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What are the Differences between PSTN and VoIP Phone Systems?

Many homes and businesses continue to rely on PSTN-based phone systems. PSTN stands for Public Switched Telephone Network, and functions through copper wires that relay analog voice data.

Analog PSTN systems are referred to as “legacy” systems because technology can now offer a better solution – “VoIP” telephony. VoIP stands for Voice over IP. Click here to learn more about VoIP in our dedicated VoIP blog series.

In this blog, we are breaking down the key differences between PSTN and VoIP phone systems to help business owners gain a better understanding how the technology affects the end-user.

PSTN Telephony

  • Digital (except for a few analog connections between customers and equipment)
  • Flows through copper wires
  • Landline phones are usually active during power outages
  • Does not make efficient use of resources
  • Limited functionality
  • Features are usually available at additional costs (e.g. call waiting, caller ID, etc.)
  • Long distance charges can be costly
  • Limited data capacity
  • More difficult to upgrade as requires infrastructure upgrades


  • IP
  • Reduces voice signals to binary code
  • Transmits data over the Internet
  • Phone services go down during power outages
  • Efficient management of data
  • Greater functionality options (learn about VoIP’s features)
  • Certain features are available free of charge (e.g. call waiting, caller ID, etc.)
  • Long distance is often included
  • Greater data capacity
  • Digital signals encrypted for security
  • Longer signal range than analog
  • Easier to upgrade as requires bandwidth and software upgrades

It is increasingly essential for businesses to adopt a digital, flexible, and more advanced telephony system to remain competitive. VoIP offers features like audio and video conferencing and mobility capabilities – features that analog telephony simply cannot match.

For those organizations that aren’t ready for a full migration to VoIP, hybrid solutions are available. These organizations can continue using their legacy system, but with the added bonus of certain VoIP benefits.

>> Activo can help you determine your organization’s telephony needs, and implement the most appropriate solution. Simply contact us today to get started!

More on VoIP from Activo:

How VoIP Cuts Costs and Builds Profit

VoIP Part One: Should My Business Switch to VoIP?

VoIP Part Two: What Does My Business Need to be Aware of with VoIP?

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