Over 80% of U.S. landline connections have disappeared in the last two decades, and the decline isn’t slowing down. The Public Switched Telephone Network (PSTN) has carried voice calls for over a century, using copper lines and circuit‑switched technology to connect people across towns, countries, and continents. It has been the backbone of reliable communication, but its era is ending. But this long‑standing network is reaching the end of its life. Many countries are retiring PSTN in favor of all‑digital, internet‑based calling. The UK will entirely shut down its PSTN by 2027, and Norway has already completed its transition. In the U.S., landline subscriptions have dropped from over 186 million in 2000 to fewer than 32 million in 2022. The main alternative is Voice over Internet Protocol (VoIP), a technology that sends voice calls over the internet instead of dedicated phone lines. Businesses that switch often cut communication costs by 30–50%, gain advanced features like video conferencing and call recording, and allow teams to work from anywhere with a reliable internet connection. If you still depend on PSTN, it’s time to plan your next move. In this blog, you will see how PSTN and VoIP work, how they compare, which one is better suited to your needs, and what to consider before switching so you can prepare for a smooth transition without disrupting your operations.    

Key Takeaways PSTN uses circuit‑switched lines; VoIP sends voice over the Internet. Many countries are retiring PSTN by 2027 or earlier. VoIP offers lower costs, advanced features, and mobility. PSTN remains reliable in areas with poor internet access. Switching to VoIP requires stable broadband and backup power. Migration planning should include QoS settings and user training. VoIP can reduce call costs by up to 70% compared to PSTN.

 

Understanding PSTN: The Backbone of Traditional Telephony

The Public Switched Telephone Network (PSTN) refers to the worldwide network of interconnected public circuit‑switched telephone systems. It connects telephones via a combination of copper wire loops, fiber‑optic cables, microwave and satellite links, and mobile cellular networks, all managed by a hierarchy of switching centers (local offices, tandem centers, international gateways). PSTN operates using circuit‑switched architecture: when a call is placed, a dedicated communications path is reserved for the entire duration of that call, ensuring a consistent and stable connection. Below is an overview of the key developments and how PSTN has evolved.    

Late 1800s – early 1900s	Early to mid-1900s	1970s – 1990s	Present
Manual operator‑based POTS using copper loops	Electromechanical automated switching (Strowger, crossbar)	Transition to digital switching and trunk technologies	Hybrid network: digital core, legacy copper local loops

 

How the Public Switched Telephone Network Operates 

The Public Switched Telephone Network (PSTN) is an interconnected system that combines telephone lines, fiber‑optic links, switching facilities, cellular infrastructure, satellites, and cable networks. It functions as a unified platform to connect callers anywhere in the world. When you make a call, the network establishes a dedicated path between your phone and the recipient’s device, carrying your voice in real time. Below is a detailed explanation of how a call travels through the modern PSTN.

• Phone to the Local Exchange

When you speak into a traditional telephone, your voice is converted into an electrical signal. This signal travels over the local loop, often twisted‑pair copper wires or, in some upgraded areas, fiber, to a nearby local exchange (also called a central office). The local exchange identifies the number dialed and determines the routing path.

• Routing Through the Network

If the destination is within the same exchange area, the call is connected directly to the recipient’s line. For calls outside the local area, the signal is sent through higher‑level exchanges via fiber‑optic cables or other high‑capacity links. In these cases, the electrical signal may be converted into light pulses for efficient transmission over long distances.

• Reaching the Recipient

At the destination exchange, any optical signals are converted back into electrical form. The call is then sent through the local loop to the recipient’s phone, which converts the signal back into sound, completing the connection.

Components of PSTN

The Public Switched Telephone Network is made up of several key components that work together to connect calls and transmit voice signals reliably.

• Subscriber Lines

These are the physical connections between a user’s device (such as a telephone, fax machine, or modem) and the nearest local exchange. They are often called the local loop. Traditionally made of twisted‑pair copper wires, though some areas now use fiber.

• Switching Centers

Switching centers are facilities that manage and route calls within the network. They establish a dedicated path between the caller and the recipient.

• Local Exchange (Central Office): Connects subscribers in a defined area.
• Tandem Office: Routes calls between multiple local exchanges in the same region.
• Toll Office: Handles long‑distance calls between cities or states.

• Transmission Media

The physical pathways that carry voice signals between network points. These can include:

• Copper Cables: Common for short‑distance connections.
• Fiber‑Optic Cables: Used for long‑distance and high‑capacity routes; transmit signals as light pulses.
• Microwave Links: Used for wireless transmission in specific regions or across difficult terrain.

