A VoIP gateway (or PSTN Gateway) is a device which converts telephony traffic into IP for transmission over a data network. They are used in two ways:
1. To Convert Incoming PSTN / Telephone Lines to VoIP/SIP: The VoIP gateway allows calls to be received and placed on the regular telephony network. In many business cases, it is preferable to continue to use traditional phone lines because one can guarantee a higher call quality and availability.
2. To Connect a Traditional PBX / Phone System to the IP Network: The VoIP gateway allows calls to be made via VoIP. Calls can then be placed via a VoIP service provider, or in the case of a company with multiple offices, interoffice calling costs can be reduced by routing the calls via the Internet. VoIP gateways are available as external units or as PCI cards. The vast majority of devices are external units. A VoIP gateway has a connector for the IP network and one or more ports to connect the phone lines to it.