Packet-Switched vs. Circuit-Switched Telephone Systems

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As the UK prepares to phase out landlines (aka the Big Switch Off), there is no better time to look at the different telephone systems.

We’ll cover both circuit-switched and packet-switched telephone systems in this article. If you want find the best phone systems on the market, check out our best business VoIP providers guide.

What is a circuit-switch telephone system?

Circuit Switched Telephone Systems are used by the Public Switched Telephone Network (PSTN). PSTN is in the process of being turned off and by January 2027 will no longer work. To prevent your business from losing service, switch over to a VoIP system prior to the cut-off date. Some providers will do this automatically, reach out to your current provider to confirm whether or not this will happen for your business.

It works with standard analogue telephones where you have one line that allows you to make or receive calls. A circuit switched telephone system has a single, dedicated connection between two end points in a network.

This is also referred to as a Plain Old Telephone System (POT).

When using a circuit switched telephone system, once a call has been placed the line is no longer free. The entire bandwidth of the line will be in use and will remain so until the call has been disconnected.

If someone calls you whilst you are already having a telephone conversation, they will receive an engaged signal and the connection will not be made. There will also be no way of telling that someone has tried to call when you hang up the telephone.

A good way of explaining circuit switching is to look at early telephone exchanges where a caller would ask an operator to connect them to a specific number. The operator would physically connect the call by plugging a cord into a jack.

The circuit switched telephone system uses copper wires to transfer voice data and this is the system still used in most homes with BT being the lead UK supplier. It is restricted to 50kb per second.

In the days of dial up internet connections, you were not able to make telephone calls whilst using your phone line to connect to the internet. In September 2013, BT announced that they will not longer be providing dial up connection.

With modern forms of connecting to the internet, it’s no longer necessary to use your telephone line as a dedicated internet connection – and for this reason one must then start to question whether the Circuit Switched Telephone System itself is indeed still relevant, or whether it too will soon be replaced.

What is a packet-switched telephone system?

Packet switching is currently the most modern form of telephone system and used by VoIP systems. Instead of using one line and one communication channel dedicated to a single call, packet switching divides the call data up into small units, known as packets.

These packets are transmitted independently through a network and will find available network space allowing for multiple communication sessions to take place simultaneously.

Each packet will find its own route to the final destination. However, if the network bandwidth is swamped then the quality of the call can suffer.

Due to PSTN being switched off, telephone systems will have to be run via a packet-switched network.

Circuit switched telephone systems vs packet switching

With a traditional circuit switched system, the main advantage is that because you have a dedicated line for the phone call, there should be no interruptions to the call. The line will be clear and the quality will be consistently good, especially when making local calls.

It is impossible for the line to become congested, as often happens with packet switched telephone systems.

However, with PSTN being turned off, phone systems will no longer run on a circuit switched system, despite the advantages it may provide.

However, circuit switched telephone systems are becoming outdated and are therefore more expensive compared to more modern switching and routing, especially considering line rental and the high cost of making international calls.

Also, unlike the modern systems (including mobile phone systems and VoIP) a tradition circuit switched system does not let you know when someone has tried to contact you whilst you are already on a call.

How to find the right system for businesses

Due to PSTN being switched off by January 2027, the future of telephone systems lies in VoIP. While switching can be overwhelming for businesses, there a few factors to keep in mind:

  • Value for money
  • Integrations
  • Inbound + outbound comms
  • Scalability
  • Customer support

Based on our guide to the best business VoIP providers, 8×8 takes the number one spot as it scores the highest on our independent research. 8×8 has been found to be the best all-around provider as it has a wide-range of features, strong security, and reliable customer support.

However, 8×8 doesn’t do so well in the pricing department. GoToConnect offers more affordable options as do the other providers on the page, although you should be aware that these providers do come with less features.

8×8 also doesn’t perform well in the spam prevention area. If this is something that is important to your business, alternative providers that perform better include GoTo and Vonage.

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Written by:
Aimee profile image
Aimee is Expert Market’s resident telephone systems and point of sale go-to. If she’s not writing about business products, you’ll find her daydreaming about dog walking on Dorset beaches.