• Signaling System

The system that exchanges information needed to set up, manage, and end calls. Modern PSTNs commonly use Signaling System No. 7 (SS7) for call setup and routing, billing, and number translation.

• Customer Premises Equipment (CPE)

Devices at the subscriber’s location that connect to the PSTN through the local loop. Examples can be telephones, fax machines, modems, or private branch exchange (PBX) systems. These are owned and maintained by the customer, not the network operator.

• Trunk Lines

Trunk lines are high‑capacity connections that carry multiple calls between switching centers, which may be fiber‑optic or multiplexed copper. They help to reduce congestion by combining many voice channels into a single transmission path.

• Gateways

Gateways are the interfaces that allow the PSTN to connect with other types of networks, such as VoIP systems. They help to convert signals and protocols so calls can move between circuit‑switched and IP‑based environments.

Characteristics of PSTN

• High Reliability

PSTN is known for its ability to provide consistent service with minimal interruptions. The network is designed with redundancy, meaning multiple paths are available to reroute calls if one route fails. It remains operational during power outages because the system supplies power to basic telephones through the phone line itself, independent of a household’s electricity supply. Call quality is generally stable, as the dedicated circuit for each call avoids congestion from other traffic.

• Fixed‑Line Dependency

PSTN connections rely on physical lines that run from the user’s premises to the local exchange. Service is tied to a specific location, which limits mobility.  Calls can only be made from the connected device at the physical line’s endpoint, unlike mobile or internet‑based systems that allow calls from multiple locations.

• Flexible Costs

Using PSTN often involves higher expenses compared to modern communication alternatives. Setting up physical lines can be costly, especially in new locations or remote areas.  Users pay recurring charges to maintain the connection. Calls made outside the local area often incur additional charges, particularly for international connections.  

Understanding VoIP: A Technology That Changed How We Talk

Voice over Internet Protocol (VoIP) is a technology that enables the transmission of voice, and in many cases, video and other data, over an Internet Protocol (IP) network such as a local area network (LAN) or the Internet. Instead of using a dedicated circuit for each call, VoIP breaks voice signals into data packets and sends them over shared networks. Over time, VoIP has evolved from early PC‑to‑PC applications to robust platforms used by businesses and individuals worldwide. It can operate through various devices, including:

• Softphones – software applications installed on computers or mobile devices.
• IP Phones – hardware devices designed specifically for VoIP calls.
• Analog Telephone Adapters (ATAs) – devices that allow traditional telephones to connect to IP networks.

How VoIP Works: Breaking Down the Digital Conversation Process

• Signal Conversion and Packetization

When a person speaks into a VoIP device, the analog voice signal is first converted into a digital format using a codec (coder‑decoder). Standard codecs include G.711, Opus, G.722, G.729, and AAC‑LD.

• Transmission Over IP Networks

The digital voice data is divided into packets and sent across the IP network. Protocols such as SIP (Session Initiation Protocol) handle call setup, modification, and termination. RTP (Real‑Time Protocol) manages the delivery of voice packets in real time to maintain conversation flow.

• Receiving and Playback

At the destination, the packets are reassembled in the correct order and converted back into an audio signal. The receiving device then plays the sound through its speaker or handset.  

Characteristics of VoIP

• Cost Efficiency

VoIP often has lower costs compared to regular phone services, with options such as per‑user subscriptions or bundled unlimited call plans. Long‑distance and international calls are typically much cheaper because they use the internet rather than dedicated telephone lines.

• Scalability and Flexibility

Additional users or lines can be added without major infrastructure changes. Calls can be made and received from various devices, including smartphones, laptops, and tablets, as long as there is a stable internet connection.

• Advanced Features

VoIP systems can include integrated features such as interactive voice response (IVR), call recording, call analytics, CRM integration, video conferencing, and messaging capabilities.

• Quality of Service (QoS) Considerations

Call quality can be affected by network conditions such as latency, jitter, and packet loss. A stable and adequately provisioned internet connection is essential for consistent performance.

• Security Factors

While encryption can protect call data, VoIP systems may face risks including unauthorized access, denial‑of‑service attacks, and call interception. Proper configuration and security measures are required to mitigate these risks.

• Regulatory and Emergency Services

Emergency calling over VoIP, such as E‑911 in the U.S., may have limitations in accurately identifying a caller’s physical location. Providers must comply with local regulations concerning emergency services and call data handling.  

PSTN vs. VoIP: Which One Fits Today’s Communication Needs?

 

Characterstics	PSTN	VoIP
Technology Type	Circuit‑switched	Packet‑switched
Connectivity	Copper/fiber lines	Internet/IP network
Reliability	High, works in outages	Dependent on the internet & power
Costs	Higher setup & usage	Lower overall costs
Scalability	Limited	Highly scalable
Quality	Consistent	Variable
Features	Basic	Advanced
Mobility	Fixed location	Use anywhere with internet

  Below is a side-by-side comparison to help you understand how PSTN and VoIP differ.

