PSTN vs. SIP: What’s the Difference?

Did you know that 80% of businesses with over 200,000 employees and those with 100-500 employees say SIP is very important?

Whether you are a large corporation or a smaller business, everyone can reap the benefits of SIP trunks. The main benefit that businesses enjoy is that it can significantly reduce your costs.

Keep reading to learn the differences between PSTN and SIP, and to find out if you should upgrade your telephony technology. 

What is PSTN?

PSTN is an abbreviation for Public Switched Telephone Network. It essentially means the traditional circuit-switched telephone network, which has been in use since the late 1800s. 

It works by using copper wires, which are underground, allowing businesses and households to communicate with one another. PSTN calling can be done on phones, or landlines as they are commonly known, and this way of communication is still widely used. 

However, over the last decade, there has been a decline in the number of people using the PSTN network. With just over 972 million fixed-line telephone subscriptions worldwide, which is the lowest tally of the century thus far.

What is VoIP?

Voice over IP (VoIP) is where people communicate over the phone using the internet. Unlike PSTN, with VoIP, you don’t need a cable wire, because the exchange is done over the internet. 

The voice signal is converted into a digital signal, which then travels over the internet to reach the other person you are talking to over the phone. However, if you call a PSTN number from your VoIP, then the call will be transmitted through an exchange. 

VoIP is becoming more and more popular, especially with businesses because it can save a lot of money on phone calls. This is because VoIP doesn’t use dedicated lines and the data is able to travel through the shortest path.

What is SIP?

SIP means Session Initiation Protocol, which is a signaling protocol used for multimedia communications, such as phone calls, video calls, and data transfers. 

SIP trunking refers to the direct connection between an organization and an Internet Telephony Service Provider (ITSP). SIP trunks route the data from one phone to another. 

What Are the Benefits of SIP trunks vs PSTN trunks?

If you are still wondering which would be best for you, between PSTN vs VoIP, have a read of the benefits and limitations of both technologies.

Using PSTN can be simple to use, which means your employees are already aware of how to use it, and it is easily maintained. 

Using VoIP can lower network infrastructure costs, improve your business scalability, and has advanced features such as unified communications. 

PSTN Advantages

One advantage of PSTN is that it’s a tried and tested piece of technology, which many people rely on. This means that if there are any problems with your phone lines, an expert will be able to come and fix it in no time.

Another advantage of PSTN is that is is easy to use and maintain, which means that your business can go about business as usual.

PSTN Disadvantages

However, PSTN has limited scalability options for business growth. This means that if you want to expand your business and open new offices then you’ll need to get new phone lines. 

Another disadvantage is that PSTN costs can be quite expensive because you need to pay maintenance fees each month and call charges are a lot higher compared to VoIP.

SIP Advantages

The biggest benefit that SIP can offer is reduced costs. With SIP trunks there is a lower initial capital expenditure and also you save costs compared to a PSTN line. This makes SIP a much better option for return on investment. 

Another advantage of SIP is that offer great opportunity for scalability. So if your business is moving offices or expanding then you can easily add new lines. Or if you are downsizing, then you can reduce your lines. This also helps to cut costs because you only pay for what you use. 

Additionally, SIP trunking doesn’t doesn’t require hardware. This means that once it is set-up you are able to start using it right away. Reducing the complexity of your network ensures that there is less that can go wrong.

Check out The Benefits of SIP Trunking, to learn more about the extensive benefits of implementing VoIP and SIP trunks in your business. 

SIP Disadvantages

A disadvantage of SIP is that processing voice calls can put a higher load on your gateways. This means that you need to have a good internet connection.

To avoid problems with this, some businesses choose to have a dedicated separate internet line for their VoIP communication. 

Make Your Choice Between PSTN and SIP

If the question still remains in your mind, which one is right for your business: SIP vs PSTN? Then you need to carefully consider the above advantages and disadvantages of both communication methods. 

You also need to work out how much your business is spending on your current communication method and how much you could save if you switched. 

Are you ready to implement SIP trunks into your business? We provide SIP trunk services for businesses just like yours, so get in touch with our friendly team and see how much you could save.