Centrex is a portmanteau of central exchange, a kind of telephone exchange. It provides functions similar to a PBX, but is provisioned with equipment owned by, and located at, the telephone company premises.
Centrex service was first installed in the early 1960's in New York's financial district by New York Telelphone. As of 2003, it was estimated that there were 20 million Centrex lines installed worldwide by 20 telephone companies, with the most installations in the United States (15 million), Canada (2 million), and Britain (1 million). This accounted for approximately 5% of all installed business telephone lines, worldwide.
In the United States, the usage of Centrex lines has fallen over the past decade from 16.5 million in 2002 to 10.7 million in 2008 as users transition to IP-PBX (through VoIP). Centrex continues to be used by large institutions, government agencies, and universities as most of the equipment has already been paid for, though leasing Centrex lines may be more expensive.
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