Business Phone Systems: VoIP vs. PSTN

Many businesses are struggling with the choice of switching over to voice over Internet protocol (VoIP) or staying with their current phone system through the public switched telephone network (PSTN). Both systems have several advantages and disadvantages, so the type of phone system you choose will depend on the needs of your business. To help with this decision, we have broken down the benefits and drawbacks of each system.

VoIP Phone System


  • Transmission of data, voice, and video can occur simultaneously
  • Scalability; upgrading and extending a VoIP system only requires a software upgrade and an Internet connection
  • Extra features, such as call waiting, forwarding, transferring, and emergency calling, is provided free or at a very low cost
  • Remote extensions typically come standard
  • Free VoIP to VoIP calling locally and internationally
  • The Internet is used as the backbone of the network, significantly minimizing hardware costs
  • Easy and non-intrusive installation


  • Sound quality is dependent upon Internet bandwidth availability
  • Service terminates when Internet connectivity is lost. Businesses need to have a continuity plan in place to protect themselves and maintain operations
  • 911 calls are typically untraceable – making it difficult for emergency services to identify your location if the connection is lost

PSTN Phone System


  • Well established technology, making it very reliable
  • Excellent audio quality
  • Hardwire systems typically remain intact during power outages, allowing for businesses to maintain connectivity
  • 911 calls are traceable – allowing emergency services to identify your location if the connection is lost


  • No free calls can be made
  • Extra features, such as call waiting, forwarding, and transferring, is an additional cost
  • Only voice can be transmitted during a call
  • Installation costs can be high, as proprietary hardware and telecom expertise is required
  • Limited Scalability; upgrading and expanding your phone system is a costly and complex process
  • Remote extensions typically require their own dedicated line, which can be costly to install

Reviewing the benefits and drawbacks of each system, it becomes evident that a traditional PSTN phone system can be more costly for your business. It also becomes clear that VoIP has an advantage over PSTN when it comes to scalability and special feature availability. Many businesses are hesitant to abandon their traditional landline phone system simply because it’s familiar (the phrase “if it’s not broken, don’t fix it” comes to mind). However, this isn’t about the integrity of PSTN phone systems – it’s about utilizing the best technology for your business, and VoIP is capable of delivering more value for less cost.

To learn more about VoIP technologies, check out this video.

Blog Author: Vanessa Hartung

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