The Complete Guide to PSTN

What is PSTN and how is it used?

Public Switched Telephone Network, or PSTN, is the original telephone system. Invented at the end of the 19th century, it’s been the primary method of instant long-distance communication for more than a century. Recently, other voice-based communication methods, like VoIP, have come to the fore. So, does PSTN still have a place in the world, or is it obsolete?

The answer is more complex than it seems. On one hand, PSTN telephony isn’t as common as it used to be. On the other hand, PSTN copper wire infrastructure is the physical framework for the internet. In short, PSTN is the foundation of modern net-based communication; without PSTN, global VoIP, email, and chat messaging simply wouldn’t work.

Nowadays, many businesses get by without landlines. Instead, they opt for cloud-based VoIP systems, text, and video chat solutions, and CRM-linked email services. Data packets fragment, zip along at hundreds of thousands of miles per second, and assemble themselves perfectly at the other end.

Modern communication is marvellous—and to understand it properly, we need to go back to basics. We’ll explore PSTN and various phone switching options in this guide before explaining how the PSTN foundation links into a contemporary communications infrastructure.

What is PSTN?

As mentioned earlier, PSTN stands for Public Switched Telephone Network. Also known as the POTS phone system—Plain Old Telephone System—PSTN is the sum total of the world’s circuit-switch-based telephone network. In physical terms, PSTN is made of international underground communications cables, undersea communications cables, copper telephone wires, and fiber optic cables. The modern PSTN network also incorporates microwave transmissions, communications satellites, and cellular networks.

The history of PSTN

The development of PSTN arguably began with the first transatlantic telegraph communication. In 1858, Britain’s Queen Victoria sent a telegram to President James Buchanan via an undersea telegraph cable connection between Ireland and Newfoundland. Telegraph cables were later decommissioned, so they’re not an active part of the modern PSTN—but they still represent the earliest example of intercontinental connectivity.

Without a copper wire connection, the very first telephone call made on March 10, 1876 between Alexander Graham Bell and his assistant, Thomas Watson, would never have happened. Bell and Watson sat in adjacent rooms, so they didn’t have to run the wire very far. By contrast, the first two-way transatlantic conversation in 1926 happened over shortwave radio, rather than a low-voltage cable.

From 1927 onward, PSTN consisted of copper cables and shortwave radio. Houses were connected to a central switchboard via cable; switchboard operators took incoming calls and connected callers to other local households or businesses via patch cord, or to switchboards in other states via long-distance cables. Switchboards were enormous because every single telephone line had an assigned two-pin jack socket.

Automatic exchanges had been around since 1892, but they weren’t widely implemented until the mid 20th century. Telephone operators were employed to some degree—particularly in armed forces settings—until the 1970s.

The first cellular network, Nippon Telegraph and Telephone (NTT), launched in Japan in 1979. Finland, Norway, and Sweden followed suit with the Nordisk MobilTelefoni (NMT) network in 1981. Other countries implemented mobile technology over the next decade. Then, in 1998, Iridium began offering satellite phone service.

Today’s PSTN carries signals around the globe via copper line, fiber optic cable, and radio waves. Next, we’ll dive into how all the pieces of PSTN work together.

How does PSTN work?

If you like, you can think of the PSTN as a giant circuit—because that’s more or less what it is. The various pieces of circuit connect and communicate with each other via switches, hence the “switch” part of the PSTN moniker. Whenever appropriate—where copper cables meet fiber optic cables, for instance—data is converted from analog to digital and back again.

Here’s how a PSTN long-distance call works:

  • Sound waves (you, speaking into your telephone receiver) get transformed into electrical signals.
  • Those electrical signals travel via cable to a terminal, and then on to the central office at your telephone company.
  • Electrical signals get converted to light pulses at the CO, which then travel to regional hubs called tandem offices via fiber optic lines.
  • Light pulses are converted back into electrical signals, and travel to the recipient telephone via copper cable.
  • Electrical signals are converted back into sound waves by the recipient telephone.

The entire process happens in less than a second. In fact, between electrical signals, light pulses, and a little interference, communication travels through the network at almost the speed of light.

PSTN switch types

In simple terms, the component networks in PSTN route calls using switches. Signals ping between offices, down copper lines, and along zippy fiber optic cables until they reach their destination, and then it’s, “Hi there, Charlie!”

Let’s have a closer look at some of the most common switch types in the PSTN: local switches, tandem offices, toll offices, and international gateways.

Local switches

As you might expect, your local PSTN exchange, or class-5 telephone switch, is local. Local switching exchanges handle thousands, and sometimes tens of thousands of telephone lines, which they hook into the overarching PSTN. Interestingly, they also supply customers with dial tone. When you make a traditional telephone call, the electrical signals you produce travel through your local switching exchange first.

Local switching exchanges analyze the number you dial; then, they route the electrical signals associated with your call to the right place. That might be a house down the street, in which case the local switching exchange simply routes your call to that person. Otherwise, you get transferred to the nearest tandem office.

Tandem office/junction networks

Also known as junction networks, tandem offices represent the next stop for electrical telephone signals. Tandem offices are essentially regional telephone hubs. They serve numerous geographic areas, and receive and route signals from many local switching exchanges.

