Alexander Graham Bell invented the telephone in 1876. In 1915, he made the first-ever transcontinental (aka coast-to-coast) phone call, helping to pioneer the Public Switched Telephone Network (PSTN).
Although a lot has changed since then, many of the core PSTN functions are the same as they’ve always been. Much like the legacy technologies behind postal service and radio stations, PSTN still has useful applications today.
Businesses such as restaurants, gyms, and clinics may find that it makes sense to have a landline for local calls. A registered landline can also be a regulatory requirement for some.
If that’s not you, Voice over Internet Protocol (VoIP) services — like Nextiva and Zoom — are cheaper, offer better integrations, and allow for more scalability.
This isn’t to say that the PSTN doesn’t deserve its praises — it had an extraordinary run as the world’s premier communication system. But it’s hard to compete with the features and functionality of more modern VoIP services.
The evolution of the PSTN
The legacy of PSTN begins with the telegraph networks of the mid-19th century. These networks carried coded electrical signals along copper wire. Telegraphists inputted and deciphered Morse code messages at either end.
The first call
When Alexander Graham Bell spoke to his assistant, Thomas A. Watson, over a two-mile distance on the first telephone call, the connection used a ring-down circuit. With this kind of system, there was no capacity to connect to multiple phones — only a wire connected directly from one device to another.
Before bells and ringtones, early telephones also lacked any system to notify you of an incoming call. Instead, users would often whistle into their receivers to draw attention.
The switchboard system
The next major innovation for the PSTN was the creation of the telephone exchange switchboard. Before the arrival of this system, each phone had to be hardwired to a single other phone.
The switchboard system allowed users to connect to any other subscriber to the telephone service in their area. This process involved calling the exchange and asking operators to connect their line with that of the other party.
Automatic switching
In the early 20th century, automatic switching systems were invented. These systems allowed callers to connect to multiple phones by dialing numbers — with no human operators required. Automatic switching meant faster call setups, reduced costs, and improved efficiency for the entire system.
Automatic switching also facilitated the expansion of telephone systems into more remote areas, and they were more scalable by design. This made long-distance calling more feasible, and networks became more comprehensive.
Digital innovation
As researchers in the 1950s experimented with encoding voice signals in digital form, analog technology gave way to digital innovation.
When digital transmission systems arose in the 1960s, it became possible to convert multiple voice channels into a single signal for transmission. This capability further increased the PSTN’s overall capacity.
Likewise, the rise of digital switching systems in the 1970s saw further improvements in call quality. Since digital channels are less prone to interference and noise, they were able to produce clearer, more reliable audio.
Digital switching systems also led to new features like call-waiting, voicemail, three-way calls, and caller ID. This perhaps paved the way for integrating data transmission services like the ones we use on the internet today.
Finally, the rise of digital switching systems brought about global standardization to many telecom networks. Having digital standards in place allowed for increased interoperability between network providers, thus making seamless communication possible for those on different networks and in different countries.
Integrated services digital network (ISDN)
ISDN arose in the 1980s to replace older analog systems. It was a versatile digital standard that could simultaneously transmit voice, video, and other data over a digital network.
The telecommunications industry and businesses quickly adopted ISDN technology, as it offered better call quality, faster data transmission, and allowed for video conferencing. ISDN didn’t decline in popularity until broadband and cable internet services emerged in the late 1990s.
Broadband and the rise of mobile
When broadband arrived in the early 2000s, the internet was already an integral part of business and social life. Both VoIP services and cell phones that supported text and voice calls were available.
Meanwhile, the PSTN was still a common way to contact a business or professional.
When cell phones became smartphones, things changed. Applications can now send messages and make both voice and video calls. VoIP softphones could now integrate with other business applications, making it easier to schedule appointments, send follow-up emails, and stay on top of a busy schedule.
The PSTN today
Some countries, like the United States, Australia, and Singapore, are preparing to retire their national PSTNs. Other countries, like the Netherlands, Sweden, Germany, and Japan, have already switched off their PSTN networks.
