VoIP has completely transformed the communication space across the globe. But how does this option compare to the well-known and traditional PSTN solution? In this blog, we’ll explore VoIP, its working mechanism, and how it compares to PSTN. We’ll also explain the advantages of VoIP over PSTN so you can choose the best option for your communication needs.
What Is VoIP?
VoIP stands for Voice over Internet Protocol. Unlike PSTN, it does not rely on copper infrastructure and opening/closing circuits to connect calls. Instead, it converts your voice into data packets and sends them continuously over the internet.
Other names for PSTN include POTS (Plain Old Telephone Service) or a simple landline, which only provides calling services via wires connected over the ground. There are many reasons why businesses are choosing VoIP over PSTN. Let’s start by discussing the advantages.
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Main components of a VoIP system
Let us first discuss the main components of a VoIP network. Understanding these will help us better plot the working mechanism of a VoIP call.
- VoIP Endpoints: These are the devices that connect to the digital network to make and receive calls. These include IP phones, softphones (software on a computer or smartphone), and Analogue Telephone Adapters (ATAs) that allow traditional phones to connect.
- The IP Network: This is the digital connection from the provider’s service and the customer’s local network. This connection is comprised of internet protocols and utilises Ethernet cables, or Wi-Fi, to connect each customer’s device.
- Call Processor: This is the basic element of a VoIP network. It is a software-based switch that does the work of managing call signalling, routing, and features and tells endpoints how to connect over the network.
- The VoIP Gateway: It is the bridge that connects the VoIP network to other networks, like the traditional PSTN. It translates digital VoIP packets into analogue signals for the PSTN, and vice versa.
How does a VoIP call work?
Here is how the four components work together to complete a VoIP call:
1. The Call is Initiated
You start the process by opening your VoIP endpoint (your softphone application). You type in the number or name you want to call and press the dial button. The application prepares to convert your voice into digital data.
2. The Signal Travels the IP Network
Your call request is converted into a digital signal (like a data packet) and travels over the IP network through your Wi-Fi to your router, which sends it out to the internet. This digital signal is routed over the internet to the IP PBX. The call processor receives the request, authenticates your device, and understands you want to make a call.
3. Destination is Provided and Routed
The IP PBX processes the number you want to reach. If the recipient is another VoIP user on the same network, the IP PBX finds their device’s network address. However, if the number is on the PSTN, the IP PBX routes the call signalling to the VoIP Gateway.
4. The IP PBX and Gateway Manage the Connection
Unlike PSTN, a VoIP call does not create a physical circuit. Instead, it sends commands to your VoIP endpoint and the recipient’s device to exchange voice data packets directly with each other over the IP network. If the call is to the PSTN, the VoIP Gateway translates the commands and voice packets into a format the PSTN can understand.
5. The Call is Connected
When the recipient answers the call, their device confirms this to the IP PBX. Your analogue voice is now converted into many small digital packets and sent directly over the IP Network. The receiving device collects these packets and converts them back into an analogue sound you can hear.
What Is PSTN?
PSTN stands for Public Switched Telephone Network. It’s another term for traditional analogue phone systems or landlines that connect calls through copper networks. In the UK, BT plans to switch fully to VoIP (digital-based calls) by January 2027.
To fully understand the distinction between the two, it is important to look at how both technologies work differently.
Main components of a PSTN network
The main PSTN mechanism relies on dedicated circuits between local exchanges, which connect calls in their respective areas. Its main components are:
- Customer’s precise equipment: These are the devices that are connected to the traditional landline network owned by the customers. These include telephones, the internet modem, handsets, and any other devices necessary for the connection or additional equipment. Basically, this makes up the basic hardware to send and receive calls.
- The last mile: It is the connection between the provider’s local exchange and the customer’s network. This connection is made up of copper wires, which then extend into the customer’s location to connect to each device. The more devices, the more connections there will be from the provider’s network to the customer’s site.
- Switches: These are the main elements that build the PSTN framework. They do the work of opening and closing circuits to connect a call to the right person.
- Transmission media: These are the wires used throughout the connection and in the last mile, too. These are usually copper in the case of PSTN.
How does a PSTN call work?
Let us see how the four main components of a PSTN network come together to carry out a call:
1. The Call is Initiated
You pick up your customer’s precise equipment (your telephone handset). This action closes an electrical circuit in the phone, which sends a signal down the copper wire that you are ready to make a call.
2. The Signal Travels the Last Mile
This signal travels over the last mile over the dedicated pair of copper wires that physically connect your home to the telephone provider’s building.
3. The Switch Receives the Request
The last mile copper wires terminate at a switch in the provider’s local exchange. This switch detects your signal, understands you want to make a call, and then provides a dial tone back to you through the same transmission media (copper wires).
