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What Is The Difference Between PSTN vs. PBX (Which One Do You Need)


PSTN vs. PBX is two types of telephone networks. They both provide an internal telephone network that connects users within a business or organization and the outside world. However, their method of connecting users differs, as PBXs connect to a private branch exchange (PBX).

A PBX is a central office that provides voice, data, and fax services for several branch offices in a single location. It also allows for shared lines between multiple users. One or more organizations may use a PBX to save money on costs associated with having different lines for each user.

A global network of interconnected voice-oriented public telephone systems is government-owned and privately-owned. PSTN, or Plain Old Telephone Service, is another name for it (POTS). It is the combination of telephone networks that use circuit switching. Except for the last link from the central-local telephone office to the user, the PSTN is now virtually entirely digital. For quick and unfettered communication within corporations.


What is PSTN? – Learn About Public Switched Telephone Network

PSTN stands for Public Switched Telephone Network. It has been used as a conventional circuit-switched telephone network since the late 1800s. This method has provided families and companies with dependable ways to connect with everyone on the planet for years by using underground copper lines. The phones go by several names, including fixed-line telephones, landlines, and plain old telephone service.

PSTN appears to be a single, sizable network of interconnected phone lines. Switches, circuits, signaling equipment, and telephones make up the actual PSTN. Different networks inside the PSTN are owned and run by numerous different firms. Linking the users who are calling and being called is the primary function of a PSTN switch. The call remains local if both users are physically connected to the same PSTN switch.

When you make a call, your call moves through the PSTN. When you dial a phone number, your call moves via the network to reach its destination. As a result, two phones get linked together—the one calling and the one being called.

  • Think about what happens when you dial a number from your phone to comprehend how the PSTN functions fully.
  • It converts sound waves into electrical impulses telephone set. The signals are then coded and sent to a terminal.
  • The terminal collects these electrical impulses, which then sends them to the primary office.
  • The central office sends the calls through fiber optic cables as electrical impulses. Finally, these messages are sent as light pulses over fiber optic cables to their final locations.
  • A tandem office receives your call. When it reaches the correct office, it’s turned into an electrical signal and routed to another terminal. At this point, it’s sent to another tandem office until it reaches its final destination!
benefits of virtual pbx

What is a PBX Line, and How Can I Get One For My Business

Private branch exchanges (PBXs) are one phone system that allows a business to have its local exchange, which means it can route all calls internally. A PBX allows you to save on the cost of having a separate line for each user.

When you have a PBX, your business can enjoy the following services: voice mail, phone forwarding, call conferencing, auto-attendant, and more. A PBX’s primary function is to eliminate the expense of each user having their line to the phone company’s headquarters.

The local exchange of the user is connected to a PBX. While all internal calls are routed via the PBX, it directs outgoing calls to a local exchange. Since a PBX often consists of software and hardware, so the price tag will be high. It is built with routers, switches, hubs, phone adapters, and telephone sets. It is comparable to setting up your switchboard where your PBX controls the switches inside.

Private Branch Exchange, or PBX, is technology companies use to handle phone calls. The term “line” or “private line” is also often used. The tools used in a PBX vary depending on the system complexity, such as whether it is a traditional PBX linked to copper telephone landlines. Whether it supports a combination of digital and analog lines, whether it uses voice over IP clouded at the enterprise, or whether it is a cloud-based PBX system.

Since they are easier to use, most businesses use PBX phone systems to manage calls. A PBX, however, is expensive to construct and operate. The actual cost varies based on the complexity of the PBX and the number of features you desire to have.

ftto switches

What Is The Distinction Between PSTN vs. PBX? You Can Find them Here.

The distinction between a PSTN vs. PBX switch is covered in this section:

  • The PSTN vs. PBX are two different types of voice switching systems. The PSTN is a telephone network that supports residential telephones, and the PBX is a switch system that supports business telephones. In addition, the scale of 64 kbps circuits used by the PSTN vs. PBX switch systems is different. A PBX can only accommodate a few thousand phones, but a PSTN can handle hundreds of thousands.
  • Within a company, a PBX supports user telephones. Residential phone service is a PSTN switch’s primary function.
  • PBX suppliers usually use proprietary protocols for their PBXs to connect and transparently convey extra functionality over their voice network. Additionally, you may only connect the vendor’s PBX to the vendor’s phones. Finally, due to vendor restrictions, corporate networks within enterprises tend to centralize around a single PBX brand.
  • A PBX is a corporate telephone network with capabilities like call transfer, call hold, call forward, conference calls, follow me, music on hold, voicemail, and call history. This process makes PSTN vs. PBX Traditional PSTN switches cannot access the majority of these functionalities.
  • Although PBXs are primarily utilized in businesses, PSTN switches connect residential and commercial customers. In addition, PBXs are often housed in corporate buildings, whereas PSTN switches are found in the central office and are used to establish the PSTN network.
  • PBXs are typically used to connect the PSTN to a private branch exchange (PBX) switch. PBXs are used for end-to-end digital transmission, use PCM switching technology, and support both analog and proprietary digital telephones. It is an intelligent device that links the PSTN vs. PBX via one or more E1 or T1 digital circuits. It supports end-to-end digital transmission, deploys PCM switching technology, and supports analog and proprietary digital telephones.
  • A PBX is an extension of a telephone system that provides call processing functions in addition to basic voice compression. The main difference between a traditional telephone system and a PBX is that PBXs support an end-to-end digital transmission and use PCM switching technology instead of dial tone signaling systems like analog signaling systems or DTMF signaling systems.

The Advantages of Private Branch Exchange (PBX)

A private branch exchange (PBX) is a telephone switch that provides users with private or local telephone service. PBXs are used in businesses and government agencies to provide end-to-end digital transmission, use PCM switching technology, and power both analog and proprietary digital telephones.

PBXs are a great way to run your business. Here are the top reasons why you should consider using a PBX:

  • You don’t have to be concerned about controlling your phone lines—your local administrator can easily add new users, convert features, or move users to new locations without contacting the carrier.
  • Local calls between PBX users or groups of PBXs are free.
  • Most PBXs have fewer than five external lines at any given time, so you don’t need as many PSTN lines as you might think.


Ultimately, which type of telephone network you choose will depend on your specific needs. However, there is no one-size-fits-all solution, and PSTN vs. PBX systems have pros and cons. While selecting the best solution for you, consult someone with experience with both. A prospective vendor may give you a better idea of the costs associated with each system and the comparison in functionality. With EPC Group’s team of certified Microsoft Teams consultants, you can have the peace of mind that comes with a unified consulting solution focused on data communications and technologies. Our consultants have deployed Microsoft Teams as unified consulting solutions for efficient audio, video, messaging, sharing, and collaboration.

Errin OConnor

Errin OConnor

With over 25 years of experience in Information Technology and Management Consulting, Errin O’Connor has led hundreds of large-scale enterprise implementations from Business Intelligence, Power BI, Office 365, SharePoint, Exchange, IT Security, Azure and Hybrid Cloud efforts for over 165 Fortune 500 companies.

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