Blurring the Boundaries

The advent of IP-Centrex will blur the clear distinction between Centrex services and PBX systems in two important ways. With conventional Centrex, call control and switching take place in the CO on telco premises, or in the generally much smaller PBX, both processes occur on the customer's premises.

In a fully IP-Centrex environment, call control remains at the controller in the carrier's CO building, but much of the call switching is done in systems (such as Ethernet switches or routers) on the customer's site. The "payload" packets for an IP telephony call between two phones within the same building will not travel outside the building. In current Centrex systems all voice traffic flows over the local loops from the user's phone to the CO and then either back into the building to another user or off to the PSTN.

The second change, which is already happening, is that service providers (including smaller competitors) can acquire IP-PBXs to provide Centrex-like services, rather than buying a much more expensive CO system. In this way the barriers to entry into the IP-Centrex business are dramatically lower than they were previously.