Telephony is technology associated with interactive communication between two or more physically distant parties via the electronic transmission of speech or other data. Long associated with voice communication, telephony has evolved to also include text messaging, video calling, video conferencing, voicemail, call recording and faxing.

A telephonic exchange historically required the use of traditional fixed-line telephones, handheld devices containing both speakers (transmitters) and receivers that connected to local exchange networks via physical wiring. Telephonic communication increasingly happens using modern computing and cellular technology, thus blurring the line between the fields of telephony and telecommunication. The definition of telephony and its scope have expanded accordingly.

Internet telephony enables users to make calls over Internet Protocol (IP) networks, at much lower cost than over the traditional public switched telephone network (PSTN). Computer applications called softphones behave like legacy telephones but without the need for standalone devices. IP telephony software can reside on a variety of computing hosts, including personal computers (PCs), smart desk phones, smart mobile phones and tablets.

How telephony works

  • How traditional telephony works. Traditional phone systems convert sound waves at one end of a call into electrical signals that travel to their destination via the wires and cables of the PSTN -- the circuit-switched telephone network that crisscrosses the globe. The recipient's phone then converts the transmission back into sound signals, enabling a real-time conversation.

    Also known as the plain old telephone service (POTS), the PTSN is operated by international, national, regional and local carriers. Its underlying infrastructure originally featured copper lines but now includes fiber-optic cabling, cellular technology and satellite systems.
  • How mobile telephony works. Using cellular technology, a mobile phone converts sound into electrical signals that it broadcasts via radio waves to a local cell tower. The cellular network uses radio signaling to forward this information to the recipient's phone, which, in turn, converts the signals back into sound.
  • How internet telephony Internet telephony software converts sound waves into data that travels over packet-switched computer networks, enabling voice calls to occur online and independent of the PSTN and cellular systems. Voice over IP (VoIP), a Layer 3 protocol and subset of IP telephony, delivers voice and other communication services, such as video conferencing and text messaging, across broadband and private IP networks.
  • How faxing works. Legacy fax (short for facsimile) technology is similar to traditional voice telephony. Instead of using sound waves as the mechanism for converting data, a fax machine's sensor encodes a printed document, which it interprets as a two-dimensional, fixed bitmap The machine then converts that graphic into electronic signals. Those signals traverse the telephone network and arrive at the receiving fax machine, which reconverts and decodes the signals, reassembling and printing them to reflect the original document.

    IP faxing, also known as fax over IP (FoIP) or virtual faxing, functions much like traditional faxing but via the internet. Software encodes a scanned document and converts it into data that can travel over local or wide area IP networks before being decoded and reconverted on the receiving end.

History of telephony

The word telephony comes from the Greek root words for far, tele, and speak, phone. In 1876, Alexander Graham Bell famously patented the telephone as a way to electronically transmit human speech, building on the success of the telegraph system. A few days later, he spoke the first words ever communicated via telephone to his assistant, Thomas Watson, who was in the next room: "Mr. Watson, come here. I want to see you." The following year, he made the first distanced phone call in history -- from Salem, Mass., to Boston -- and founded the Bell Telephone Company, which would later become part of AT&T.

The earliest telephones came in pairs, with each line directly connecting just two locations. Impractically, users, therefore, needed a separate wired device for each contact they wished to call. Soon, the invention of the telephone exchange enabled users to communicate with any other local party wired for service, with the help of a switchboard operator. Trunk lines connected individual telephone exchanges, enabling calls to take place over increasingly significant distances.

AT&T began planning a cross-country telephone line in 1908, eventually laying 3,400 miles of copper wiring from coast to coast. Engineers used innovative loading coils and vacuum tubes to amplify electrical signals as they made their way across the country.

Thirty-nine years after filing his patent, Bell inaugurated the transcontinental telephone service with a ceremonial call from New York to San Francisco. He repeated his now-famous words: "Mr. Watson, come here. I want to see you." Watson replied from California: "It will take me five days to get there now." President Woodrow Wilson and AT&T President Theodore Vail joined them on the call.

