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What is the Public Switched Telephone Network (PSTN)?

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Here we will look at the public switched telephone network in detail. We will highlight important terminology, technology involved, costs, and alternatives to consider.

What is the Public Switched Telephone Network?

Public Switched Telephone Network or PSTN is a telephone service that connects various residents and businesses through underground copper wires. This type of phone service is also called plain old telephone service (POTS), a landline, and fixed-line telephones. Furthermore, this phone service has been widely used across the world for generations. However, advancements in telecommunication have resulted in a decline in demand for PSTN lines.

PSTN Terms Explained

To understand how PSTN works, you first need to familiarize yourself with important PSTN terminology. Here are terms to know:

1. Circuit switching
For voice to move from one point to the next, it needs to be converted into voice signals. These signals are transmitted through copper wires. However, to transmit to the destination successfully, they need a dedicated switch. Circuit switching is the act of operators plugging wires into a common panel so as to establish a connection between the two parties. They do so by plugging the caller and receiver’s wires into the same wire (also called a trunk).

In simpler words, when calls are made, the switches create a circuit between two phones and maintain the connection for the duration of the call.

2. Central office
A central office (CO), local exchange, or switching exchange consists of one or more exchanges. In fact, it may have as many as 10,000 lines. A central office hooks its subscribers to a PSTN line. All phones within an area connect to a local exchange located in the area.

When a local call is made, the call is sent to the local exchange and is then routed to the supplier. Since this is a local call, the call does not leave the local exchange.

Example: Calling a business located in the next building or block from your building.

3. Tandem office
A tandem office or junction network covers a larger geographical area and hosts multiple local exchanges. When you make a local call to someone in a nearby suburb or region of the same city, the call goes to your local exchange then to the tandem office which will then route it to the local exchange of the receiver’s location.

Example: Calling a business located in the next suburb but within the same city.

4. Toll office
A toll office is responsible for national long-distance switching. All tandem offices connect to a toll office. When you call an office or resident in another city, the call is switched via the toll office. This was common before the Bell System Divestiture.

Example: Calling a business located in another city or state within the same country.

5. International Gateway
The international gateway is responsible for international switching. This makes long-distance and international calling possible.

Example: Calling internationally.

Hows Does a PSTN Line Work?

A public switched telephone network combines phone networks across the world. These include:

  • Telephone lines
  • Cellular networks
  • Fiber optic cables
  • Switching centers
  • Cable systems

All these elements together make it possible for phones to communicate with each other. In other words, on dialing a contact, the call flows through a network and reaches the appropriate destination. This is the journey your call takes when using a PSTN line:

1. When you dial a number, your phone converts sound waves into electrical signals which are then transmitted to the terminal over a cable.

2. The terminal sends these signals to the CO.

3. The CO routes the call through a fiber optic cable to the final destination.

4. The call is routed to a CO or tandem office based on the type of call.

5. When the call reaches the appropriate destination, it is changed back to an electrical signal and routed to the terminal which then routes it to the appropriate number.

6. When the call reaches the receiver, the electrical signals are transformed back into sound waves.

Now while this journey seems complicated, it all occurs only within a few minutes.

PSTN Service for Business

When setting up a PSTN system for a business, you will be required to get a line for each employee. A small business with less than 10 employees might find this phone setup suitable. However, once your business size increases, you will need more lines leading to more costs. Generally, PSTN phone services charge about $20-$30 per month. This, however, does not factor in costs for set-up, maintenance, additional lines, handsets, and communication features.

Large corporations with more than 40 employees may find a private branch exchange (PBX) system more suitable. A PBX system converts your business into a central office. It also makes features like call transfer, conferencing, IVR, voicemail, etc., accessible. External calls are routed to your local exchange. And internal calls route through your PBX.

Most businesses prefer a PBX system to manage calls efficiently. However, an in-house system can lead to further expenses such as:

  • High set-up and installation fees
  • Software and hardware costs between $2000-$4000
  • Monthly in-house maintenance (hiring of an IT team, regular updates, etc)

All of this can lead to a heavy monthly bill.

PSTN Alternative: Hosted PBX and VoIP

However, there are alternatives such as hosted PBX and VoIP phone systems. Hosted PBX is a PBX service run by a third party business. You will not be responsible for regular maintenance or need to hire an IT team. Plus installation fees are much lower without the need to install heavy software and hardware on-site.

Additionally, you may also consider a voice over IP or VoIP phone system that routes calls through your internet or DSL connection. VoIP uses the internet instead of cable wire and therefore, you do not require a local exchange to make VoIP to VoIP calls. A call to a PSTN line, on the other hand, will require an exchange.

