What is a VoIP gateway and how does it work?

What is a VoIP gateway?

A VoIP gateway is, at its simplest, a device – or bridge – that converts call traffic into data packets to be transmitted over the internet.

This happens in one of two ways:

1. When the call traffic originates from a Public Switched Telephone Network (PSTN) and needs to be converted from an analog voice signal into a digital one. The digital signal is then compressed using what’s known as a ‘codec’ and broken into a series of ‘data packets’ that are transferred across the Internet Protocol (IP) network.

2. When the call traffic originates from an IP network, then the VoIP gateway will decompress the data packets into a digital signal that’s then converted into an analog signal to be sent across the PSTN.

These data packets are the lifeblood of any internet call system as they dictate call quality – data packet loss can result in poor quality calls that frustrate employees and customers alike and can even have a negative impact on your business.

With traditional phone systems, one call is converted at a time, whereas with a VoIP gateway, multiple calls are supported simultaneously, increasing call capacity for busy companies.

VoIP gateway systems typically include the following features:

⚫ Voice and fax compression / decompression

⚫ Packetization and control signalling management

⚫ Call routing

⚫ External controller interfaces

Why was the VoIP phone late to the meeting…? It got hung up in traffic!

You can always tell when a new piece of tech becomes commonplace – the corny jokes start doing the rounds!

And it’s easy to see why VoIP has recently followed this well-trodden path given our remote ways of working since 2020.

But what about a VoIP gateway? It’s perhaps a term that is less common right now but is likely to see increasing usage in the coming months and years as more and more companies continue to switch to digital phone systems and look for ever more efficient ways of managing call traffic.

In this article, we’ll set out what a VoIP gateway is, how it works, what the different types of gateway are, and how to set one up.

Man With Headphones using VoIP gateway facing computer monitor

VoIP gateways offer many benefits, the biggest of which is the ability to spread out and manage costs more effectively. (Image credit: Photo by Andrea Piacquadio from Pexels)

VoIP gateways have many benefits, especially for businesses transitioning from one type of call system to another.

With VoIP gateways, you can, for example, migrate in phases, keeping your existing hardware in place to keep new costs down. By using existing equipment, you subsequently reduce training and set-up times for your teams.

The biggest benefit of a VoIP gateway is, therefore, one of cost. Changing over an entire office or organization to VoIP can be costly – in addition to the cost of new equipment, there’s the infrastructure and IT support costs to factor in too. With a VoIP gateway, however, these costs are more easily managed and can be spread out over a longer period of time – something most Finance Directors and CFOs will be very glad of!

What’s more, you can choose a VoIP gateway system that optimized for minimal or ‘Least Cost Routing’ by directing specific calls to the provider that will charge the least per minute.

In addition to this, VoIP servers can and often fail. VoIP gateways, however, have what are called ‘fallback’ modes that switch to the PSTN if the internet is down.

What a lot of businesses opt for nowadays is a ‘hybrid’ approach that combines on-site equipment with VoIP gateways. This enables them to get many of the advantages of VoIP while still retaining their existing infrastructure and equipment that they know to be reliable and familiar.

Oh, and watch out for what are called ‘Fully Hosted IPBX systems’ – they’re also a growing trend nowadays as they offer a full telecommunication system without the hassle of buying and managing additional hardware. However, if for any reason you lose your connection to the hosted IPBX, you lose the ability to make both internal and external calls.

What are the different types of VoIP gateway?

There are two main types of VoIP gateway, analog and digital.

Analog

As the name suggests, an analog VoIP gateway is used to connect your traditional analog telephones to a VoIP phone system, or to connect your VoIP phone system to the PSTN. These gateways are typically available for between 2 and 24 lines and come in two different forms, both of which often appear as ‘media gateways’ to:

FXS (Foreign Exchange Subscriber) gateway – used to connect your traditional telephones (and fax machines) to a VoIP phone system.
FXO (Foreign Exchange Office) gateway – used to connect your VoIP phone system to your PSTN lines.

Digital

Once again, the clue is in the name! Digital gateways are used to connect your VoIP phone system to your digital voice lines – either BRI ISDN lines (for Europe), PRI / E1 lines (for Europe), or T1 lines (in the US).

Other terms it’s worth knowing about when exploring VoIP gateway solutions are:

VoIP GSM Gateway

GSM stands for Global System for Mobile Communications and is used for routing IP, digital, analog, and GSM networks directly. With these devices, companies can take advantage of the ‘Least Cost Routing’ option that we mentioned earlier.

PSTN Gateway

A PSTN (Public Switched Telephone Network) gateway is a third-party hardware component that converts signalling and media between the Enterprise Voice infrastructure and the PSTN, either directly or through connection to SIP trunks (more on SIPs and SIP trunks here).

It very much depends on your existing phone system as to which gateway solution is best. If you’re currently running on analog, then you’ll need an Analog Gateway. If you want to upgrade on flexibility though, then you should consider a Digital solution. And if cost optimization is high on your priority list, then it’s worth exploring the VoIP GSM Gateway option.

How do you set up a VoIP gateway?

IT helpdesk administrator in Black Suit Jacket Sitting at the Table

Setting up a VoIP gateway should be done by your IT administrator or external supplier. (Image credit: Photo by ANTONI SHKRABA from Pexels)

The specifics of setting up and configuring a VoIP gateway will very much depend on the system you have. You’ll usually be able to find detailed instructions with your supplier either via their website or their support line. For example, beroNet, one of the most popular gateway solutions, explain their beroNet configuration process online. Or Grandstream, another supplier, has their own detailed set-up instructions for Grandstream gateways online.

The basic steps are pretty similar across solutions.

What you’ll need before getting started:

An internal telephone device with external connectivity through VoIP via the Internet.
The PSTN interface to a telephone network, with IP connectivity to an in-house VoIP phone system.
Both PSTN and VoIP interfaces externally.

Steps to follow to setup a VoIP gateway:

Final thoughts

The telecommunications world has come on in leaps and bounds in recent years, with many businesses now relying on VoIP for their core operations. VoIP Gateway is additionally a common method for businesses looking to ease the transition to VoIP technology while still leveraging existing equipment and IT infrastructure.

Pardon the pun, but it’s an excellent ‘gateway’ to a much easier and more efficient VoIP system that helps to reduce IT costs and keep your business running. What’s more, the benefits of VoIP gateways make them a smart choice when trying to spread out upgrade costs while still retaining a professional, high call quality system.