What Is a POTS Line, How It Works, and How It Compares to VoIP
By Natália Mrázová
| 18. March 2024 |
Business Phone SystemAutomation
By N. MrázováNatália Mrázová
| 18 Mar 2024 |
Business Phone SystemAutomation
    By N. MrázováNatália Mrázová
    | 18 Mar 2024
    Business Phone SystemAutomation

    What Is a POTS Line, How It Works, and How It Compares to VoIP

    The world is transitioning away from the use of Plain Old Telephone Service (POTS) lines for telephone communications. 

    In the USA, there will only be about 5% of landlines remaining by 2030, according to Lisa Pierce, a research vice president at market research firm Gartner. The British Government, meanwhile, is planning to have switched from analog to digital phone services by the end of 2025. 

    That suggests that the writing is on the wall for POTS worldwide, but what does that mean for you? Is your business still reliant on POTS lines and is it time that changed? Let’s dive in.

    Key Takeaways: 

    • A Plain Old Telephone Service line is a traditional landline based on analog infrastructure, such as copper wires and telephone poles. 
    • Countries around the world are transitioning away from POTS lines, meaning businesses have to find alternatives for their telephone communications.
    • Voice over Internet Protocol (VoIP) is the technology behind internet calling, which is what’s increasingly replacing POTS phone lines.
    • VoIP-based telephony holds many advantages over the POTS, including simpler setup and use, better mobility, and easier integration with other business tools.  

    What Is a POTS Line?

    POTS, short for Plain Old Telephone Service (sometimes also called Public Switched Telephone Network or PSTN), is a traditional analog voice transmission system.

    POTS lines are the physical copper wires (twisted pair) which connect endpoints as part of the network. The phone service has been the principal form of telephony since the 1880s, bridging communication for individuals and businesses alike.

    Whenever you dial a phone number and speak through a POTS line phone, your voice is transformed into an electric signal and passed to the call recipient along copper wires. The tones you can hear during the call are signals sent through those wires, as they connect your phone to a local exchange. 

    In its early days, the system was known as the Post Office Telephone Service, because customers had to rely on postal office operators to handle their calls. Once the whole process became automated and moved away from postal offices, the term was changed to Plain Old Telephone Service, but the acronym remained the same.

    How Does a POTS Phone Service Work?

    What POTS lines are hasn’t changed much since the late 19th century. However, the way they work has evolved over time. 

    How Traditional Phone Lines Worked

    Originally, when making a phone call, to reach the other person, you needed the help of an operator who would receive and then manually route the call to the final destination. They would do this by plugging copper wires into a common patch panel. 

    The longer the distance between the parties, the more work the operators needed to do. This consequently upped the price of the call.

    How POTS Modernized Phone Calls

    POTS developments helped bring call costs down by placing “switches” at specific points in the network. Through those, the call could be automatically routed to either local, national, or international locations. As a result, there was no longer any need for a human operator. 

    The network switch “listens” to the tones that have been dialed and interprets the phone number as the location you want to reach. Then it routes your call through one or several switches until it finally reaches the person or company you want to call. 

    The most important part here is that POTS has to keep the calling switches open for the whole conversation, so the electric impulses can travel from one device to another. The longer the distance between the callers, the more switches need to stay open. This tends to lead to higher call costs. 

    That’s how it still works for traditional calls, but what about those coming from or going to a business? In this case, the call is directed to a Private Branch Exchange (PBX) which acts as a switch inside the company’s office and connects multiple phones working on-site.     

    What Are POTS Lines Used For?

    As the technology is so old and its nature means call costs—especially over long distances—are often high, then what is a POTS line used for in this day and age?

    Firstly, some businesses still hold outdated views when it comes to the POTS line vs VoIP debate, particularly as regards call quality and security. 

    In the earliest days of internet calling, jitter and latency could cause problems for calls made online. However, modern calling solutions like CloudTalk can now guarantee high call quality.     

    Businesses, too, are sometimes nervous about potential cybersecurity threats if they take their calling online. While this is understandable, and cybersecurity threats are a serious matter, VoIP providers can today boast stringent security measures to protect their users. 

    Aside from those misconceptions, there are just a handful of genuine POTS line use cases:

    • Faxing – Fax communication is still important to some businesses, particularly if they need to share physical documents—perhaps, for the purpose of signatures. While online fax services do exist, the technology is comparatively young and traditional fax machines still often utilize POTS lines. 
    • Card payment processing – Small businesses that want to take credit or debit card payments may also still need a POTS line. Older-style card terminals still require a dedicated landline.     
    • Emergency lift/elevator communications – Internet connectivity is often unreliable in a lift or elevator. Their emergency communications systems, used to report faults, are often still hardwired with a POTS line as a result.   

    POTS vs VoIP: Which One to Choose?

    You should by now be clear on the meaning of a POTS phone line and how that technology works. That means you’ll also know whether your current business communications still rely on the system. 

