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SIP vs PSTN – The key differences you need to know

For any business, efficient and cost-effective communication is crucial. As digital technology advances, more options have become available when considering methods of telephony. 
SIP vs PSTN – The key differences you need to know

Gone are the days when a landline was your only option, although its reliability and familiarity means it still plays a part in modern-day business communication. However, more and more businesses are considering using alternative methods to the traditional phone system. 


SIP stands for Session Initiation Protocol, using the Internet to make calls from computers and mobile devices. It is one of the technologies challenging the previous dominance of PSTN (Public Switched Telephone Networks). PSTN is simply an abbreviation for traditional phone networks, consisting of the familiar phone lines, cables and transmission links. 

One of the main differences to consider between these two forms of telephony is PSTN operates on a one user per line basis while SIP can have multiple users per line. As SIP uses the Internet it means it removes the need for traditional copper wiring and merges all business voice calls and data traffic on to one network. To operate a SIP protocol you will require:

  • A SIP address used as a communication handle, which some providers can provide for free
  • A SIP client, a program which is installed on a user’s computer or mobile device
  • Sufficient bandwidth on your internet connection


Being able to easily increase communication capacity or have the flexibility to react to fluctuations in demand can have a significant impact when deciding on a telephone network. When you need additional capacity on your landline phone system it can often be weeks before the physical new lines are installed and ready for use. SIP is a virtual installation and when there is a need to increase capacity it is far easier and far quicker to scale up.

For any VoIP technology such as SIP, a business needs to ensure they have the bandwidth to cope with the voice and data traffic they send out over their internet connection. Yet the flexibility within SIP also means you can scale down just as quickly as you can scale up, allowing you to react to changes in demand such as seasonal fluctuations. 

Cost Implications

One of the primary attractions for businesses toward SIP is the potential to reduce their costs. SIP uses the Voice Over Internet Protocol (VoIP) which treats voice signals in the same manner as other digital packets.. They are typically cheaper,  which makes SIP a tempting prospect!

Any calls between employees will also be free as internal calls do not require any connection to the PSTN. Internet-based telephony is more efficient, which can see businesses which use SIP pay smaller charges per minute when calling clients with landlines and mobiles, while even long-distance calls will be cheaper as your connection time to the PSTN will be reduced. As SIP is installed over your existing Internet connection as one point of entry only instead of several analogue lines, it reduces the cost of incoming lines.


SIP has many benefits, including lower costs and easier scalability. Although it requires greater bandwidth capacity there are further practical benefits to consider; such as SIP not being geographically dependant, meaning you can move premises to another location and keep the same numbers. Although for some the new range of choice can at first seem a little daunting, in a world where communication is so key for a business, time spent on installing the right infrastructure could see positive practical and financial rewards.

If you’re considering making the switch for your business, we are here to help and guide you through the process. Contact us to find out how we can help you upgrade.

Dynamic Insights & advice

Dynamic Networks completes a Management Buyout and commences its acquisition strategy.

"David Smith (CEO) and Gareth Leece (COO) have successfully completed an MBO of Dynamic Networks, working with Paul Landsman of Kingland Capital. The MBO provides for a simplification of the Board structure to allow for its continued accelerated growth strategy. The additional investment secured through Kingland Capital provides a significant fund for the Management Team to hire likeminded industry professionals in-line with its hiring plan and also acquire complimentary Cloud Managed Service Providers as they continue their objective to be one of the fastest growing MSP’s in the UK with a strong reputation for quality service. Further announcements to follow."