• Technology Type

Uses circuit‑switched technology. A dedicated communication path is created between the caller and the recipient for the entire call, ensuring a constant connection. Uses packet‑switched technology. Voice is converted into small data packets and sent over a shared IP network, where packets may take different routes before being reassembled.

• Connectivity Method

PSTN relies on physical connections, mainly copper wires for local loops and fiber or microwave links for long‑distance routes. VoIP operates over IP networks, using broadband internet connections via fiber, DSL, cable, or wireless.

• Reliability & Continuity

PSTN is highly reliable and works even during power outages, as basic phones receive power through the line. Designed with network redundancy to maintain service. VoIP is dependent on the quality and availability of the internet connection. Service may be disrupted during power failures unless backup systems are in place.

• Costs (Installation, Usage, Maintenance)

PSTN has higher costs due to physical line installation, recurring rental charges, and higher fees for long‑distance and international calls. In contrast, VoIP has lower costs for setup and calls, especially for long‑distance calls. Often available as affordable subscription plans.

• Scalability & Flexibility

PSTN has limited scalability. Adding new lines requires additional physical connections and infrastructure changes. On the other hand, VoIP is easily scalable. New lines or extensions can be added with minimal setup through software or IP phone provisioning.

• Features & Integrations

PSTN provides basic voice calling and sometimes voicemail. Limited in integrating with other business systems. VoIP offers a wide range of features such as call recording, IVR menus, video conferencing, messaging, and CRM integration.

• Quality of Service Concerns

PSTN offers consistent call quality due to the dedicated circuit, with minimal delay or interruptions. In VoIP, call quality can be affected by network issues like latency, jitter, or packet loss, depending on internet stability.

• Mobility & Device Support

PSTN is tied to a fixed location. Calls can only be made from the connected line. VoIP allows calls from multiple devices, such as computers, smartphones, tablets, anywhere with an internet connection.

Real-World Use Cases: Choosing Between PSTN and VoIP

Choosing the right communication system depends on the situation. Let’s explore the practical applications where PSTN or VoIP proves most effective.

When PSTN Is Still Preferred

PSTN remains a suitable choice in situations where stability and guaranteed connectivity are essential.

• Rural or Low‑Infrastructure Areas: In many remote locations, internet access may be unavailable or unreliable. PSTN, which relies on established copper or fiber lines, can still provide dependable voice communication in such areas.
• Emergency Backup Systems: PSTN lines work during power outages because traditional handsets are powered directly through the phone line. This makes them useful as a backup communication method when other systems are down.
• Areas with Unreliable Internet: In regions where broadband service experiences frequent interruptions or low bandwidth, PSTN offers consistent voice quality and availability without depending on internet performance.
• Critical Services: Hospitals, emergency response units, government offices, and other essential services often maintain PSTN lines for guaranteed communication reliability, particularly during crises.

When VoIP Is the Better Choice

VoIP is well‑suited for environments that require flexibility, scalability, and modern communication features.

• Businesses Requiring System Integration: VoIP can integrate with CRM platforms, helpdesk software, and other business systems, enabling a unified communication process.
• Remote and Distributed Teams: Employees can make and receive calls from any location with an internet connection, allowing seamless communication for remote or hybrid work setups.
• Organizations with Global Operations: VoIP can connect teams, clients, and partners across countries at a fraction of the cost of traditional long‑distance calls.
• High Call Volume Environments: Call centers, customer support departments, and sales teams benefit from VoIP’s ability to handle multiple lines and calls simultaneously without the need for extensive physical infrastructure.
• Need for Advanced Features: Businesses that rely on features like video conferencing, call recording, voicemail‑to‑email, analytics, and automated routing can benefit from VoIP’s wide range of capabilities.

PSTN vs. VoIP: Is a Switch Right for Your Organization?

Switching from PSTN to VoIP is becoming less of a choice and more of a necessity as phone networks are gradually being phased out worldwide. Whether the change is right for you depends on your business needs, available infrastructure, and future communication goals. Many countries are phasing out traditional PSTN infrastructure in favor of all‑digital networks that use VoIP and SIP (Session Initiation Protocol). In Australia, the National Broadband Network (NBN) rollout has led to the gradual replacement of PSTN lines with VoIP services. In Germany, Deutsche Telekom completed its migration to all‑IP networks in 2020. In the United States, while there is no single nationwide shutdown date, major carriers like AT&T and Verizon have reduced investment in copper networks. They are transitioning customers to fiber and VoIP services. Copper networks are costly to maintain, and parts of the PSTN are decades old. Modern digital networks offer higher capacity, better integration, and more features at lower operational costs. The rise of mobile phones and internet‑based communication has reduced demand for traditional landline services. Despite the many benefits of VoIP, organizations may face several hurdles during the migration process. Upgrading to VoIP requires reliable broadband internet, which may not be available in some rural or underserved areas. Older equipment like fax machines, security alarms, or medical alert devices may not work without adapters or additional setup.  