    If they do, you might want to explore your options to modernize, and that’s where VoIP comes in. 

    Whereas POTS is the analog way of making calls, VoIP is the digital equivalent. Rather than relying on a set of cables and lots of hardware, VoIP technology uses the internet and a router to operate. 

    You can learn more about how VoIP works elsewhere. What you want to know is whether a POTS line or VoIP is the best choice for your business. Let’s look at a direct VoIP vs POTS comparison, in terms of:

    • Ease of setup and onboarding
    • Mobility
    • Costs
    • Capabilities
    • Scalability 

    Ease of Setup and Onboarding

    Businesses often shy away from changing systems, communications-related or otherwise, out of fear that setting up and implementing anything new can be difficult. 

    Ease of setup and onboarding, then, is a key factor when weighing up VoIP vs landlines

    • VoIP: VoIP-based business calling solutions like CloudTalk are designed to be quick and easy to set up. Once you subscribe, you can download the software and apps to your favored devices and get calling in a matter of minutes. Intuitive interfaces, too, make onboarding new users just as simple. 
    • POTS: Getting started with a new POTS line solution is typically a lot more complicated. Depending on what your business already has in place, you may need to get new phone lines installed, invest in more hardware, and make other significant changes. Your staff may also have to learn how to use different desk phones and related hardware. 


    Today, business is rarely limited to the office. Many people work remotely or on a hybrid basis, and plenty of jobs involve traveling. That makes the mobility and flexibility of your business calling solution a critical factor. 

    • VoIP: Mobility  is one of VoIP’s strongest points. As long as they have a stable internet connection and can access the VoIP service, your employees don’t need to be physically present in the office to answer internet calls. They can be at home, at a café, or even in the local park. 

      What’s more, virtual phone numbers—like the 160+ international numbers CloudTalk offers—make it easy for your business to establish local presences across the globe. 
    • POTS: The very nature of POTS means it’s much less mobile than a VoIP-based solution. POTS phone systems rely on physical connections (the actual landlines) to the telephony network. Such a system, therefore, is limited to use at one geographic location.   


    As with any business decision, cost also plays a major role in choosing a telephony system. Once again, there are some major differences when it comes to the cost of VoIP setups and POTS line-based solutions

    • VoIP: Do you have reliable internet access and a device that can connect to it? Then all you need is a VoIP platform subscription plan and you’re ready to start making and taking calls through the internet. That makes VoIP platforms far cheaper to start using, even for companies with tight budgets. How cheap? Check out our business phone system pricing guide.
    • POTS: First and foremost, upfront costs when installing a new on-premises phone system can be very steep. You may need to pay to have new physical lines fitted and other hardware to make the system work. Then, you’ll have ongoing fees to pay your provider, call costs, and the cost of maintaining or updating infrastructure.   


    Another key question to ask about any calling solution is “just what can it do for me?”. The features and functionalities provided by any system will determine how useful and cost-efficient it is for your business. 

    • VoIP: VoIP-based calling solutions typically provide an impressively broad set of features. CloudTalk, for instance, includes customizable IVR, call routing, three-way calling, call monitoring, and plenty more besides. Plus, the best solutions also boast high call quality, AI-powered insights, and native integrations with other business tools, like CRMs, calendars, and more. 
    • POTS: The best landline-based systems will have a decent set of calling features. You should expect to find voicemail, call forwarding, and call transfer features as standard. You may even find a system that can offer call recording and queuing. However, the breadth of functionality will always be narrower

    Learn how to choose a right VoIP package.

    VoIP vs POTS: In Summary

    To make it easier for you to see just how well VoIP compares to traditional POTS lines,  let’s have a quick recap of the pros and cons of each:

    Ease of setup and onboarding

    Considerable upheaval to install and set up.

    Can start calling in a matter of hours. Easy to learn and use.


    Limited to a single geographic location.

    Works on virtually any internet-connected device. Great for remote work.


    Installing dedicated phone lines and hardware can be costly. Plus, you must pay to maintain on-premises equipment.

    No hardware (besides a router) needed. Simple, understandable monthly fees.


    Very limited set of features.

    Incredibly broad and diverse functionalities. Plus, can be supported by AI and integrate easily with other business tools.

    Swap a POTS Line for VoIP and Secure Your Business’ Future 

    Due to how long POTS has been around, it’s understandable that some businesses are hesitant about adopting VoIP. However, the benefits VoIP can give to companies far outweigh those of using traditional analog telephone systems. 

    Flexibility, mobility, a wide range of features, and cost; VoIP wins in all those categories. 

    You need to keep in mind, too, that as POTS lines are slowly being shut down, it will become harder, and more expensive, for you to keep using your office landline. So maybe now would be a good moment to find out what Cloudtalk’s VoIP solution has to offer, and see the benefits for yourself?

    Try your risk-free 14-day CloudTalk trial now and find out for yourself!