VoIP Gateways Demystified

By Lori Shepherd
Updated: February 01, 2011

For IT Managers and business owners who are planning to implement a Voice over Internet Protocol (VoIP) solution, will also need to consider choosing the perfect VoIP gateway for their business environment. VoIP gateways aren’t rocket science, but deciphering through the options may seem daunting. Here’s a straightforward approach to consider which helps demystify this technology.

Gateways: What are they?

First and foremost, VoIP gateways are nothing more than hardware that converts TDM telephony traffic from the publicly switched telephone network (PSTN) into digital IP packets, so that it can be transported over an IP network, such as a LAN. Think of VoIP gateways as a bridge between an IP network and the PSTN. Where voice traffic originates from a VoIP gateway, it will be converted into a form to receive by the destination IP or PSTN network. Therefore if voice traffic originates from the PSTN, the VoIP gateway converts the analog voice signal into a digital signal.

This digital signal gets compressed using a codec, and arranges it into packets which are transferred across the IP network using a signaling protocol. When voice traffic originates from an IP network, the VoIP gateway decompresses the digital packets into a digital signal which is converted into an analog signal to be transferred across the PSTN.

VoIP Protocols and Codecs

With VoIP gateways now defined, you’ll also want to consider VoIP protocols and codecs of which gateways are dependent. A VoIP compatible protocol is technology which determines how a voice packet is transported across a network, and codecs, the voice streaming compression digital packet, are crucial. Without this compatibility, gateways cannot work properly with your VoIP phone system or hosted service, not to mention determining overall call quality.

Analog and Digital

Lastly, understanding that there are two main gateways—analog and digital – is important:


An analog VoIP gateway is used to connect traditional analog telephones to a VoIP phone system or to connect VoIP phone system to the PSTN. Due to this dual purpose an analog VoIP gateway comes in two different forms – FXS and FXO.

  • FXS gateway – An FXS gateway is used to connect traditional telephones and fax machines to a VoIP phone system.
  • FXO gateway – An FXO gateway is used to connect VoIP phone systems to PSTN lines.


A digital VoIP gateway is used to connect VoIP Phone systems to digital voice lines such as T1/E1/BRI. A digital VoIP gateway can also be used to connect traditional PBX systems to IP networks.

Essentially analog and digital VoIP gateways accomplish the same thing.

Featured Research
  • The New SMB Phone Systems Comparison Guide

    Does your small or medium-size business need a new phone system? Then you're in luck! Our new, updated comparison guide helps you cut through superfluous information and narrow down your list of solution providers. Get the latest data on phone system features, pricing, and performance metrics in an easy-to-use format. more

  • How UC Can Help Your Business Survive the Holidays

    The holiday season is filled with frenzy and excitement for businesses and consumers alike. Consumers prepare gift lists, compare brands and prices, and begin shopping with a vigor that is not present most other times of the year. For many businesses, the holiday season accounts for a large profit bump at the end of each year, and companies strive to exceed their goals and keep customers happy during this rush late in the year. more

  • [Infographic] Switching Phone Systems

    There are a lot of possible reasons you might want to switch to a new phone system. The old one might cost too much or be too troublesome to operate and maintain. It might not be flexible enough. It might not be reliable enough. Or it just might not have the kinds of features and capabilities that you need in today’s competitive business climate. more

  • Business VoIP on a Budget

    Voice over Internet Protocol (VoIP) phone systems represent the next innovation of telephone connection and communication by making it possible to conduct calls over a broadband internet connection, rather than an analog phone line. more

  • [Infographic] The Advantages of Unified Communications

    Did you know that according to 8x8, the tangible ROI of a unified communications solution for a 10,000-person enterprise is approximately $15.5 million? This isn't the only way unified communications can improve your business. more