What is a telephone exchange system?

  A telephone exchange system is the intersection of two telephone lines. This is because a direct phone line between two organizations does not actually exist. Think of it like riding the subway-sometimes you can't go directly to your destination. Instead, you have to switch lines at an interchange to get there.
  How does the telephone switching system work?

  The public switched telephone network is a wired system through which landline calls are made and received, and the circuits are based on successful circuit switching. In order to connect one telephone to another, the telephone will pass through a number of exchanges operating on local, regional, national or international systems.

  Simply put, a telephone exchange connects your line to the receiver's line to form a circuit-which is itself a connected telephone.

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