What is PSTN and Why Some Still Love That Copper Wire

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PSTN, also known as the Public Switched Telephone Network, is a telephone system that has been in use for more than a century. It operates by using copper wires and dedicated circuits or channels for placing calls. And despite the rise of smartphones and mobile devices, PSTN still plays a vital role in many workplaces.

By tracing back to its origins and understanding how PSTN functions, we can get a better sense of exactly why some modern-day businesses are still making use of technology that’s well over a hundred years old.

A Brief History of PSTN

Back in the 1800s, manually operated telephone exchanges gradually transformed into automated switching systems. This innovation allowed communication networks to span over increasingly larger geographical areas by using copper telephone lines. Eventually, the PSTN developed a vast infrastructure capable of routing calls across states and countries.

Then, once fiber optic cables began supplementing copper wiring in the 1980s, call capacities were enhanced significantly. During its peak in the 1990s, 95% of households in the United States had access to PSTN services.

However, due to its functionality being less than fully future-proof, the popularity of PSTN wouldn’t last forever.

How PSTN Functions

The operation of PSTN relies on a network of copper wiring switches, trunk lines, and various other infrastructure-related elements that facilitate landline connections.

When a call is made, a dedicated circuit path is established between both parties involved. This circuit remains open throughout the duration of the call, even if there are pauses in conversation.

PSTN Architecture graphic from Nextiva.

Key Components of PSTN

First, you have your central office (CO). This is the telephone exchange where the automatic switching equipment is located and used to direct phone calls.

Second, you have your outside plant. An outside plant refers to the cables and wiring that connect the CO’s distribution frames to the customer on the other end. Of course, the outside plant often requires thousands of miles of cables to make this possible.

Next, in order to transmit communication across miles and miles of copper wire, the system requires signaling. Signaling involves using a mix of analog and digital signals to establish connections that initiate billing and carry audio across the cables.

In this context, signaling protocols such as SS7, R2, and V5 are used. You also have your trunk lines, which are the connections between CO switches that are operated by service providers. These trunk lines are key for enabling national interconnection. Alternatively, there can also be wiring in local loops, which connect directly from the CO to the customer on the other end.

When you put it all together and make a call, the switches begin by identifying the correct loop to send the audio signals to. Then, they request connections between the trunk lines and maintain the active circuit until the call is completed.

Why do some companies still rely on PSTN?

Despite how VoIP (Voice over Internet Protocol) systems make up the majority of today’s best phone systems for businesses, there are several reasons why some companies still depend on legacy copper phone lines.

For starters, the limited availability of high-speed internet in rural areas can make VoIP less practical in some cases. Meanwhile, the PSTN provides service where broadband internet simply isn’t an option.

Additionally, PSTN often ensures reliable call quality, which may outweigh any advantages offered by VoIP.

PSTN also comes in handy when VoIP communication fails. This is great for mitigating any risks due to internet failures and outages. There are also many outdated systems that often need PSTN connections to function reliably, such as fax machines, alarms, and POS terminals.

Lastly, some businesses resist upgrading their systems due to the effort and cost involved—even if it means higher long-term costs with the PSTN.

PSTN vs. VoIP. What are the drawbacks of using PSTN?

Despite its advantages, PSTN has its fair share of shortcomings. First and foremost, merely installing and maintaining all the cabling, such as switches and other key infrastructure, is expensive—and this high cost of upkeep and maintenance ultimately gets passed on to consumers who are likely to seek more affordable alternatives.

Moreover, PSTN also lacks support for advanced features that many modern businesses rely on—such as video calling, web conferencing, and instant messaging.

PSTN isn’t the most flexible solution, either. Its scalability for call centers is limited due to its reliance on physical ports. In certain areas, there may only be one or two PSTN providers available, resulting in high prices and inadequate service quality.

Alternatively, the best VoIP phone systems transmit calls over the internet, which means they don’t rely on physical infrastructure like PSTN. To be more specific, VoIP converts audio into data packets that travel through IP networks. While only consumers and small businesses used this method of communication initially, larger enterprises now widely use VoIP systems as well.

VoIP also offers several advantages to end users. For one, it offers significant cost savings because it utilizes existing data networks instead of dedicated physical infrastructure. VoIP also allows for the integration of voice and data on a network, in addition to offering features like video, instant messaging, and screen sharing.

Compared to PSTN, a VoIP system makes a better option for call centers in most cases because it offers call routing, monitoring, management, and analytics options that are easier to scale.

At the end of the day, traditional PSTN technology can still serve a purpose, but many businesses are looking for a way out before it’s too late or too costly to switch.

How much does it cost to install PSTN?

When it comes to PSTN service costs, the installation fees typically range from $50 to $200 for standard inside wiring and a single jack. If multiple phone lines are required, installation costs increase accordingly.

Once installed, a monthly PSTN service typically costs about $20 to $40 per line, depending on features like call waiting, voicemail, and unlimited long-distance calling options. Additional expenses may include the addition of corded phones, cordless phones, and answering machines—which can add to the setup’s overall cost and complexity.

What are the costs for businesses using PSTN services?

Similar to normal users, the costs for businesses vary based on the number of phone lines needed, the types of phones used, and the calling plans chosen. Typically, the cost for PSTN service per user each month ranges from $30 to $50.

In addition to these fees, there may also be upfront expenses like installation charges, the costs of purchasing phone equipment, and setting up an on-premises phone system called a Private Branch Exchange (PBX). These systems are responsible for routing calls and connecting to the PSTN.

Small PBXs can cost a thousand dollars, while larger enterprise or call center-grade PBXs may run up into the millions. Of course, these systems come with their own specialized hardware and software, which adds to their complexity.

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