The United Kingdom will shut down its PSTN and ISDN service in 2025.
Most (if not all) of these countries are replacing their PSTN systems with internet protocol (IP) networks, as they are better equipped to handle modern communication and data transfer needs.
In the US, you can still get a plain old telephone service (commonly referred to as POTS by the telecom industry). As more of the country switches to IP networks, this may change — but for the time being, you can still install a copper wire telephone for voice communication.
PSTN vs VoIP
VoIP functions just like legacy telephony, except with added support for video and text messaging. It also uses the internet for its connections rather than a telephone exchange system.
Since PSTN technology uses analog signals traveling along copper wire, it doesn’t support multiple data channels and is subject to noise and interference.
Conversely, VoIP uses encrypted data packets routed through the internet and reassembled at the other end, offering improved call quality and reliability. VoIP services also integrate with other business applications using application programming interfaces (APIs).
For instance, an integrated customer relationship management (CRM) system can help a business maximize its potential for lead generation and client nurturing. This type of integration isn’t possible with analog phone systems.
PSTN costs
Traditional landline services usually have a monthly service fee. This service fee covers a set number of local and long-distance minutes. Businesses may pay service fees on a per-line or per-user basis. Typically, a call’s destination determines its rates.
For individuals, buying a landline telephone is relatively inexpensive, and it can still be cheaper than buying a brand-new VoIP-compatible device.
Businesses, however, often have different needs. For instance, a company with many agents could need a private branch exchange (PBX), multiple phones, and professional installation.
Regular maintenance of a PSTN phone system is often necessary as well. This, along with the need to upgrade hardware periodically, can make PSTN expensive.
VoIP costs
VoIP services are often free for individuals. In many cases, the only equipment costs are IP phones and adapters.
These costs are usually lower than the initial setup costs for PSTN services.
Some VoIP providers offer subscription-based packages that include a certain number of local and international minutes. Other VoIP services use a pay-as-you-go model, charging users just for the data used.
For businesses, setting up a VoIP system means purchasing IP phones, routers, and potentially a PBX. This typically requires a monthly fee, either per user or per extension.
Integrating an existing phone system with a VoIP service creates additional costs.
PSTN advantages
- Reliability: The PSTN has been around for many decades; its infrastructure is dependable, albeit at the expense of some functionality.
- No internet required: A landline connection can operate with no internet.
VoIP advantages
- Initial cost: A VoIP system is typically cheaper to set up and maintain than a PSTN system. This is true for both businesses and individuals.
- Monthly costs: VoIP services typically have lower monthly costs than PSTN landlines.
- Feature-rich: VoIP services offer many features that support growing businesses.
Using legacy PSTN equipment with VoIP
It’s possible to use analog phones and fax machines with VoIP through an analog telephone adapter (ATA). This device bridges the gap between PSTN equipment and VoIP by turning analog signals into digital ones that can be transmitted over the internet.
Likewise, an ATA can convert incoming digital signals to analog. Using an ATA can be a great way to leverage the benefits of VoIP services while using existing infrastructure and hardware.
VoIP phones can also make calls over the PSTN. When you place a VoIP call, it’s routed through your VoIP service provider. This service provider uses a gateway that acts as a bridge between the analog nature of the PSTN and the digital nature of VoIP.
Businesses that want to integrate their PSTN and VoIP systems need a Session Initiation Protocol (SIP) gateway, which allows them to leverage the features of a VoIP service while maintaining connectivity with the PSTN network.
In general, business owners can configure a SIP gateway to accommodate increased call volume. PSTN systems aren’t scalable in this way.
If you’re in the market for a VoIP service provider, keep in mind that many of the top VoIP services offer slightly different features for specific individual and business needs. For instance, Nextiva is among the most feature-complete services, RingCentral works great for small businesses, and Ooma is ideal for remote-working teams.