What is the PSTN and how does it affect your business?

The Public Switched Telephone Network (PSTN), the legacy telephony network that connects calls via physical phone lines, is being decommissioned around the world. The PSTN is scheduled to be phased out in most countries by 2030, which means that traditional landline phones will go out of service. Read on to learn how the PSTN works, its benefits and disadvantages, and what type of telephony system it’s being replaced with.

What is the PSTN?

The PSTN is a collection of interconnected public telephone networks that rely on physical infrastructure to connect phone calls. It’s the traditional “landline” phone network that uses circuit switching to connect calls via telephone poles and lines across the world. While much of today’s communications are transmitted via internet networks and satellites, the PSTN still uses copper wires and telephone lines to connect callers.

The PSTN is also known as the Plain Old Telephone Service (POTS), because it’s well-established and straightforward. It doesn’t rely on an internet connection, and it even works during power outages. However, the plain old service comes with plain old functionality: you can make and receive voice calls, but that’s about it. The PSTN does not support features like conference calling, call recording or intelligent call routing.

In recent years the telecommunications industry has seen a decline in demand for PSTN lines, particularly in areas where PSTN replacement is imminent. The PSTN is a global network of physical infrastructure, so the transition away from the PSTN to a predominantly digital telephony system is a massive undertaking.

Although the PSTN still uses telephone lines and copper wires, over the years it has shifted to take advantage of some new technologies. It no longer relies on human telephone operators to connect calls, and can connect to digital desk phones. Still, these upgrades are no match for the demands of today’s callers.

Voice over IP (VoIP) has been around for years, and is finally set to replace the PSTN. VoIP transmits calls over the internet, and it’s easy to scale and customize. As mobile network operators transition their infrastructure to run completely on VoIP, the PSTN will remain in effect.

PSTN network architecture

When you place a call on the PSTN, the call hits multiple touchpoints, or offices, before your call reaches the phone on the other end of the line. The call travels through physical wires to each relevant office—which varies depending on its final destination—and each office is equipped with physical infrastructure designed to send the call to the next office until it reaches its intended receiver. It’s not complicated, but the amount of infrastructure and touchpoints involved means it’s challenging to match the instant data transmission offered by modern telephony solutions like VoIP.

Let’s start by defining the offices involved:

Central office (CO)

A central office, also known as the local exchange, is usually made up of one or more offices that connect subscribers to a PSTN line. The central office a subscriber is connected to usually depends on their geographical location. The exchange then identifies the number being dialed, and routes it to the desired destination.

Tandem office

A tandem office, also known as a junction network, is a step up from the local exchange. It serves a larger geographical area, and is made up of multiple local exchanges. The tandem office has the capability of routing calls between local exchanges.

Toll office

When a number is dialed outside the geographical area of a local exchange or tandem office, it is routed to a toll office. The toll office is where long distance domestic calls can be made (e.g placing a call from California to New York).

International gateway

As the name implies, the international gateway is used to route calls outside of the country. When a foreign number is dialed, the international gateway manages the call switching and routes calls to the desired country.

With those key terms in mind, let’s break down how PSTN routing actually works.

PSTN routing and call flow

When you pick up the phone and dial, several things take place that enable your call to connect. Here’s how it works:

1. The caller picks up a phone, hears a dial tone and dials a phone number.
2. Once the call is received, the phone works to convert sound waves (your voice) into electrical signals that can be transmitted to a terminal via cables.
3. The electrical signals are then sent by the terminal to the central office or local exchange.
4. Once the central office receives the electrical signals, they are routed to the correct destination through cables in the form of light or electrical pulses, depending on the type of cable used. When the call reaches its destination, it is converted back to electrical signals and routed to the correct terminal.
5. Finally, the terminal routes the call to the correct phone number. Once the phone receives the electrical signals, it converts those signals back into sound waves, which allows for nearly instantaneous communication between callers.

