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What is a VoIP Gateway and how does it work?

What is a VoIP Gateway?

A VoIP gateway is, in its simplest form, 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 to a digital signal. The digital signal is then compressed using what is called a ‘codec’ and split into a series of ‘data packets’ which are transferred over the Internet Protocol (IP) network.

2. When call traffic originates from an IP network, the VoIP gateway decompresses the data packets into a digital signal which is then converted into an analog signal to be sent over the PSTN.

These data packets are the lifeblood of any internet calling system as they dictate call quality – loss of data packets can lead to poor quality calls which frustrate employees and customers and can even negatively 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 businesses.

VoIP gateway systems typically include the following features:

⚫ Voice and fax compression/decompression

⚫ Management of packetization and control signaling

⚫ Call Routing

⚫ External controller interfaces

Why did the VoIP phone arrive late to the meeting…? He got stuck in traffic!

You can always tell when new technology is becoming mainstream – the corny jokes are starting to do the trick!

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

But what about a VoIP gateway? It may be a less common term these days, but it’s likely to see an increase in usage in the months and years to come as more and more businesses continue to switch to digital phone systems. and are looking for ever more efficient ways to manage call traffic.

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

Man with headset using VoIP gateway in front of computer screen

VoIP gateways offer many advantages, the most important of which is the ability to allocate and manage costs more effectively. (Image credit: Photo by Andrea Piacquadio of Pexels)

VoIP gateways have many advantages, especially for companies that are switching from one type of calling system to another.

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

The biggest advantage of a VoIP gateway is therefore that of cost. Moving an entire office or organization to VoIP can be costly. In addition to the cost of new equipment, there are also IT infrastructure and support costs to consider. With a VoIP gateway, however, these costs are more easily managed and can be spread over a longer period, which most CFOs and CFOs will be very happy about!

Additionally, you can choose a VoIP gateway system optimized for minimal or “least cost” routing by directing specific calls to the provider that will charge the least per minute.

On top of that, VoIP servers can and often fail. VoIP gateways, however, have so-called “fallback” modes that fail over to the PSTN if the Internet is down.

These days, many businesses are opting for a “hybrid” approach that combines on-premises equipment with VoIP gateways. This allows them to enjoy many of the benefits of VoIP while retaining their existing infrastructure and equipment that they know is reliable and familiar.

Oh, and watch out for so-called “fully hosted PBX systems” – they’re also a growing trend these days as they offer a complete telecommunications system without the hassle of buying and managing hardware. additional. However, if for any reason you lose your connection to the Hosted PBX, you lose the ability to make internal and external calls.

What are the different types of VoIP gateway?

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


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

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


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

Other terms that are useful to know when exploring VoIP gateway solutions are:

VoIP GSM Gateway

GSM stands for Global System for Mobile Communications and is used for direct routing of IP, digital, analog and GSM networks. With these devices, businesses can take advantage of the “Least Cost Routing” option we mentioned earlier.

PSTN Gateway

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

Much depends on your existing phone system as to the best gateway solution. If you are currently using analog, you will need an analog gateway. If you want to upgrade your flexibility, you should consider a digital solution. And if cost optimization is high on your priority list, it’s worth exploring the VoIP GSM gateway option.

How to configure a VoIP gateway?

IT helpdesk administrator in black suit jacket sitting at the table

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

The specifics of installing and configuring a VoIP gateway will depend a lot on the system you have. You can usually find detailed instructions from your provider through their website or helpline. For example, beroNetone of the most popular gateway solutions, explain their online beroNet configuration process. Or Grandstreamanother supplier, has its own detailed setup instructions for Grandstream online gateways.

The basic steps are quite similar from solution to solution.

What you will need before you start:

  • An internal telephone device with external connectivity via VoIP over the Internet.
  • The PSTN interface to a telephone network, with IP connectivity to an internal VoIP telephone system.
  • PSTN and VoIP interfaces externally.

Steps to configure a VoIP gateway:

Final Thoughts

The world of telecommunications has grown by leaps and bounds in recent years, with many businesses now relying on VoIP for their core business. VoIP Gateway is also a popular method for businesses looking to ease the transition to VoIP technology while leveraging existing IT equipment and infrastructure.

Pardon the pun, but it’s a great “gateway” to a much simpler and more efficient VoIP system that helps reduce IT costs and keep your business running. Plus, the benefits of VoIP gateways make them a smart choice when trying to spread out upgrade costs while maintaining a high call quality business system.

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