PSTN vs VoIP - How to determine which technology is better for your business

PSTN vs VoIP - How to determine which technology is better for your business
Last Updated on March 8, 2021

How are calls made all over the world? There are multiple technologies that connect people and business together, however; a simple telephone call relies on a complex system and there are multiple technologies available to send and receive phone calls. The two most popular technologies available are standard Public Switched Telephone Network, or PSTN and the other technology is Voice over Internet Protocol, or VoIP. Which technology is better?

This article will examine both PSTN and VoIP, discuss the differences in the technology and determine which technology is best for your business.

What is PSTN?

A Public Switched Telephone Network, or PSTN, is also referred as a Plain Old Telephone Service, or POTS. Landline telephones rely on this wired system to make calls. Connecting a call between two telephones is referred as completing a circuit. To complete a circuit, a telephone call is routed through several switches located locally, nationally or internationally using a method called circuit switching.

In the early days, telephone calls relied on copper wiring to connect two telephones together to create a call. Operators sat in front of switchboards connecting two pieces of copper wire together so the telephone call could travel from one destination to another. Manual switching has been replaced with automated switching and the copper wires have been upgraded to fiber-optic cable.

How do PSTN telephone lines work?

A PSTN uses several network systems located all around the world. This includes cable systems, cellular networks, switching centers and fiber optic cables telephone lines. When a user places a call through a standard telephone the call moves through the network to connect to the recipient using the following steps.

  1. When the user places a call, the telephone converts the sound into electric signals and transmits the signal to a terminal over a cable.
  2. The terminal collects the signal and transmits it to the Central Office, a local or switching exchange that may have thousands of lines. The Central Office connects its subscribers to a PSTN line.
  3. The call is sent to a regional hub to be transmitted to a distant Central Office, or straight to another local Central Office.
  4. The receiving Central Office sends the call to the receiving terminal and routes the call to the appropriate receiver.
  5. When the call reaches the receiver, the electrical signals are converted back into sound.

When the signal reaches a business office, this is called the central trunk line. The call is then sent to the company’s Private Branch Exchange, or PBX system, through the central trunk. If the employee has an extension, the PBX routes the call to that specific extension.

PSTN Network Connection
Public Switched Telephone Network (PSTN)

What is a PBX?

A Private Branch Exchange, or PBX, is a telephone switching system used by private companies and organizations. The system receives calls from external sources and routes the caller to the recipient. A PBX allows a business to share the central trunk lines to a business and provides the internal communication between the phones of the organization. This allows employees within an office to communicate with each other without the need for additional external phone lines. The intercommunication within an office is facilitated by the PBX to allow two or more phone extensions to directly connect with each other without the need to access an outside line. This allows the company to reduce the number of telephone lines needed to make calls outside the office.

There are several PBX manufacturers and the phones connected to the PBX may be analog, digital or VoIP. Businesses that are considering a call recording system should determine what brand of PBX their office is using because it allows the call recording company to determine the proper solution to meet the company’s needs.

What is VoIP?

VoIP is an acronym for Voice over Internet Protocol and allows users to place and receive phone calls over an internet connection as opposed to using traditional landlines. VoIP calls are made from devices that are directly connected to the internet. These devices may look like traditional office phones, cellular phones or may be an application running on a computer.

What are the advantages to VoIP?

There are many advantages for companies to use VoIP devices such as:

  1. There is no need to purchase additional on-premise hardware such as a PBX system to route calls.
  2. A VoIP device is mobile. Unlike an office phone that is connected to a landline, the user may take the VoIP device anywhere. This allows the user to make and receive calls from work, at home or anywhere as long as there is an internet connection.
  3. Most VoIP service providers offer a smart phone or laptop/desktop application to make and receive calls to further reduce hardware costs.

What are VoIP service providers?

In order for VoIP devices to make and receive calls, they need to connect to a VoIP service provider. The VoIP service provider will use a series of servers to make a connection from one VoIP phone to another VoIP device, connect the call to the PSTN to perform a VoIP call to a landline or cellular phone, or convert a landline or cellular call to a VoIP device.

Hard Phones vs Soft Phones

There are two different types of devices that use VoIP, hard phones and soft phones. A hard phone looks like a traditional office telephone, however; it uses an ethernet cable to connect to the internet. Soft phones are applications that are downloaded into your computer or smart phone and gives the user the ability to make and receive calls from that device.

How do VoIP calls work?

  1. When a user attempts to make a call using a VoIP device from either a hard phone or soft phone. The device signals to the VoIP service provider to begin a connection to the recipient.
  2. The VoIP service provider sends digital data packets from the VoIP device and establishes the call.
  3. Depending on the recipient, the VoIP service provider can convert the digital packets and route the call through the PSTN if the receiver is not using a VoIP device. If the receiver is using a VoIP device, the device converts the digital signal into sound for the receiver to hear.

VoIP Security Threats

It is important to note, VoIP is vulnerable to the following online security threats.

  1. Denial of Service – Occurs when an attacker floods a VoIP system with a large number of calls with the intention of overwhelming and crashing the system.
  2. Toll Fraud – An attacker gains access to a company’s VoIP system and makes expensive long-distance calls.
  3. Eavesdropping – When an employee makes a call on an unencrypted or unsecure internet connection, attackers can monitor the conversation and collect sensitive information.

These are just a few examples of VoIP Security threats and there are many more.


As discussed, PSTN uses circuit switching to connect telephone calls as opposed to VoIP which uses data packet switching. This isn’t the only difference between the two technologies. The two technologies are compared in the table below.

Connectivity and SwitchingDedicated lines are required for circuit switching and transmissionUses the internet for packet switching to send and receive calls
Power SourceHard wired telephone lines will remain active during a power outageWithout a backup electrical source, loss of power will disable the ability to make or receive calls
Emergency Services911 calls will allow emergency responders to trace the exact location of the caller’s source911 calls will not always be traced to the exact location of the caller
BandwidthReserved in advance, 64kbps, highly stable, dropped calls rareUnreserved 10kbps minimum, calls will drop with unstable internet service
SecurityHighly secure with dedicated telephone linesDepends on the security of the internet connection, see VoIP Security Threats
Soft PhonesSoft phones are unavailableSupports soft phones
IntegrationDoes not support third party integrationsDepends on the third-party software, VoIP may integrate with applications such as email, CRM and other various programs.
Call Recording CompatibilityCall recording is capable with call recording software, see our Record Analog Phone Lines page.

Other PSTN(circuit switching) lines are T1/E1, ISDN and other.
See Available recording configurations page.
Call recording is capable with call recording software, see our VoIP Call Recording page.

See Available recording configurations page


When you examine PSTN technology, it has many advantages over VoIP. The fact that PSTN lines will continue to work during a power outage, emergency services can pinpoint the exact location of the caller, service and call quality are stable are just a few advantages of PSTN. VoIP has many advantages as well. The feature of mobility where a user only needs an internet connection and they can take their VoIP device anywhere from home, to work or even a coffee shop is a major advantage. The two technologies are different and there is no better or worse choice. Businesses attempting to decide which technology to adopt should look at the features and benefits of both and determine which technology is the better fit for their company.

Previous Call Recording Articles:

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How to record your VoIP calls

Do you have a hosted PBX or cloud VoIP provider? Learn how to take advantage of having your calls recorded and stored locally.


How to record analog phone lines.

Discover how to connect and record from microphones, line audio or plain old telephone service (POTS) lines.

Last Updated on March 8, 2021