Because of the way calls are routed, it’s possible to physically trace the origin of any call. This makes the PSTN ideal for use cases like emergency services—even if a caller is not able to identify or communicate their location, the 911 dispatcher can trace the call and send help to the correct place.

The PSTN alternative: VoIP

VoIP is the internet-based alternative to the PSTN. Like the PSTN, VoIP has global infrastructure. PSTN requires both local and global physical infrastructure to function, fundamentally in the form of copper wires. VoIP uses internet networks that are shared with other internet-based services. If you’re curious to learn how a VoIP network functions, we’ve explained it here.

VoIP has many advantages over the PSTN: you can create calling systems as simple or complex as your needs require, fitted with automations; conferencing capabilities; advanced privacy and security configurations; call recording, translation, transcription, and storage; integrations with other communications channels such as messaging or video; and much more—all on a network that is built to scale.

PSTN vs. VoIP

In most countries, VoIP will soon replace the PSTN. Australia is in the process of switching off their PSTN, New Zealand plans to switch off the PSTN by the end of 2023, the U.K will switch their PSTN off by 2025. Until then, users can decide which type of telephony solution they prefer. For businesses, finding a communications solution that meets its needs oncost, scalability and features is essential. If you’re considering whether or not PSTN or VoIP is the right solution for your business, here are some criteria you should take into account.

Cost

When it comes to pricing, there’s no question that setting up your calling system on PSTN lines will end up costing your business more. Not only will you inevitably have to switch to VoIP as countries around the world switch off their PSTNs—even today, hardware and technician costs add up. A small business can get stuck paying up to $20,000 for a landline setup. Since VoIP uses existing internet connections to place and receive calls, VoIP setup can be free, and businesses continue to save over time.

Connectivity

The PSTN’s main benefit is that because it operates independently, it’s consistent. Barring telephone line damage, it will continue to function through power outages or poor internet connectivity.

However, if your calling system operates on PSTN lines, employees are constrained to making and receiving business calls from the office—in physical proximity to their landline office phones. Particularly post-pandemic, as more businesses integrate remote or hybrid work models, this inhibits operational flexibility. VoIP allows your employees to place and receive internal and external calls from anywhere with an internet connection, and adding or removing lines can often be done with the click of a button.

Features and capabilities

With the PSTN, you’re limited to strictly voice data and a few basic features like Caller ID and voicemail, whereas VoIP gives you access to features like conference calling, intelligent call routing and call recording, transcription and translation.

Security

PSTN lines don’t often experience security issues (like cyber attacks) due to their physical nature. VoIP communications are more susceptible to cyber attacks than the PSTN, because the security of your VoIP system depends on the security of your internet connection. However, VoIP providers like Telnyx who operate on proprietary IP networks are able to meet rigorous security standards by keeping call data off the public internet entirely, while providing advanced networking configuration options including VPN solutions.

Keep in mind that the PSTN will only be an option for a few more years, whereas VoIP will continue to exist and evolve for as long as we use the internet. For a more detailed breakdown of which telephony system is right for you, click here.

Future-proof your communications—don’t rely solely on the PSTN

In order to ensure you choose the right VoIP provider, it’s important to remember which qualities the PSTN possesses that have served us so well over the past decades, and seek their equivalents when selecting a compliant PSTN replacement service.

Reliability

The PSTN’s independence from power sources and internet connectivity makes it ideal for emergency services, such as:

• 911 calls
• Fire alarms triggering an alert to the local fire department
• Medical alert services
• Security systems communicating location information when an alarm is triggered

When transitioning to VoIP, it’s important to work with a provider that offers feature-parity in terms of call origination location provision. This way, your calling system can function appropriately in an emergency, and meet regulatory compliance standards.

Security

The Center for Strategic and International Studies estimates that cyber attacks cost businesses over $600 billion dollars worldwide each year. IP-based communications like VoIP have security vulnerabilities that make them susceptible to some forms of cyber attacks. The software, data networks and wireless data transmission that are often involved with VoIP communications present potential access points for security breaches.