4. The Switch Opens and Closes Circuits
This is the core function. The switch uses the dialled number to determine which specific last-mile copper wire line it needs to connect to. It then physically opens the electrical path to your line and closes a new, temporary electrical circuit that connects you and the recipient. This creates a continuous electrical path.
5. The Call is Connected
The switch now sends a ringing current over the last mile to the recipient’s telephone. At the same time, it also sends a ring-back tone to your phone, so you know that it is ringing.
When the recipient picks up their handset, their action completes this circuit. The end-to-end connection is now fully established, and your analogue voices can flow as electrical signals over the path formed by the two last-mile copper lines connected internally by the switch.
When either end of the line hangs up the handset, it breaks the circuit. The switch detects this break and opens the temporary circuit it had created and drops the connection. The transmission media of both last-mile connections are now free and ready for new calls.
VoIP vs PSTN: Comparison of Advantages
VoIP offers several benefits over traditional PSTN. For a clear comparison, we’ve looked at the main factors that matter most in any communication system, like affordability, scalability, reliability, call quality, and more.
| Feature | VoIP | PSTN |
|---|---|---|
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Cost |
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Security |
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|
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Scalability |
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Requires physical lines for each new user |
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Maintenance |
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The majority of on-site technicalities involved |
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Call quality |
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Reliability |
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Limited and costly backup options |
Lower costs
The subscription costs for VoIP services range from £7 to £50 per user. Packages at the lower end include only the basic VoIP features, such as calling and call forwarding. As the price increases, so do the features available in the package. In addition to the service plan, consumers also need to purchase essential VoIP equipment, which may include smartphones, adapters, internet cables, headsets, and routers.
VoIP systems are especially cost-effective for international calling, as they do not require a physical connection between two locations, unlike PSTN. This is one of the main reasons why international calls are cheaper with VoIP, helping businesses cut costs significantly.
Security aspects
VoIP relies on advanced encryption technology to protect data as it travels over the internet. However, it is still important to remember that anything transmitted online remains vulnerable to cyber threats and data leaks. That said, protection methods are reliable, so businesses should invest in necessary firewalls and take proactive steps to secure their VoIP networks.
In contrast, security measures for PSTN networks are far more limited. Phone calls can be tapped with PSTN, as the whole connection relies on copper telephone lines. Such traditional landline systems also lack the range of encryption methods involved in digital communication methods like VoIP technology.
Easy scalability
VoIP users can be added or removed easily, whether on a temporary or long-term basis. There is often no need to purchase new hardware for additional users, because application-based softphones can be installed on existing devices. Once the core team is equipped with the necessary hardware, extra users can be managed flexibly without major setup costs.
In contrast, PSTN systems require a new physical line to be installed for each additional user. Similarly, if a line is no longer needed, it must be formally disconnected. Otherwise, the business will continue to be billed for that connection.
Maintenance requirements
VoIP systems require very little on-site maintenance. The provider can handle most tasks remotely. This leaves businesses with minimal concerns about managing or accommodating maintenance activities.
Call quality
The quality of a VoIP call largely depends on the strength and stability of the internet connection. A major factor that supports call quality is the use of codecs, which compress and decompress voice packets. This process reduces signal loss over long distances and helps maintain clarity.
In contrast, the quality of a PSTN call is generally lower than that of VoIP. This is because voice signals travelling via copper lines experience energy loss and degradation over long distances. Even short calls can be affected, because call quality varies with the condition of the copper wiring and the supporting infrastructure.
Service reliability
VoIP calls provide reliable communication solutions for businesses. Even in the case of disruptions, you can configure backup options so that if an issue arises, it activates immediately and minimises downtime.
In contrast, PSTN systems offer limited or costly backup options. This is because both the primary and backup connections require physical wiring, making them less flexible and more expensive to maintain.
The PSTN network has been a reliable choice for a long time, but with its limitations and the upcoming 2027 switch-off, VoIP is now the top communication choice for UK businesses.
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FAQs
Yes, VoIP is cheaper than PSTN because it does not rely on physical copper connections for each line, which lowers total connection costs by a substantial margin. Calls are transmitted over the internet, which means no need to pay for rental prices or high international calling charges.
VoIP offers higher security than the traditional PSTN network because it relies on advanced encryption technology. Providers set up additional firewalls and security tools to prevent cybercrime, data theft and information leakage during calls. However, physical wires can be tampered with in a PSTN network with no space for implementing any digital protection strategies.
In the case of VoIP, the call quality depends on the bandwidth of the Internet. Analogue voice signals remain consistent even over large distances due to the high-speed nature of a digital connection, which preserves the call quality with minimal energy losses.
