What Is PSTN and How Does It Work?
PSTN (Public Switched Telephone Network) is the global network of circuit-switched telephone systems that has connected voice calls for over a century. It encompasses the copper lines, fiber optic cables, switching centers, cellular networks, and undersea cables that make traditional phone calls possible. For enterprise organizations, understanding PSTN is essential when planning telephony strategy -- particularly when migrating to Microsoft Teams Phone, which requires PSTN connectivity for external calling. At EPC Group, we architect PSTN connectivity solutions that optimize cost, call quality, and compliance for organizations with 100 to 50,000+ users.
How PSTN Works: The Technical Foundation
Despite its age, the PSTN is an engineering marvel that reliably connects billions of phone calls daily. Here is how a traditional PSTN call works:
- Call initiation -- When you pick up a phone and dial a number, the signal travels from your handset through local wiring to your carrier's Central Office (CO).
- Number translation -- The CO uses the dialed digits to determine the destination and routes the call through the appropriate switching hierarchy (local, tandem, toll switches).
- Circuit establishment -- A dedicated circuit is established end-to-end between caller and recipient. This circuit reserves bandwidth for the duration of the call, guaranteeing consistent voice quality.
- Voice transmission -- Analog voice signals are digitized (using PCM encoding at 64 kbps per channel) and transmitted across the network via T1/E1 lines, fiber optic cables, and microwave links.
- Call termination -- When either party hangs up, the dedicated circuit is released and the bandwidth becomes available for other calls.
PSTN vs. VoIP: Understanding the Difference
The transition from PSTN to VoIP (Voice over Internet Protocol) is the defining trend in enterprise telecommunications:
- PSTN: Circuit-switched -- Dedicates a physical circuit for each call. Guarantees bandwidth but is expensive (each channel occupies 64 kbps whether or not anyone is speaking).
- VoIP: Packet-switched -- Converts voice to data packets sent over the internet. More efficient (packets only sent when someone speaks), dramatically cheaper, but dependent on network quality for call clarity.
- SIP trunking -- The bridge between VoIP and PSTN. SIP (Session Initiation Protocol) trunks connect your IP-based phone system to the PSTN network, allowing VoIP phones to call traditional phone numbers. This is the technology behind Microsoft Teams Direct Routing.
- The convergence -- Modern carriers are decommissioning legacy PSTN infrastructure and replacing it with IP-based core networks. Calls that appear to be "PSTN" are often VoIP on the carrier backbone, only using traditional copper for the "last mile" to the customer.
PSTN Connectivity Options for Microsoft Teams
Microsoft Teams Phone requires PSTN connectivity to make and receive calls to external phone numbers. Microsoft offers three options:
- Microsoft Calling Plans -- Microsoft acts as your phone carrier. They provide phone numbers and PSTN connectivity as a monthly add-on to Teams. Simplest to deploy (no third-party providers), but limited to countries where Microsoft offers calling plans. Best for small to mid-sized organizations with straightforward calling needs.
- Direct Routing -- Connect your own SIP trunk provider to Teams through a certified Session Border Controller (SBC). Gives you full control over carrier selection, pricing, and call routing. Requires more technical expertise to configure and maintain. Best for large enterprises with existing carrier relationships, multi-country deployments, or specific regulatory requirements.
- Operator Connect -- A managed carrier integration where your telecom provider connects directly to Microsoft's cloud through a pre-built integration. Easier than Direct Routing but with more carrier choice than Microsoft Calling Plans. Supported carriers include AT&T, Verizon, BT, and dozens of others.
- Teams Phone Mobile -- Uses your existing mobile carrier's SIM-enabled phone number as your Teams phone number. One number for both cellular and Teams calls. Still emerging with limited carrier availability.
Enterprise PSTN Considerations
Planning PSTN connectivity for an enterprise involves several critical decisions:
- Number management -- Enterprises may have hundreds or thousands of phone numbers (DIDs), toll-free numbers, and international numbers. All must be inventoried, migrated, and properly assigned in the new system.
- E911 compliance -- Federal law (Kari's Law and RAY BAUM's Act) requires enterprises to provide Enhanced 911 service that automatically transmits the caller's location to emergency dispatchers. Microsoft Teams supports dynamic E911 with location-based emergency routing.
- Call recording and compliance -- Industries like financial services and healthcare require call recording. Teams supports both policy-based and compliance recording through certified third-party solutions (NICE, Verint, ASC Technologies).
- International calling -- Organizations with offices in multiple countries need a PSTN strategy for each region. Direct Routing with regional SIP trunk providers is typically the most cost-effective approach for multi-country deployments.
- Failover and redundancy -- PSTN connectivity is business-critical. Redundant SIP trunks, geographic failover, and backup cellular connectivity ensure calls continue even if the primary internet connection fails.
Why EPC Group for PSTN and Teams Phone Solutions
- Carrier-agnostic consulting -- We are not affiliated with any telecom carrier. We evaluate all options (Microsoft Calling Plans, Direct Routing, Operator Connect) and recommend the best fit based on your specific requirements, budget, and geographic footprint.
- Enterprise-scale deployments -- We have deployed Teams Phone with PSTN connectivity for organizations with 10,000+ users across multiple countries, managing number porting, SBC configuration, and call routing complexity.
- Compliance configuration -- We configure E911, call recording, retention policies, and DLP for organizations in regulated industries (HIPAA, FINRA, FedRAMP).