The PSTN, on the other hand, is still mostly built on copper wiring. To compromise the security of PSTN voice communications, one would have to physically access the phone lines by “bugging” or “wiretapping:” two (illegal except in specific instances) methods of listening in on phone calls.

Selecting a VoIP provider that operates on a proprietary IP backbone can help reduce vulnerabilities to cybersecurity attacks. Providers like Telnyx process calls on infrastructure that is isolated from the public internet, and also offer networking solutions that enable businesses to apply further security measures to their internet-based communications.

Transitional flexibility

Migrating to internet-based technology like VoIP is done on a per-line basis, which is a deliberate and methodical process. Additionally, IP-capable infrastructure still needs to be built out to some rural areas, so carriers must make physical improvements before completing the switch. In the meantime, the PSTN remains in place—at least as a failsafe—until VoIP and wireless solutions are deemed stable and secure enough to be used for all global voice communications.

Advanced PSTN replacement providers like Telnyx offer fast, reliable number porting services that keep phone numbers intact while transferring them quickly from landline to virtual. Ensuring that porting goes smoothly minimizes the inconveniences of transitioning your phone system from landline to digital.

Frequently asked PSTN questions

How do I know if I have a PSTN line?

If your phone is a cell phone, you do not have a PSTN line.

If your phone is connected to a traditional phone cord (RJ-11) as opposed to an ethernet cord (RJ-45), you may be connected to the PSTN. Here are a few ways to confirm that you are, in fact, connected to the PSTN:

• Your phone line does not have an Analog Telephone Adaptor (ATA) box
• Your phone service is offered by a telephony provider, not a cable provider
• Your phone line remains in service even if the power goes out

Are PSTN calls encrypted?

Though the PSTN is considered a secure form of voice communication, it is not encrypted.

What’s the difference between Direct Inward Dialing (DID) and PSTN?

DID is a telephone feature, whereas the PSTN is a telephone network.

When a customer uses DID, the telephone company allocates a block of phone numbers to one or more telephone lines. This allows a business to assign unique phone numbers to each employee—as opposed to requiring callers to dial an extension or go through an automated menu—without having to purchase hundreds of phone lines.

Is the PSTN more expensive than VoIP?

One glaring issue that faces PSTN users is the heftier price tag that comes along with the traditional communication solution. When compared side by side with VoIP pricing, PSTN setup and calls are much more expensive.

Do fixed phones present an issue with the PSTN?

If you run a business that requires frequent customer connection, the use of PSTN lines can be an issue. With fixed lines, your calls are limited to the office, or wherever else your phone system may be set up—you don’t have the option of making calls on the go or easily relocating your setup.

Fun facts about early telephones and the PSTN

• Alexander Graham Bell is widely regarded as the inventor of the telephone, but Antonio Meucci, an Italian immigrant, designed a prototype of a telephone nearly 20 years before Bell filed his patent. Bell faced over 600 lawsuits from rival inventors, but the Supreme Court ruled in Bell’s favor.

• The first telephone call was made in 1876 between Alexander Graham Bell (29-year-old inventor of the telephone) and his assistant, Thomas Watson. The first telephone book was published in 1878. It contained 50 listings and fit on a single sheet of paper.

• The PSTN used to rely on human switchboard operators to connect calls between exchanges. Many young people (both men and women) worked in switchboard offices.

• Phones used to look vastly different from the desk phones (or even vintage rotary phones) we see today. Many early designs resembled desks or cabinets.

• The first telephone line was installed in 1877. Three years later, almost 49,000 telephones were in use. By 1910 that number increased to over 5 million. The PSTN reached peak usage in the early 2000s with over 192 million subscriptions.

Contact our team of experts to how you can future-proof your communications by switching to VoIP with Telnyx.