The circuit presented here can be used for connecting two telephones in parallel and also as a 2-line intercom.
Usually a single telephone is connected to a telephone line. If another telephone is required at some distance, a parallel line is taken for connecting the other telephone. In this simple parallel line operation, the main problem is loss of privacy besides interference from the other phone. This problem is obviated in the circuit presented here.
Under normal condition, two telephones (telephone 1 and 2) can be used as intercom while telephone 3 is connected to the lines from exchange. In changeover mode, exchange line is disconnected from telephone 3 and gets connected to telephone 2.