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:

1. 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).
2. 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).
3. 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.
4. 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.
5. 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.

Frequently Asked Questions