Public Switched Telephone Network (PSTN)

The Public Switched Telephone Network (PSTN) dramatically enhanced the way we communicate, changing the world forever in the process. No longer were we forced to send letters to one another or physically travel to talk with someone. But what precisely is the PSTN, how does it work, and why is it still so important?

What is PSTN?

PSTN refers to the world’s collection of interconnected voice telephone networks. Often called the Plain Old Telephone Service (POTS), it’s simply the normal phone network, and was for a long time composed of underground copper wires and telephone lines.

Recent times have seen a shift towards digital communication tools on IP networks, which is overall commonly referred to as VoIP (Voice over Internet Protocol). But this hasn’t been the death knell you might have expected for PSTN. Digital platforms like Microsoft Teams can actually be connected to the traditional network using integration technology such as SIP Trunks and an IP-enabled PBX (Private Branch Exchange). Any time you place a call to a phone number, regardless of whether it’s through a digital device or traditional telephone, you’re probably doing so through the PSTN.

How does PSTN work?

The network works by converting sound waves (your voice) into electrical signals that are transmitted to another phone through cables. These signals initially go to the caller’s local central office (or local exchange), which then identifies the number being dialled and routes it to that individual’s phone. Finally, the electrical signals are converted back into sound waves, enabling almost instantaneous communication. 

Direct Routing for Microsoft Teams
Why Is PSTN Calling Important?

Why is PSTN calling important?

The ability to place a phone call is one of the most underrated methods of communication in modern business, particularly when it comes to external stakeholders. Not only are PSTN calls more reliable considering they’re not dependent on an Internet connection, they are also much less susceptible to cyberattacks and often easier to use than most modern communication methods.

The dramatic shift towards hybrid working (both in offices and remotely) has only heightened the need for PSTN integration. However, most business collaboration tools are not equipped to offer this, resulting in disparate communication systems with multiple systems and disjointed workflows. This can hugely reduce productivity, hamper user experience and lead to higher costs for businesses.

However, one tool is a notable exception to this: Microsoft Teams. It has become the leading tool for placing a standard PSTN phone call, making it the go-to solution for businesses around the world wanting to unify their communications systems.

How to enable PSTN calling with Teams

Microsoft Teams PSTN calling does not come standard with your Teams or Microsoft 365 licence, though there are Microsoft options for integrating this capability within Teams. However, third-party alternatives may serve you better. Below are the three main options.

Use of Cross Launch Apps

A number of calling apps provide Microsoft Teams PSTN calling capabilities that are accessible from the platform. This is achieved through software overlays and quick launch options.

However, this isn’t true integrated calling. Although this lets you ring somebody else using Teams, another application ultimately makes that call. This creates a disjointed workflow and prevents any integrated conferencing capabilities.


Use of Microsoft Phone System and Calling Plan

Microsoft’s solution to PSTN calling with Teams is Phone System. This is a licencing requirement and a control tool that offers basic call management functionality, but doesn’t actually provide that much on its own. Phone System is included with Microsoft 365 E5, but otherwise needs to be purchased separately.

To actually place calls with Teams, you need a Calling Plan, which has a number of pricing and minute package options, including both domestic and international calling. This diagram shows those options in relation to Direct Routing (more on this soon).

All in all, Microsoft's Phone System does deliver a fully integrated outcome — you get federated presence, centralisation of data, and one tool for all communication.

The problem with this solution is that it isn’t a sophisticated control tool. Traditional corporate phone systems control calling with a PBX (Private Brand Exchange). Microsoft compares Phone System to a PBX, but you won’t get the same level of control. For example, Phone System does not provide:

  • Call recording: Which can be a problem for compliance and training.
  • Individual call reporting: This can make it hard to control individual users and usages.
  • Poor call queue management: Which may make managing a large volume of calls challenging.

Although this option will let you place PSTN calls and engage in conference calls, it’s unlikely to entirely unify your communications system.


Use of Direct Routing

Direct Routing facilitates Microsoft Teams PSTN integration, letting you enjoy a fully-functional business telephony system that’s better than just using the Microsoft platform alone. This solution delivers:

  • Complete PBX control: You can get access to reporting, cost control and queue management tools.
  • Endpoint and handset flexibility: Direct Routing lets you keep your existing hardware and legacy software, embrace Bring Your Own Device and invest in the right tools for the job.
  • Unified communication: You have complete access to call records and contacts, a single sign-in point, and federated presence across all devices and channels.
  • Reduced costs: The right provider can deliver Direct Routing at a lower cost than Microsoft’s Calling Plans.

Full disclosure: we provide one of these “third-party” solutions here at Callroute, and can get you up and running in minutes with a free channel for life and flexible per-channel pricing. Our tool was built to enable users to replace their phone system with Teams, and get the most out of business collaboration. Get in touch if you want to try our solution or learn more about it.

How to set up PSTN calling with Microsoft Teams

Automated Integration

Integrate Direct Routing

If you want to replace your standard PSTN phone system with Teams and centralise your communication on a single collaboration platform, you need Direct Routing. This will enable you to place and receive PSTN calls from Teams just like you would using legacy endpoints and handsets. Adding an Audio Conferencing licence then enables full flexibility to call external users directly, or include them within broader Teams-based conferencing. The Microsoft platform has the potential to be the only communication tool your business needs.

Place External Calls Within Teams

Integrate Fully-Functional PSTN and Teams capabilities

But in order to make that a reality, you need to integrate fully-functional PSTN calling and conferencing Teams capabilities. Direct Routing can deliver that solution. Here at Callroute, we can get you up and running with a free channel for life in minutes. You just need to be a Teams user and have a Microsoft Phone System licence — we take care of the rest, including number porting and 24/7 customer support. Try it out free, and then scale up the number of channels after you see the results.

If Microsoft Teams isn't your main collaboration platform, Callroute can support you with alternative service integrations including Cisco Webex, Genesys Cloud CX, and existing legacy equipment such as PBX's. Discover our Callroute SIP Trunk integration solution for more information.

How to set up PSTN conferencing with Teams

In order to set up PSTN conferencing with Teams, you need to follow these steps:

Step 1

Obtain an Audio Conferencing licence

No matter which Teams PSTN calling options you choose, conference calls are done the same way — you just need an Audio Conferencing licence. Again, this is included in Microsoft 365 E5, but otherwise has to be purchased separately. Although there are pay-per-minute options, it probably makes more sense to get a licence from £3 per-user/per-month.

Step 2

the licence

To work, only the meeting host needs an Audio Conferencing licence. When activated, it assigns a toll (or toll-free) number to users who dial into that meeting from their phone. If you have a Direct Routing solution, this call could actually be placed by Teams. Either way, it provides a PSTN bridge to the conference call.

Step 3


Once enabled, you can effectively just use the option like you would with other meeting setups within Teams. Users can join the conference meeting directly from the Microsoft tool, from a calendar link, or dial in using the number provided in the invite.

Centralises Information

Pro tip

If you have a Direct Routing solution and an Audio Conferencing licence, users can set up “On-network Audio Conferencing”. When appropriately configured, this routes the dial-in options through your own network — reducing costs. However, this is only available to internal users, not third-party dial-in numbers.


While PSTN uses circuit-switched telephony between two points during a call through copper wires, VoIP essentially utilises packet-switched telephony. This means real-time voice signals get transmitted between IP addresses through a wifi or ethernet connection.

No, with Callroute’s Direct Routing solution, you can continue using the traditional telephone network via Teams.

Among the main benefits of using PSTN are enjoying almost 100% uptime, massively private connections, the ability to handle huge amounts of traffic and ease of use.

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