If You're Not Looking at VoIP, You Should Be!

Updated: August 01, 2010

VoIP Vs PSTN (Public Switched Telephone Network)


Bandwidth:

PSTN: Each analogue telephone line uses 64kbps in each direction.

VoIP: Depending on what compression is used, if any, VoIP uses as little as ~10-32kbps in each direction. Additional bandwidth can be saved by using silence suppression, i.e. not transmitting when a conversation is not actively taking place such as pauses between comments.

Features such as Voice Mail, Call Waiting, Caller ID, Conferencing, etc.:

PSTN: Available but usually at an additional cost.

VoIP: Generally available for free.

Local Service:

PSTN: Dedicated lines required from the Local Exchange Carrier (LEC) or CLEC.

VoIP: All voice channels can be transmitted over one Internet connection

Remote PBX extensions for Telecommuting workers and branch-offices:

PSTN: Very costly and usually requires dedicated lines for each remote extension.

VoIP: Remote extensions are usually a standard or low cost feature. Intercom calling between locations with 3 or 4 digit extension numbers regardless of where the location is. I.e.: New York and California or California and Brazil offices speak to each other as if they were in the next office, and usually at no additional cost for the call.

Scalability:

PSTN: Complex; may require significant additional hardware, provisioning of new lines, etc.

VoIP: For a remote office, if there's an existing Internet connection, it is usually as easy as simply programming an IP phone, powering it up, plugging it into your LAN and you are done. (assuming you are working with a network provider) Same in a HQ or Branch office but it might require more Internet bandwidth.

Mobility:

PSTN: None, for the most part, your only option for moving from one location to the other is a cell phone, or a complete move order of your existing LEC service which could take as long as 30-days.

VoIP: If you have an IP phone, you can take that phone anywhere in the world that has an internet connection, plug it in and send and receive calls as if you were still in your office, usually at no additional cost. If you have a Host PBX (a PBX that is hosted in the provider's location and accessed by you over the Internet), usually all you require is wiring in your new location and you can usually make a move from one location to another in a day or less.

Choice of companies to carry long distance and local calls:

PSTN: Each line is provisioned by a single Local Exchange Carrier or CLEC. Your choices for Long Distance are many but your local call will always be carried by your local provider.

VoIP: While the line used for Internet Access comes from the LEC or CLEC (usually), as long as you have Internet, there are hundreds of VoIP providers to choose from to terminate, and originate local and long distance calls.

Cost of Local Lines:

PSTN: $27.00-$65.00, Plus many extra charges for features and other charges such as Federal Access Charges (which are not actually "Federal" in any way, they are pure profit to the LEC or CLEC!), subscriber line charges etc.

VoIP: $15-$39.95 per month per seat/sip trunk (a seat is generally considered to be a "person with a phone" or at minimum, a "voice path", a sip trunk is a "voice path" over your internet service that replaces a line, and usually has few to no features) depending upon the features and options delivered-with some at the higher end including unlimited local and long distance calling. Some providers will charge a higher per month charge, but will bundle equipment into the monthly rate to help companies upgrade with little or no up-front cost.

Typical local call cost

PSTN: $.01 to $.06 per minute
VoIP: Usually no charge-some low cost sip trunks might charge a minimal local charge-it depends on the provider.

Free Long Distance:

PSTN: None-for the most part.

VoIP: To other VoIP users of the same gateway (e.g., between offices) there is usually no charge for this call regardless of the distance between locations, I.e. NY to California or California to Brazil as noted above. This is because the call stays on the internet from its origination at point A to its termination at point B.

Featured Research
  • What You Need to Know About VoIP Security

    No matter the industry or area of expertise, a strong VoIP system is the perfect tool for any business looking to take both its internal and external communication to the next level. more

  • Are You Using These 5 VoIP Features?

    In large part, the success of your business depends on the strength and reliability of your team’s many communication networks—this includes your Voice over Internet Protocol system (VoIP). more

  • Go Mobile and Increase Employee Productivity

    The Bring Your Own Device (BYOD) and Voice over Internet Protocol (VoIP) tech trends now allow people to work whenever, wherever, and however they want—mobility makes it happen. more

  • [Infographic] How to Select a Phone System in 10 Steps

    Choosing the perfect phone system for your business is no small task …. Depending on the size of your company, the industry in which you work, and the specific needs your phone system will be required to meet, any number of solutions could get the job done. more

  • 2017 Business VoIP Cost Guide

    Reducing expenses is one of the main reasons that businesses switch from traditional office phone systems to VoIP technology. But many people rush this decision and end up spending more than they need to. The costs of implementing a new VoIP system can increase quickly, especially if you don’t strategically plan for it ahead of time. more