A VoIP gateway handles transmitting of voice data differently than an IP PBX.

Voice conversations can be transmitted in two different ways: digital or analog.  Using a system known as VoIP (Voice Over Internet Protocol), voice transmissions are converted into data packets and transmitted over a data network.  The voice packets are turned into data packets by breaking the conversations into shorter segments, which are then put into data packets.

The main difference between the two systems is where the process of creating data packets begins.  The phone switch and user telephone are native IP in IP PBX systems.  This means that a conversation is turned into voice packets at the sender before being sent (native IP), to the receiving end where they are put back together.  In contrast, traditional PBX systems normally transmit digital conversations over the POTS (Plain-Old-Telephone-Service).  Devices such as analog faxes require packets be translated for the POTS network.  All IP PBXs are capable of performing this task.

The VoIP gateway’s job is to split the conversation into pieces and package them, creating IP packets for transmission across an IP network.  Traditional analog networks believe they are moving the data across a POTS network, however the data has been packetized by the gateway to form VoIP digital packets.  A VoIP gateway acts as a translator and enables companies to keep a system that is easily upgradeable to VoIP, while maintaining the advantage of being able to function in mixed analog/digital environments.

In a wholesale PBX system, upgrades are costly and can become even more expensive when extra cabling is required when there are too few cable pairs to transmit data.  For telephones that are power over Ethernet-enabled it is possible that two or more wires are needed.  If the traditional voice connection at a terminal is insufficient and the data connection is already in use, then a phone that is switch-enabled may be used or the cabling upgraded to a standards-based four-pair system.

If using VoIP is the goal but a locations PBX switch is completely depreciated, the only option may be a VoIP gateway.

An example of this is a business that has workplaces in three separate locations.  Location A is the businesses main office in a large city featuring a regular PBX.  Locations B and C constitute add-on locations in smaller cities.  All locations wish to employ VoIP as the communication system.  It would be necessary to install a VoIP gateway at the border of location A and be used to translate the data packets to and from the other two locations.  In this scenario, locations B and C would only need VoIP switches to communicate natively between themselves.