An extender is designed to be used for making phone calls without directly billing the caller. Most mid-size and large companies that operated from multiple cities/countries used them.

Extenders connect to a PBX that is normally exposed via a toll free number (1-800), or a local number that allows the user to dial out to long distance numbers without incurring long distance connection charges.

It’s basically how prepaid long distance cards work nowadays: You dial a number, enter a code, get a dial tone, then dial your long distance number to connect.