Let’s face it; seamless communication is the lifeblood of businesses today and statistics don’t lie. When the contracts with their carriers end, more than 60 percent of businesses will make the switch to cloud telephony (VoIP) from the traditional PSTN, thanks to the promise of seamless communication via VoIP gateways.

And according to Research and Markets estimates of 2021, the global VoIP market is projected to grow to $102.5 billion over the next five years. So, what is a VoIP gateway? And, how does it even work? Find out in this guide including the benefits of switching to a VoIP gateway.

What is a VoIP Gateway?

If you’re contemplating making the switch to a VoIP gateway, a natural question that may have crossed your mind at some point is; what is a VoIP gateway?

Simply put, a Voice over IP (VoIP) gateway is a hardware device designed to transform traditional analog phone signals into digital formats to enable transmission over the internet. Essentially, it processes the converted signal into data packets and then secures it for delivery.

These gateways play a key role in the linking of telephony systems with VoIP networks. Alternatively, they’re known as FXS gateways, SIP gateways, ATAs (analog telephone adapters) or FXS gateways

Practically, if you have analog phones and wish to make the transition to cloud-based communications, the bridge you will need is a VoIP gateway. It will help you modernize your communication infrastructure and ensure seamless integration between traditional and internet-based telephony.

How do VoIP Gateways Work?

To understand how VoIP gateways work, think of them as a vital link in the communication ecosystem. To translate call traffic into data packets for easy transmission over the internet, VoIP gateways follow two distinct pathways;

  • From Analog to Digital (PSTN to IP): When originating from a traditional Public Switched Telephone Network (PSTN), the gateway first converts the analog voice signal into a digital format. This digital signal undergoes compression using a ‘codec’. It is then fragmented into data packets which are subsequently dispatched across the Internet Protocol (IP) network.
  • From Digital to Analog (IP to PSTN): Conversely, if the call traffic originates from an IP network, the VoIP gateway takes on the role of decompressing the data packets. This action results in a digital signal, which is then reconverted into an analog format suitable for transmission across the PSTN.

The integrity of these data packets is paramount for call quality. Loss of data packets can lead to subpar call experiences.

This cannot only cause frustration for both employees and customers but also potentially affect business operations. And unlike traditional phone systems, which handle one call at a time, a VoIP gateway supports multiple simultaneous calls.

This capability significantly enhances call capacity, a crucial advantage for busy enterprises. A comprehensive VoIP gateway system encompasses key features like; voice and fax compression/decompression, packetization, control signaling management, call routing, and interfaces for external controllers.

What are the Benefits of VoIP Gateway?

Making the switch to pure VoIP from an existing legacy network is quite an expensive undertaking. So, as part of your due diligence processes, you may wonder, what are the benefits of VoIP gateway?

Well, it isn’t difficult to see why so many businesses are switching to VoIP gateways. Here are four of the most notable benefits of VoIP gateways;


For many businesses readying themselves to switch to VoIP, affordability is the key motivator. Think of this; traditional landline systems cost an average of $50 per line each month.

And this covers only local calls. On the contrary, VoIP plans come with plans as low as under $20 per line.

This means that with VoIP, you have a good chance of slashing your phone bill by more than 50%. Worth pointing out is the fact that the actual savings depend on your business needs.

Nonetheless, with a switch to VoIP, you’re certain of substantial cost reductions. With VoIP, you get savings delivered both directly and directly through reduced monthly fees and features like virtual meetings which can replace travel expenses.


When you have a virtual phone number, you enjoy the luxury of being able to use the number in any location. This can be a huge plus, especially if you’re a frequent traveler.

What’s more, it doesn’t matter even if at one point you decide to relocate your business. You can always still retain your contact details.

With this level of flexibility, you can rest easy knowing that your business communications have the least risk of being interrupted. Uninterrupted business communication also adds other benefits like improved professional outlook on your business and better accessibility.

Better Voice Quality

Let’s face it; when VoIP was first introduced, one of the issues that raised eyebrows was call quality. In the early days, it was marred with issues that ranged from poor clarity to drops and latency among others.

To fix these issues today, all you need is a stable internet connection. For many businesses that have made the switch, a stable internet connection guarantees consistent, and crisp clear VoIP calls.

These calls won’t be affected by lag and dropouts. And better yet, VoIP phones today incorporate features like noise canceling microphones and audio compression to further improve sound quality and enable focused and productive meetings.

Better Security

There is an increasing demand for stolen Personal Identifiable Information (PII) on the dark web. For individuals and businesses who already know this, safeguarding communications is non-negotiable.

With traditional phone systems often overlooking security and leaving businesses vulnerable, VoIP gateways offer a substantial boost in security. Take, for example, social engineering, a common tactic used in the exploitation of staff via fraudulent calls.

With VoIP, you have some defense against this kind of attack as it integrates robust IP technology that leverages encryption and refined identity management to repel attacks. What’s more, trusted VoIP providers invest in network security to ensure round-the-clock protection.

To further enhance the security of your VoIP system, choose a provider that does independent security audits. On your end, regularly update your OS to shield your business against emerging risk profiles, insist on sound password practices among staff and also set up alerts for any suspicious calling behavior.

Closing Thoughts!

Today, connectivity is the fuel that drives the success of many businesses and VoIP gateways help enable this by supporting seamless communication with reduced security risks. The fact that they’re able to bridge the divide between the digital and analog worlds has also completely revolutionized telephony. If you’re contemplating making the switch, look for a provider who aligns with your needTs and value security.