It’s a good idea to focus on the functionalities that will benefit your business the most. These should improve your communication and efficiency. You don’t need a lot of features as it is easy to get lost and waste time going through them. Don’t compare phone systems, instead examine how a system will actually be used in your office and then make decisions based on this.

All types of systems nowadays have all the core features that a company needs such as call transfer, hold, pickup and paging. However, they have different limitations. When you have narrowed down your choice, request for a product demonstration from the suppliers so you will really see if it will be useful in your organization.


Author: Yazz

Yazz is a trained telecommunications engineer with a diploma in telecommunications. He has spent the last 15 years working for Telefonica, one of the largest telephone operators and mobile network providers in the world.