Businesses today have a range of telephony service options to choose from, varying significantly in monthly cost and features offered. Understanding the differences between traditional PSTN-based systems and modern Internet-based telephony systems can help businesses make informed decisions that best meet their communication needs and budget constraints.
PSTN Copper-based Services – Your mother’s dialtone
Technology and Hardware: PSTN (Public Switched Telephone Network), sometimes referred to as POTS (Plain Old Telephone Service), is the traditional telephony system that uses copper wires to carry analog voice signals. In a business setting, it often requires a PBX (Private Branch Exchange) system, which is an in-house telephone switching system that manages incoming and outgoing calls for a company’s internal users. PBX hardware is typically expensive and requires physical space for installation and ongoing maintenance.
Pricing and Plans: PSTN service plans are usually based on the number of lines, with additional costs for long-distance and international calls. The billing is usage-based, meaning charges accrue per minute. Moreover, businesses often face additional fees for features like call forwarding, caller ID, and voicemail services. Upgrading or expanding the system to accommodate more lines or advanced features often involves significant costs due to the required physical modifications.
Today’s Internet-based (VoIP) Telephony Services
Technology and Hardware: The most common type of modern Internet-based telephony system is VoIP (Voice over Internet Protocol), which transmits voice as data over the Internet instead of the traditional copper-in-the-street network of telephone lines. This technology can often be used with existing data networks and computers, reducing the need for extensive new hardware and infrastructure. Some VoIP systems can operate with simple headsets and computers or even integrate directly with mobile devices.
Pricing and Plans: VoIP plans typically offer more flexibility and cost-effectiveness compared to PSTN. Many providers offer flat-rate plans with unlimited calling or bundled minutes that include international calls. Pricing is often based on the number of users or concurrent calls rather than on usage, making costs predictable and often substantially lower than traditional systems. Features such as auto-attendant, advanced call routing, conference calling, and integration with CRM systems are frequently included at no extra charge.
The choice between PSTN and VoIP can depend heavily on a business’s specific needs, existing infrastructure, and budget. For businesses that require reliable, high-quality communication tools without a significant initial hardware investment, VoIP offers a compelling alternative. Its scalability and integration capabilities make it particularly attractive for businesses looking to expand or modernize their communication systems. In contrast, while PSTN offers reliability and traditional service, it may not be economically feasible for growing businesses due to its higher ongoing costs and rigid infrastructure requirements.
Double Eagle VoIP Services can provide your firm with all the resources and benefits of an up-to-date, feature rich and economical communication service.
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