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What is the Difference Between VoIP and PSTN?

PSTN versus VOIP

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Choosing a business phone system for your communication needs is an important step in developing strong customer relationships. It can be hard to choose the right business phone system, unless you understand the difference between VoIP and PSTN. Here we will look at how these phone systems differ so you can make a better decision for your company.

Understanding the Difference Between VoIP and PSTN

Technology has advanced greatly over the past two decades, enabling exceptional options for businesses in regards to their communication systems. When researching business phone systems for your communication needs, you will come across voice over IP (VoIP) and public switched telephone network (PSTN) as two major options. But how do you decide which is better for your communication needs? Here we will look at the difference between VoIP and plain old telephone service.

How Does VoIP Work?

Voice over IP or VoIP, transmits voice messages via the internet. With VoIP, voice gets converted into digital signals and then get transferred from one end-point to the next using secure network protocols. Upon reaching the recipient, the signals get converted back to voice messages.

Since VoIP is not attached to a physical line, users with a VoIP phone system can make and receive calls from any location and any device. All they need is a stable internet connection. Additionally, VoIP numbers or virtual phone numbers also route calls over the internet, letting companies do business with target countries without increasing expenses. You also get access to a suite of cloud communication features.

VoIP system costs are considerably less, as well. Users can easily scale up or down, as needed, without buying new lines or paying for additional equipment. In fact, there are no set-up or installation fees. And you won’t even need new equipment. VoIP proves to be more cost-effective, especially considering the features available and international calling.

voip vs pstn

Is IP Better than PSTN?

PSTN connects callers through a circuit-switched telephone network. This type of phone system has been used for years. When used, calls are transmitted through a network from one end-point to the next. The call quality is generally excellent.

Businesses using PSTN will need a different physical phone for each employee. The costs for desk phones can skyrocket to $300 per phone! Plus, you must then deal with installation and clunky hardware.

On the other hand, the cost for one SIP trunk ranges from $20-$30. This can be used by many employees. Plus, there’s no any set-up/installation and maintenance costs.

Small businesses with 10 or fewer employees can benefit from a VoIP phone system. However, even when the business size grows, they would be better served with a cloud PBX.

VoIP Versus PSTN: Difference in the Systems

So, what is the difference between VoIP and PSTN? Let’s have a look:

Price More affordable than PSTN (even with international calling and virtual communication features) Expensive; especially for international communication
Connectivity Uses the internet; make calls from anywhere at any time Uses a landline; makes calls via the landline only
Flexibility Highly customizable; add/remove multiple phone numbers and extensions; use features as needed Structured with copper wires; has less customization
Mobility Can make and receive calls from any location and any device Can make and receive calls from one location
Features Loaded with advanced calling features PSTN offers: Make and receive calls

Related: How Does VoIP Connect to the PSTN?

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