Migration Considerations When Moving from PSTN to VoIP

If your business is planning to transition from PSTN to VoIP, careful preparation will help you avoid disruptions and make the most of the new system. Below are the essential areas you need to address before making the switch.

• Ensure You Have the Right Requirements

Your VoIP system will rely entirely on your internet connection. Make sure you have a stable, high‑speed connection that can handle voice traffic without interruptions. A poor connection can cause dropped calls, delays, or poor audio quality. Unlike PSTN lines, VoIP phones stop working when the power goes out. To maintain service during outages, equip your office with an uninterruptible power supply (UPS) or other backup power solutions. You also need the following equipment: 

• IP Phones: If you want a fully digital experience, invest in VoIP‑ready handsets.
• Analog Telephone Adapters (ATAs): If you plan to keep your existing phones, an ATA will let you connect them to your VoIP service.
• Network Hardware: Use business‑grade routers and switches that can prioritize VoIP traffic for better call quality.

• Maintain Call Quality with QoS Measures

Reserve enough bandwidth for your VoIP traffic so that other internet activities, like large file downloads, don’t affect call quality. Configure your network to give voice traffic higher priority over non‑critical data. This helps reduce delays and improve clarity. Use jitter buffers. A jitter buffer can smooth out inconsistencies in packet delivery, preventing choppy or distorted audio. Track call quality metrics such as latency, jitter, and packet loss. Ongoing monitoring allows you to catch and fix issues early.

• Comply with Emergency Call Requirements

For emergency calls, your VoIP provider needs your current address. Update this information promptly whenever you move or add a new line. In the U.S., make sure your VoIP lines are set up for Enhanced 911 (E911), which automatically sends your address and phone number to emergency responders.

• Plan a Smooth Transition

Instead of moving all your lines to VoIP in one day, migrate in stages. This allows you to test the system, fix any issues, and ensure your team is comfortable before going fully live.   Provide hands‑on training for your staff so they know how to make calls, use features, and troubleshoot minor issues. A well‑trained team will adapt faster and avoid disruptions.  

Transform Your Customer Experience with PerfectSoft.AI VoIP Solutions

  At PerfectSoft.AI, we deliver intelligent, high-performance contact center solutions to improve customer satisfaction, boost agent productivity, and streamline operations. Whether you manage a large-scale BPO, a customer service department, or an outbound sales team, our technology helps you stay connected across all channels while ensuring crystal-clear  We provide advanced VoIP-based Telecom Voice Services that guarantee:

• High-Quality Voice Calls – Clear and uninterrupted voice communication.
• Reliable Connectivity – Stable and secure connections across all regions.
• Global Reach – Seamless communication with teams and customers worldwide.

PerfectSoft.AI offers a well-integrated, cost-effective solution designed to grow with your business. Our platform integrates effortlessly with your existing CRM and business tools, ensuring smooth operations from day one. Easily scale your contact center as your needs evolve, all while enjoying personalized 24/7 support to keep everything running smoothly. Your contact center deserves technology that keeps you ahead. Let’s transform your customer interactions and voice communications today. Want to see how it works?  Let’s Chat!

Frequently Asked Questions

1. What is the difference between PSTN and VoIP?

 PSTN uses a circuit‑switched system with a dedicated line for each call, usually over copper or fiber cables. VoIP sends voice as data packets over the internet, offering more flexibility, additional features, and often lower costs.  

2. Why should my business switch from PSTN to VoIP?

VoIP can lower your call costs, provide advanced features like video conferencing and call recording, and allow your team to make and receive calls from anywhere with internet access. It’s also easier to scale as your business grows.

3. Will my current phone numbers work with VoIP?

Yes, in most cases, you can keep your existing phone numbers through a process called number porting. Your VoIP provider will handle the transfer from your PSTN service.

4. What internet speed is required for VoIP?

A single VoIP call typically requires at least 100 kbps upload and download speed. For multiple users, you’ll need higher bandwidth to maintain call quality without affecting other internet activities.

5. Does VoIP work during a power outage?

No, VoIP will stop working if your power or internet goes out unless you have backup power (UPS) and an alternative internet source in place.