Other major milestones in the history of telephony include the following:

  • 1889. The first automatic telephone switch was invented.
  • 1956. The first submarine transatlantic telephone cable system was launched between Europe and North America.
  • 1965. AT&T deployed the first all-electronic telephone switch, enabling advanced features like call waiting.
  • 1969. The Advanced Research Projects Agency Network (ARPANET), an experimental predecessor of the internet, came to fruition with the successful interconnection of four university computers.
  • 1973. Computer scientist Danny Cohen pioneered Network Voice Protocol (NVP), the forerunner of VoIP, at the University of Southern California (USC).
  • 1983. Motorola debuted the first commercially available mobile phone. Nicknamed "The Brick," the DynaTAC weighed two pounds, took 10 hours to charge and sold for $3,995 each.
  • 1994. Smartphones became available to the public with the launch of IBM's Simon Personal Communicator.
  • 1995. VocalTec released Internet Phone, considered the first commercially available VoIP service.
  • 1999. Internet Engineering Task Force (IETF) standardizes Session Initiation Protocol (SIP), a key network protocol underlying many online telecommunication services.
  • 2003. Skype launched its revolutionary free VoIP service, later adding video functionality.
  • 2011. Google debuted the open source Web Real-Time Communication (WebRTC) project, which enables voice and video communication across standard web browsers without the use of plugins.

4 types of telephony systems for the enterprise

  1. Legacy, circuit-switched PBX. In traditional phone systems, on-premises private branch exchange (PBX) boxes act as in-house switching centers, connecting calls between internal devices directly and routing external calls to and from the PSTN via dedicated trunk lines. Human operators managed the earliest PBX systems but were eventually replaced by modern automated attendants.

    While expensive and complex -- and more or less obsolete -- legacy PBX systems have historically been most attractive in areas with unreliable network connectivity or electrical power. (Some hard-wired phone lines continue to work even in the event of electrical outages.)
  2. VoIP PBX. Similar to the traditional PBX, a VoIP or IP PBX essentially creates a private phone network within a business but does so via the internet or a private local area network (LAN) rather than dedicated voice circuits.

    Because it doesn't require a separately wired network and doesn't rely on the PSTN -- with its long-distance charges -- internet telephony is significantly less expensive than legacy PBX systems. It also offers more geographic flexibility to users, as they can access softphone applications across their devices, rather than staying tethered to desk handsets.

    On-premises IP PBX telephony systems consist of software running on servers. An on-site IP PBX typically offers more sophisticated feature sets and greater reliability than a cloud-based VoIP service (see below), but it is also more expensive and complex to deploy, manage and maintain.
  3. Hybrid PBX. Some organizations deploy a hybrid PBX model that uses both legacy and IP telephony technology -- whether for redundancy, cost savings or to enable a staged migration to VoIP. These environments use gateways to bridge VoIP and PSTN functionality.

    Alternatively, some use the term hybrid PBX to refer to a VoIP telephony system with both on-premises and cloud-hosted resources.
  4. Cloud VoIP. Cloud VoIP, also known as cloud telephony or cloud calling, is a VoIP service provided by a third party. By outsourcing its system, an enterprise can eliminate the need to provision, manage and maintain an on-site IP PBX, reducing infrastructure costs and increasing scalability. Features, functionality and controls tend to be less comprehensive than on-premises options, although many analysts expect that difference to shrink with time.

Telephony platforms and vendors

Today, enterprises can choose from a plethora of on-premises and cloud-based VoIP telephony vendors, from major carriers to up-and-coming startups. They include the following:

  • 8x8
  • AT&T
  • Avaya
  • Broadvoice
  • Cisco Webex
  • Dialpad
  • Fuze
  • Google
  • Microsoft
  • Mitel Networks
  • Nextiva
  • RingCentral
  • Verizon
  • Vonage
This was last updated in July 2020

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