Tandem offices route calls to other suburbs in the same wider geographic area, or to long-distance toll offices. Calls—especially in-state calls—sometimes travel through various tandem offices in the local access and transport area (LATA) before being routed back to a recipient’s class-5 local exchange.

Toll offices

Toll offices work in much the same way as tandem offices. In fact, both types of exchange are known as class-4 telephone switches. Toll offices are connected to a large number of tandem offices, so they handle a lot of traffic. They’re where most long-distance switching takes place. They’re basically the telephony equivalent of a large regional mail sorting facility.

Before the breakup of the Bell System in 1984, operator-led class-4 switches were called toll centers, while automatic class-4 switches were called toll points. Modern toll offices use digital switches to route calls to other toll offices or to tandem offices. Until relatively recently, they also sent signals on to international gateways.

International gateways

Until the turn of the 21st century, international gateways (IGWs) were the launch point for overseas calls. When consumers made international calls, electrical signals passed through local exchanges, went on to tandem offices, were sent to toll offices, and then passed into the “international zone” via international gateways.

IGWs were physical exchange centers located in strategic places. Human operators made telephone connections between North America and other countries, some of which had legacy equipment in place as late as the 1990s. At one point, there were international gateways in New York, Miami, and Oakland.

What Is the cost of PSTN?

Most PSTN plans include local minutes, and some include long-distance minutes on evenings and weekends—but that pricing structure doesn’t work in a business setting. After all, most business calls are made during office hours.

Business PSTN systems are notoriously expensive to set up, and costs increase along with business size. All connected employees need phones, and every phone is a separate line with a separate charge.

If you still have a PSTN-based phone system in your office, you might be spending too much. Many businesses now use PBX or VoIP, rather than traditional telephony. Digital telephony costs less and offers better value for money. International calls no longer break the bank, and both options are easy to integrate with CRM systems.

  • PBX. Short for Private Branch Exchange, PBX systems handle both internal and external business calls. PBX systems route internal calls (calls inside your building) to other staff members for free, and channel external calls via VoIP.
  • VoIP. Voice over Internet Protocol services send data packets over an IP network, rather than via the PSTN. In other words, they route calls through the internet.

PBX systems and VoIP services are both easy to set up, and they play well with modern corporate platforms. Both options make call monitoring and expense tracking simpler, and they’re nearly always much cheaper than PSTN. In short, most businesses benefit from upgrading to PBX or VoIP.

Find the right phone type for your business:

If you’re ready to break away from traditional telephony, 8x8 can help. We offer phone and conferencing options that are ideal for business use, and our subscriptions cost much less than PSTN. Our cloud-based business PBX, VoIP, video chat, and messaging products are reliable, stable, and convenient, and they integrate with a range of platforms via API.

PSTN vs VoIP

PSTN systems are cumbersome and expensive. Between desktop handsets and circuit-switched networks, they take up a lot of physical space. By contrast, VoIP is lightweight and cost-effective. VoIP signals travel over your private wide area network (WAN) or over the internet, so you don’t get charged by the minute.

Instead of using electrical signals to send information, VoIP turns audio (your voice) into packets of data. Those packets are transmitted across an IP network and get converted back into audio when they reach the recipient. If you call a regular phone, data packets exit the internet via a switch and travel to your recipient’s phone as electrical signals.

What if you like using your regular phone but want to save money with 8x8 VoIP? No problem—simply connect your handset to your computer via an analog telephone adaptor (ATA) and continue dialling the “old fashioned way.”

PSTN vs PBX

PSTN systems are very expensive in a business setting, because all lines need separate phone numbers. Private Branch Exchange systems help save money because they eliminate the need for individual lines. Instead, all phones are connected to the central PBX, which routes calls appropriately—either to other internal phones or via VoIP.

Modern PBX systems, like 8x8 PBX, for example, are nearly always cloud-based. When you sign up for 8x8 PBX, you gain access to an enterprise-level system complete with a multi-level auto attendant, visual voicemail, and global coverage.

SIP trunk vs PSTN

Session Initiation Protocol trunking, or SIP trunking, is essentially a type of VoIP. VoIP is an umbrella term for internet-enabled telephony; SIP is a specific protocol. If you go for a VoIP option with SIP, you open up the world of multimedia communication. The 8x8 XCaaS platform is one real-world example of a VoIP system with SIP integration.

In a nutshell, 8x8 XCaaS is a cloud-based unified Communications as a Service solution. You can use the 8x8 XCaaS platform to make calls, host video conferences, send SMS messages and chat with your team. 8x8 XCaaS also comes with an integrated inbound call center, which you can modify to suit your business needs. You can analyse data and monitor calls on the platform, too.

Contact 8x8 for the right phone type for your business

Our range of business telephony products can save you money and make your life easier. Small business phone systems start at just $12 per user per month, while all-in-one communications systems cost as little as $24 per user per month.

If you’re ready to upgrade from a traditional PSTN phone system to a VoIP system or a unified communications solution, contact 8x8 today. You can request a no-obligation quote online, or dial 1-877-350-0307 to speak with one of our experts in person.