After its introduction, IP telephony was quickly adopted as a cost-saving and future-proof alternative to PSTN. According to the Hosting Tribunal, by 2021, the number of VoIP users had reached 3 billion, a significant achievement compared to just 2 million businesses still using landlines.
As companies continue to seek increased mobility and flexibility for their employees, the trend towards using IP telephony shows no signs of slowing down. Is it now time to officially retire PSTN?
What Is PSTN?
PSTN, or Public Switched Telephone Network, is an old-style circuit-switched telephone system known as POTS, or Plain Old Telephone System. Since the late 19th century, PSTN has been the backbone of public telecommunications and popularized landlines as the main personal and business communication method.
What Is VoIP?
Over the past 30 years, VoIP technology has rapidly progressed and established itself as a reliable and versatile solution in the telecommunications industry. Voice over Internet Protocol sends audio data as compressed packets over an internet connection, allowing for both making and receiving calls. On the receiving end, the packets are decoded and decompressed.
Differences Between PSTN And VoIP?
While both networks aim to facilitate successful long-distance communication, this is where their similarities end. PSTN and VoIP use distinct methods to reach this goal. For example:
Technology & Hardware
PSTN is a circuit-switched network that connects two points using copper wires to transmit analog voice data. It heavily relies on hardware components such as telephone wiring, switching centers, cable systems, and others to ensure clear sound transmission.
In contrast, VoIP is a packet-switched network that delivers real-time digital voice signals from sender to receiver through Wi-Fi or Ethernet. Users can make calls using an adapter connected to their landline, a specialized VoIP desk phone, or by installing a softphone on their mobile devices, tablets, or computers.
Traditional landline calls are billed based on distance and time, resulting in high and unpredictable monthly charges for frequent international callers, making it challenging to budget for telco expenses.
With VoIP, the surprise is eliminated with a standardized monthly or yearly subscription based on the number of users and desired features. It allows for customization to fit business needs and provides predictable monthly costs.
In addition, VoIP eliminates the need for significant infrastructure investments in hardware, wiring, and individual phone installations, unlike PSTN. IP telephony can utilize existing devices and internet connections, making it more cost-effective and eliminating the need for initial investments. It’s estimated that businesses can save up to 80% by switching from traditional circuit-switched networks.
IP telephony offers a wider range of features compared to PSTN’s limited call capabilities. VoIP goes beyond just making calls and maximizes each call with an extensive list of virtual features, including:
- Call transfer
- Call recording
- Call monitoring
- Call queues
- VoIP Fax
- Call routing
- Availability status, etc.
Some VoIP systems offer AI-powered tools like a digital receptionist to assist clients efficiently through automated commands, queues, and on-hold music. Business VoIP software allows auto-attendants to gather key caller information, enabling agents to personalize their approach to the customer’s needs.
Although PSTN is outplayed in terms of features and cost, it still sets the standards for the following:
- Security: VoIP’s reliance on the internet is both a strength and a weakness. Its setup is vulnerable to cyber attacks, making it less preferred by businesses handling sensitive information, who prefer traditional landlines.
- Quality: PSTN often offers a more consistent call quality compared to VoIP due to faster signal transmission through copper wiring and a lack of low bandwidth issues.
- Usability: The transition from PSTN to VoIP can be challenging, as landlines have been a familiar and trusted solution for many employees and managers.
VoIP boasts several advantages that are hard to beat, including its rich features and cost-effectiveness.
- Flexibility: With VoIP, you can choose from various devices, providers, SIP trunks, numbers, and country codes to customize your communication setup to your needs, providing unparalleled flexibility and control.
- Mobility: No dedicated infrastructure also means that the system can be adopted from anywhere, giving employees all the necessary tools to sustain their productivity.
- Scalability: Upgrade your subscription with just one click to align with your current business requirements, eliminating the need for expensive hardware replacements.
- Maintenance: Most VoIP maintenance is performed through automatic software updates, free and quick to install, taking only a few minutes.
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In conclusion, PSTN and VoIP are two distinct telecommunication networks that aim to facilitate long-distance communication. PSTN, a circuit-switched network, heavily relies on hardware components to ensure clear sound transmission and offers a more consistent call quality.
On the other hand, VoIP, a packet-switched network, utilizes the internet to send and receive calls and offers a wider range of features, greater flexibility, mobility, scalability, and cost-effectiveness, but with a lower level of security and consistency. In today’s rapidly changing business landscape, it’s no surprise that many companies opt for VoIP as their preferred telecommunication solution.