Difference Between PSTN and VoIP PSTN vs VoIP

VoIP Phone System

VoIP Phone System has multiple features which keep it ahead of PSTN in terms of business communications and helps to increase productivity. Although a relatively young in comparison to PSTN, VoIP has made remarkable progress in a short duration.

VoIP or Voice over Internet Protocol is the transmission of voice calls over the internet. Here the audio signals covert to digital packets and are transmitted over the internet. Upon reaching their destination they transform back to the audio signals which the recipient hear.

While PSTN uses a circuit-switched network, VoIP Technology uses a packet-switched network. In a circuit-switched network or connection-oriented networks, there is a dedicated route between the source and the destination. In packet-switched network or connectionless network, audio signals (for VoIP) are transformed into packets and these packets are individually routed from the source to the destination.



Public Switched Telephone Network or PSTN is the traditional form of telephony where direct lines are connecting the caller and the recipient. This traditional circuit-switched telephone network has been a reliable form of communication. However, in recent years, their popularity has nosedived. This is because of the changing scenario and the growing popularity of VoIP.

Why did the PSTN decline?

The decline of PSTN is directly related to the increase in global VoIP usage. In the beginning, the quality was the main issue in VoIP Phone System. But gradually with the coming of faster internet speeds and improvement in technology, the number of VoIP users is growing constantly.

After reaching a peak of 1.29 billion in 2008, the number of fixed-line subscribers for both VoIP and PSTN has started declining. During this time, while the PSTN declined at a rate of 4% per year, the mobile VoIP subscribers grew at the rate of 18% accelerating the decline of PSTN.

VoIP Phone System

Present Day Business Communications

Communication has changed radically in the last 10 years. And these changes have affected business communications as well. Technological advancements are striving to bring out more user-friendly features and businesses have benefitted from it. Also to stay ahead in the competitive industry, your business needs to adapt to these latest developments. As a result, the whole scenario of business communications has undergone a huge revolution.

Some of the latest business communication trends are:

  • Unified Communications
  • Digital Workspace
  • Real-time communications
  • More usage of mobile devices
  • Cloud-based Apps
  • Integration with other technologies

The one thing that is prevalent from all the latest trends in the use of the internet. Almost all communication modes depend on the internet. Calling, Messaging, file sharing, conferencing and many more all pointing to the Internet Telephony or VoIP.


Benefits of VoIP Phone System for a Business

VoIP today is an important part of the telecommunication world. It has benefits for both individuals as well as organisations, businesses, multi-national companies and more. This is mainly due to its features. Ranging from dirt-cheap voice calls to latest real-time video calls and conferencing, from instant messaging to file sharing, the features of VoIP represent the technological advancement.

In addition to this, these user-oriented and user-friendly features are evolving constantly, with new adjustments and upgrades are being added constantly. And with all these benefits, VoIP in today’s world is the go-to technology for all type of communications.

For a business to be successful, communication needs to be strong. And VoIP Phone System provides all of that and more. A faster, secured way of communication along with the feature of mobility is what makes VoIP the most popular option.


Top 5 benefits of VoIP Phone System for Businesses



Cost is one of the major deciding factors which has played hugely in favour of VoIP. The cost of a VoIP Call is negligible in comparison to the PSTN call charges. In addition to this, with a certain set of factors, one can even make VoIP Calls for free which is not possible for PSTN.

Further, the cost of installation, configuration and maintenance of the VoIP Phone systems is much lesser than PSTN. As the VoIP Phone system is software-based, there is no requirement for any heavy infrastructure. This saves further maintenance cost.


Scalability & Mobility

PSTN is a fixed-line phone system. Therefore to add an extra phone line, one has to repeat the entire installation process. This limits the freedom of adding lines without incurring additional charges. VoIP here comes to rescue. The scalability factor of VoIP Technology allows businesses to expand and reduce as per their requirement without any additional costs.

The feature of Mobility allows businesses to function even on the go. Therefore, organisations can use this feature to include remote talents who can work from home using VoIP.


More effective communication – real-time audio/video call & conferencing

VoIP Phone System offers multiple ways of communication like calls, conferences, messages, file sharing, real-time communications and more. And for businesses to perform smoothly they require a more efficient mode of communication. A faster mode of communication with VoIP helps organisations to manage and function seamlessly.

For multinational companies, the feature of conferencing is a huge help. It saves both time and money spent in arranging the conference. Thereafter, concerned personals can join the conference from their location and converse in real-time.


Integration with other systems

To enhance operational efficiencies, businesses utilize a wide range of other systems and technologies. VoIP Technology can easily integrate a variety of existing business systems.

Therefore, organisations can include all the benefits of a VoIP system without any modification of the existing applications or IT infrastructure. Integration of VoIP with cloud offers another set of benefits. In this data is securely stored in the virtual servicer which is accessible over the internet.


Additional Features

While the acronym for the word stands for Voice over Internet Protocol, VoIP Phone System is much more than just Voice call over the internet. Features like caller ID, virtual numbers, contact lists, voicemail etc. find better ways of implementation to improve the operational efficiency.

Businesses can add or eliminate features according to their requirements. While VoIP Service Providers usually offer a general set of features in a package, options for customisation are also available.

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