Alexander Graham Bell invented the telephone in 1876. In 1915, he made the first transcontinental (coast-to-coast) telephone call, thereby contributing to the development of the Public Switched Telephone Network (PSTN).
Although much has changed since then, many of the core functions of the PSTN are the same as they always were. Much like the old technologies behind postal services and radio stations, the PSTN still has useful applications today.
For businesses such as restaurants, gyms and clinics, a landline connection for local calls may be useful. For some businesses, a registered landline connection may also be required by law.
If that doesn’t apply to you, Voice over Internet Protocol (VoIP) services – like Nextiva and Zoom – are cheaper, offer better integrations, and allow for more scalability.
That’s not to say the PSTN doesn’t deserve its praise – it was the world’s leading communications system and has stood the test of time over an extraordinary period of time. But it’s hard to compete with the features and functionality of more modern VoIP services.
The development of the PSTN
The history of the public telephone network begins with the telegraph networks of the mid-19th century. These networks transmitted coded electrical signals over copper wires. Telegraph operators entered and deciphered Morse code messages at both ends.
The first call
When Alexander Graham Bell made the first telephone call over a distance of two miles to his assistant Thomas A. Watson, the connection was made using a ring-down circuit. This system did not allow multiple telephones to be connected at the same time—there was only one cable that ran directly from one device to another.
Before rings and ringtones, early telephones also had no system to notify you of an incoming call. Instead, users often whistled into their receiver to get attention.
The switchgear system
The next major innovation for the public telephone network was the introduction of telephone switching. Before this system was introduced, every telephone had to be permanently connected to another telephone.
The telephone exchange system allowed users to connect to any other telephone service subscriber in their area by calling the central office and asking the operator to connect their line to the other party’s.
Automatic switching
In the early 20th century, automatic attendant systems were invented. These systems allowed callers to connect to multiple phones by dialing numbers – without the need for human personnel. Automatic attendant meant faster call setups, lower costs, and improved efficiency of the entire system.
Automatic switching also made it easier to extend telephone systems to more remote areas and was inherently more scalable, making long-distance calls more viable and networks more comprehensive.
Digital Innovation
When researchers began experimenting with encoding speech signals in digital form in the 1950s, analog technology was replaced by digital innovations.
With the introduction of digital transmission systems in the 1960s, it became possible to convert multiple voice channels into a single signal for transmission. This capability further increased the overall capacity of the public telephone network.
The introduction of digital switching systems in the 1970s also led to further improvements in call quality. Since digital channels are less susceptible to interference and noise, they could produce clearer and more reliable sound.
Digital switching systems also introduced new features such as call waiting, voicemail, three-way conferencing, and caller ID. This potentially paved the way for the integration of data transmission services such as those we use on the Internet today.
Finally, the rise of digital switching systems led to global standardization of many telecommunications networks. The introduction of digital standards enabled improved interoperability between network operators, thus enabling seamless communication between users of different networks and countries.
Integrated Services Digital Network (ISDN)
ISDN emerged in the 1980s as a replacement for 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 because it offered better call quality, faster data transfer, and video conferencing. ISDN only lost popularity in the late 1990s with the advent of broadband and cable Internet services.
Broadband and the rise of mobile communications
When broadband emerged in the early 2000s, the Internet was already an integral part of business and social life. Both VoIP services and mobile phones that supported text and voice calls were available.
In the meantime, the public telephone network was still a common way to contact companies or professionals.
When cell phones became smartphones, everything changed. Applications can now send messages and make both voice and video calls. VoIP softphones can now integrate with other business applications, making it easier to schedule appointments, send follow-up emails, and keep track of a busy schedule.
The public telephone network today
Some countries such as the United States, Australia and Singapore are preparing to shut down their national public telephone networks. Other countries such as the Netherlands, Sweden, Germany and Japan have already shut down their public telephone networks.
The United Kingdom will switch off its PSTN and ISDN services in 2025.
Most (if not all) of these countries are replacing their PSTN systems with Internet Protocol (IP) networks because they are better equipped to meet the demands of modern communications and data transmission.
In the US, you can still get regular phone service (commonly known as POTS in the telecommunications industry). As more parts of the country move to IP networks, this may change – but for now, you can still install a copper-wired phone for voice communications.
PSTN vs VoIP
VoIP works just like traditional telephony, but it also offers support for video and text messaging. It also uses the Internet for connections, rather than a telephone exchange.
Because PSTN technology uses analog signals transmitted over copper wires, it does not support multiple data channels and is subject to noise and interference.
In contrast, VoIP uses encrypted data packets that are routed over the Internet and reassembled at the other end, providing better call quality and reliability. VoIP services can also be integrated with other business applications through application programming interfaces (APIs).
For example, an integrated customer relationship management (CRM) system can help a company maximize its lead generation and customer retention potential. This type of integration is not possible with analog phone systems.
PSTN costs
Traditional landline services typically have a monthly service fee. This service fee covers a set number of minutes for local and long-distance calls. Companies can pay service fees per line or per user. Typically, the destination of a call determines its rates.
For individuals, purchasing a landline phone is relatively inexpensive and can still be cheaper than purchasing a brand new VoIP compatible device.
However, companies often have different requirements. For example, a company with many agents may need a private branch exchange (PBX), multiple phones, and professional installation.
Regular maintenance of a PSTN phone system is also often required. This, and the need to regularly upgrade hardware, can make PSTN expensive.
VoIP costs
VoIP services are often free for private individuals. In many cases, the only costs are equipment costs for IP phones and adapters.
These costs are typically lower than the initial setup costs for PSTN services.
Some VoIP providers offer subscription packages that include a certain number of local and international minutes. Other VoIP services use a pay-as-you-go model where users are only charged for the data they use.
For businesses, setting up a VoIP system means purchasing IP phones, routers, and possibly a PBX. These typically come with a monthly fee, either per user or per extension.
Integrating an existing telephone system with a VoIP service incurs additional costs.
Advantages of the public telephone network
- Reliability: The public telephone network has been around for many decades. Its infrastructure is reliable, but at the expense of some functions.
- No internet required: A landline connection can also work without the Internet.
Advantages of VoIP
- Acquisition costs: A VoIP system is generally cheaper to set up and maintain than a PSTN system. This applies to both businesses and individuals.
- Monthly costs: The monthly costs for VoIP services are usually lower than for PSTN landlines.
- Rich in features: VoIP services offer many features that support growing businesses.
Using legacy PSTN devices with VoIP
An analog telephone adapter (ATA) allows analog telephones and fax machines to be used with VoIP. This device bridges the gap between PSTN devices and VoIP by converting 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 take advantage of VoIP services while using existing infrastructure and hardware.
VoIP phones can also make calls over the public switched telephone network. When you make a VoIP call, it goes through your VoIP service provider. This service provider uses a gateway that acts as a bridge between the analog nature of the public switched telephone network and the digital nature of VoIP.
Businesses that want to integrate their PSTN and VoIP systems need a Session Initiation Protocol (SIP) gateway that allows them to use the features of a VoIP service while maintaining connectivity to the PSTN network.
Generally, business owners can configure a SIP gateway to handle increased call volume. PSTN systems are not scalable in this way.
When looking 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 example, Nextiva is among the most feature-rich services, RingCentral is great for small businesses, and Ooma is ideal for teams working remotely.
