Integration with On-Premise Switches

Many Centrex lines are rented, instead of regular business lines, to link KTSs to the Public Switched Telephone Network (PSTN). While the features that are available with Centrex may complement the capabilities of the KTS (which are typically used in offices with fewer than 30 lines), the common motivation for this application is the attractive rental rates, because of discounts that are available with Centrex, taking into account the number of lines attached to one CO and the duration of the contract. An organization with more than 100 lines served by one CO and a 3-year contract can obtain an almost 40% discount from the monthly, single-line tariff. These types of contracts are not generally available with conventional, non-Centrex, business lines (which are rented on a month-to-month basis). Centrex lines that are provisioned with the ground-start signaling compatible with PBX systems are also available from some telcos as an alternative to analog trunks.

The attractive margin of up to 50% offered between the short-term, single-line tariffs and those for a 1,000-line and 5-year package have given rise to a significant Centrex reseller business. In this market a competitive local exchange carrier (CLEC) leases a large number of Centrex lines on a wholesale basis and rents these to small businesses and organizations (such as a school board or a bank) with a number of offices in a given area. Two cautionary notes should be sounded, as some Centrex resellers have proven to be financially unstable and the incumbent carrier (ILEC) continues to control the service, rather than the reseller.