Additionally, instead of using circuit switching, business VoIP uses packet switching. When a number is dialed from the VoIP line, voice is converted into digital data or a packet which is then sent to the router. This router transmits the packet to the router closest to the recipient. This means that data is sent and received when needed and a dedicated line is not required. VoIP and packet-switching make business communication cost-effective and boosts productivity.

Choosing a Business Phone Service

Deciding on a business phone service can be overwhelming. However, it is crucial to find the ideal system for your business needs. Call us to learn more about how our outbound calling service can improve business communications or whether PSTN is the service you need.

POTS: Plain Old Telephone Service Explained

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Wondering what POTS or plain old telephone service entails and whether that is the best  phone service for your business? Look no further. Here we explain how plain old telephone service works and the key terms to understand.

What is Plain Old Telephone Service?

Plain Old Telephone Service (POTS) refers to a phone line or traditional phone service which works through physical wires. This type of phone service enables analog voice transmission over copper pair wires. A POTS line is able to transmit voice messages across different countries and continents. Because of these abilities, POTS has been the standard phone service for individuals and businesses since its inception in the 1880s.

However, the creation of voice over IP or VoIP phone systems has seen a gradual shift to cloud communications, especially for business communication.

How Does a POTS Line Work?

Originally, transmission and communication between two points relied on an operator to connect them to the right place. With this technology, long-distance calling was more expensive than short-distance calling.

However, POTS automated the switching ability so that operators were unnecessary to the process. A POTS line works through copper wires connecting various points together. The phone service establishes a dedicated circuit between two points for the time of the transmission.

With a plain old telephone service, businesses are connected to central offices located nearby. And the central office, in turn, connects to long-distance offices or residents. This made communication transmission more digital and less manual. And it reduced the cost of long-distance communication. To connect parties, a call routes over one or more switches operating on local, national, or international levels.

Plain Old Telephone Service Technology

Some common terminology associated with POTS phone system technology are:

1. Circuit Switching
Now voice by itself cannot move through a POTS line. Sound waves need to be converted into electric signals to pass through the network. Copper wires are able to transmit analog signals, however, they need a dedicated switch to travel through. While dedicated circuits are reliable, the line is reserved for only one call.

Circuit switching required operators to plug wires into a common patch panel to connect two parties. Connections that required two exchanges would need two operators to plug the caller and receiver’s wires at the same time into the same wire called a trunk.

Then came automated switching which worked by responding to signals from a calling device. This type of switching eliminated the need for operators.

This switching was later replaced by the crossbar switch which is an assembly of switches among a set of inputs and outputs. This is a switch as each crosspoint. When this switch is closed, it enables the connection between one of the inputs and one of the outputs. This technology used common control networks that enable the switching network to conduct tasks such as call processing, monitoring, operation, etc. However, these devices were complicated and costly, as well, leading to the creation of the transistor.

2. Transistor
The transistor gave rise to digital networks enabling phone lines to carry digital signals in “packets.” Packets do not need the transmission channel to be an open and dedicated circuit. Instead, it transmits voice and other messages independently through the switches.

3. Modems
Modems were created to support the transmission of digital signals without overwhelming the system. Types of modems include:
DSL or Digital Subscriber Line enables data transmission over POTS lines. To do so, a transceiver connects to your PC and uses the local phone network to connect to an ISP network. This enables your use of the internet. This type of modem is useful to small businesses.
ISDN or Integrated Services Digital Network allows voice and data transmission over a regular phone line. To enable a connection, users dial in. And the fees for such service rely on the duration of the transmission. Large companies or businesses looking to expand in the future may find this modem more suited.

Plain Old Telephone Service for Business

Compared to VoIP or cloud phone systems, POTS may seem like the more expensive option. However, in areas where cellular or internet coverage is slow or inaccessible, copper lines are more reliable. When all else fails, you’ll find a POTS phone system to rescue you.

A basic plain old telephone service costs between $15-30 a month for unlimited local calls. One must keep in mind that other elements factor in as well, such as:

  • Setting up infrastructure — The larger the business, the more set-up costs, plus the technician and maintenance cost.
  • Additional features cost more — Intercom, call transfer, directories, etc.
  • International calling — If your business conducts international business on a regular basis, then this bill can grow quite a bit.

POTS vs VoIP

Most businesses in the modern era are switching from POTS to IP telephony such as a VoIP phone system or cloud PBX. Voice over IP uses your existing internet connection to transmit voice and data from one party to the next. VoIP makes it possible to connect remote offices and keep communications stable. It also comes equipped with features such as IVR, call forwarding, dynamic caller ID, softphones, etc. Plus, it reduces international calling costs as costs are not based on distance and time but on a monthly subscription.

Which is Right for Your Business?

Does your business need a POTS or VoIP phone system? This depends on what your business communications entail, the size and budget of your business, as well as future expansion plans. Speak with one of our experts to identify the right outbound calling service for your company. Call us at 1 (877) 898 8646 to learn more!