- Network readiness -- We perform network assessments to ensure your infrastructure supports voice quality requirements before deploying Teams Phone with PSTN connectivity.
Need PSTN Connectivity for Microsoft Teams?
EPC Group designs and deploys PSTN solutions for Microsoft Teams Phone -- from simple Microsoft Calling Plans to complex multi-country Direct Routing architectures. Get a free telephony assessment.
Frequently Asked Questions
Is PSTN being shut down?
What is the difference between PSTN and ISDN?
Do Microsoft Teams calls use PSTN?
How much do Microsoft Calling Plans cost?
What is a Session Border Controller (SBC)?
Microsoft Strategy: 2026 Considerations for What Is Pstn And How Does It Work
EPC Group 29-year Microsoft consulting heritage matters specifically because Microsoft platform decisions today are layered on top of 25 years of architectural choices: Active Directory schema decisions from 2005 affect Microsoft Entra ID Conditional Access policy design in 2026; SharePoint 2003 information architecture decisions affect Copilot grounding quality in 2026. The firms that can navigate that depth (fewer than a dozen Microsoft Solutions Partners in North America) have a structural advantage on enterprise Microsoft migrations.
Microsoft Solutions Partner status (six designations: Data and AI, Modern Work, Infrastructure, Security, Digital and App Innovation, Business Applications) replaced the legacy Microsoft Gold Partner program in 2022. EPC Group held Gold Partner status from 2003 to 2022 (the oldest continuous Gold Partner in North America) and currently holds all six Solutions Partner designations; a credentialing footprint shared by fewer than 50 firms globally and typically used by Microsoft field teams as a vetting gate for enterprise Customer 0 nominations and named-account engagements.
Decision factors EPC Group evaluates
- Enterprise architecture roadmap
- Cost optimization and licensing audit
- Microsoft platform capability assessment
- Vendor consolidation analysis
- Compliance and governance posture review
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What Is Pstn and How Does It Work — the EPC Group practice
This What Is Pstn and How Does It Work explainer is part of EPC Group's practitioner library. The audience is enterprise IT, compliance, and architecture leaders evaluating Microsoft technology choices for Fortune 500 and regulated-industry environments. Content reflects real production experience, not vendor marketing.
EPC Group ships What Is Pstn and How Does It Work as part of broader Microsoft 365, SharePoint, Power BI, Azure, and Microsoft Copilot engagements. The decision criteria, deployment patterns, and governance considerations covered here come directly from senior architect playbooks honed across 11,000-plus enterprise engagements.
Senior-architect-led delivery
Every engagement is led and staffed by 15 to 20 year veterans. No rotating juniors learning on your tenant. The bench includes hundreds of Microsoft-certified consultants who have shipped real production environments for Fortune 500 customers across SharePoint, Microsoft 365, Power BI, Azure, and Microsoft Copilot.
How EPC Group engages
Six-phase methodology applied to every engagement, compressed for fixed-fee accelerators and extended for full programs.
- Discovery — two-week assessment of the current estate, gap analysis, risk register, target architecture, costed remediation roadmap.
- Design — senior architect produces the target topology, identity framework, Conditional Access, Purview, governance model, and security posture, reviewed by client leads.
- Pilot — 25 to 100 user pilot in a real business unit. Migrate, apply baselines, test integrations, capture feedback.
- Wave rollout — migrate in waves of 500 to 2,500 users with communications, training, hypercare, and a per-wave retrospective.
- Adoption — role-based training, Champions network, executive sponsor enablement, metrics tracked against a measured baseline.
- Operate — optional managed-services retainer for license optimization, governance reviews, security monitoring, and quarterly business reviews.
Healthcare and life sciences
For hospitals, payors, and pharmaceutical companies, EPC Group enforces HIPAA, business associate agreements, and Microsoft Purview sensitivity labels for protected health information. Epic and Cerner integration patterns are part of our regulated-industry library, alongside 21 CFR Part 11 e-signature controls for clinical trials and validated SharePoint document workflows for life-sciences manufacturing.
Government and defense contractors
For federal agencies and CMMC-regulated suppliers, EPC Group delivers FedRAMP Moderate and High posture, GCC and GCC High tenants, CUI handling, and ITAR-controlled data segregation. Errin O'Connor (CEO and founder) is a contributor to the FedRAMP framework; that direct authorship shows up in how we architect Conditional Access for government endpoints.
Compliance-native, not bolted on
Zero governance audit failures across 11,000-plus enterprise engagements. HIPAA, SOC 2, FINRA, FedRAMP, and CMMC controls are engineered into the tenant on day one with audit-ready evidence. The regulated-industry posture is the baseline, not an upgrade tier.
Engagement models
Three engagement models cover most enterprise needs. Most clients start with a fixed-fee accelerator and grow into a full program or a managed-services retainer.
- Fixed-fee accelerators — Copilot Readiness, Security Hardening, Tenant Health Check, SharePoint Migration, Teams Governance. Defined scope and price. Typical range $25,000 to $150,000 over four to twelve weeks.
- Project engagements — full migration or governance program with milestone-based billing. Discovery through hypercare. Typical range $150,000 to $750,000-plus over three to nine months.
- Managed services — tiered retainer for ongoing operations. Named senior architect on the account. From $3,500 per month with a twelve-month minimum.
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