VoIP Gateways Explained: How They Work & Why They Matter

By December 2025, many regions will begin sunsetting the public switched telephone network (PSTN), putting businesses with analog phone systems on a ticking clock. Digitimes Asia notes that countries across Asia, in particular, will be the most affected because many rural areas haven’t adopted modern telecommunication technologies just yet.

Around the world, telecom companies are trying to modernize and invest in the latest tech. But for businesses that rely on fax machines, on-premises PBXs, or offices with mixed infrastructure, ripping everything out and switching to a VoIP phone system overnight isn’t a practical move.

VoIP gateways help teams bridge the gap between analog and digital, so they can transition to internet-based calling at their own pace without losing service, hardware, or reliability. Let’s break down what a VoIP gateway is, how it works, and how to know if your business actually needs one.

What Is a VoIP Gateway?

So, what is a VoIP gateway, and how does it work? A VoIP gateway is a hardware device that converts traditional analog voice signals into digital packets for VoIP (Voice over Internet Protocol) networks, and vice versa. It acts like a translator between two different phone systems. Legacy analog lines and PBXs are on one side, while modern VoIP and Session Initiation Protocol-based (SIP) systems are on the other.

This allows companies to keep using analog devices (like desk phones, fax machines, or intercoms) while gradually transitioning to an IP-based phone system. Instead of replacing every device in your office, a gateway allows legacy hardware to speak VoIP. In short, a VoIP gateway lets businesses make and receive internet-based calls without ditching their existing infrastructure.

This flexibility is especially important for teams with critical analog systems. Take, for example, door entry intercoms, paging units, or fax machines tied to compliance workflows. Rather than disrupt daily operations, a VoIP gateway gives businesses the breathing room to modernize on their own terms, one line or location at a time, instead of needing to instantly change everything all at once.

VoIP Gateway vs. Analog Telephone Adapter (ATA)

VoIP gateways and analog telephone adapters (ATAs) both connect analog devices to VoIP networks, but they’re built for very different use cases. The right choice for your company entirely depends on your scale, infrastructure, and long-term plans.

ATA: Simple retrofit for a single device

An ATA is a small device that lets one analog phone or fax machine connect to a VoIP network. These are typically used for residential setups or very small offices where only one or two devices need support. Note that:

• Most ATAs have just one or two foreign exchange subscriber (FXS) ports (for analog phones or fax machines).
• They’re plug-and-play and affordable and require minimal configuration.
• They’re ideal for home users or teams with a single legacy device that needs to stay online.

For example, if a remote employee wants to keep using their old desk phone at home, an ATA can connect it to the business VoIP system. This reduces the effort to modernize technology, and it also lessens the learning curve for employees who are more used to traditional telecommunication methods.

VoIP gateway: Enterprise-grade connectivity

A VoIP gateway, on the other hand, is built for office-wide deployments. It supports multiple lines, integrates with PBX systems, and can handle a variety of voice traffic at scale. If your goal is to keep a large team connected, this is the best system for your business.

A VoIP gateway:

• Comes in models with two to 24+ ports (FXS, foreign exchange office, or FXO, or digital lines like T1/E1)
• Can route internal VoIP calls, manage outbound/inbound traffic, and compress voice packets for bandwidth savings
• Often includes advanced features like call routing rules, protocol translation, and fax support via the T.38 codec

In terms of use case, it’s best for you to use an ATA if you’re connecting one or two analog devices. However, if you’re dealing with bigger teams, choose a VoIP gateway if you’re supporting an entire office or multiple systems during a phased migration to VoIP.

How Does a VoIP Gateway Work?

At its core, a VoIP gateway functions as a two-way translator between analog and digital networks. It handles a few key technical tasks behind the scenes to make calls flow smoothly. Here’s a step-by-step guide on how it works.

1. Signal conversion

The gateway converts analog voice signals into digital VoIP packets for internet transmission and converts incoming digital packets back to analog if the receiving device needs it. If someone calls from a traditional landline, the gateway router converts their analog signal so it can travel across your VoIP network to your softphone or cloud PBX.

2. Compression and decompression

To save bandwidth, VoIP gateways compress voice data using codecs like G.711 or G.729. On the receiving end, the signal is decompressed for playback. By doing this, the gateway makes sure that the call quality is clear without hogging network resources, especially in high-volume environments.

3. Call routing

Admins can configure the gateway to route calls based on destination, time of day, or load balancing rules. It directs traffic between analog lines, SIP trunks, and internal extensions. Local calls might use a nearby PSTN line as a router, while long-distance ones go over the Internet to be less expensive.

4. Protocol translation

Many legacy phone systems use protocols that don’t speak SIP or H.323 natively, which conflicts with the technology, as the SIP protocol powers VoIP. VoIP gateways handle this by converting between VoIP protocols and traditional telephony signaling.

Types of VoIP Gateways

The best VoIP gateway depends on the infrastructure you already have. You need to see whether you have analog lines, digital trunks, or a mix of both. You also need to determine how you plan to scale your voice system.

Here are the main types of VoIP gateways:

Analog VoIP gateways

These devices connect standard analog phones, fax machines, or legacy PBXs to a VoIP network using FXS or FXO ports.

• FXS ports connect to analog endpoints (like desk phones)
• FXO ports connect to analog phone lines (like a PSTN wall jack)

This is ideal for businesses that want to keep analog phones in circulation while moving voice traffic to the cloud. Top analog VoIP gateways include the Grandstream HT818, known for its high sound quality, and AudioCodes MediaPack 112, which offers robust interoperability.

Digital VoIP gateways

Designed for enterprise-grade telephony, these gateways connect to digital trunk lines, such as T1, E1, or BRI ISDN. It’s typically used by on-premise PBX systems. They:

• Support high call volumes and multi-line configurations
• Work well with legacy PBX hardware that uses digital signaling

These gateways are best for larger businesses migrating from ISDN (Integrated Services Digital Network) to SIP or consolidating global PBX systems. Examples include the Patton SmartNode 4171 and the Grandstream GXW4501, both offering secure call handling.

Hybrid VoIP gateways

These offer a mix of analog and digital ports, giving IT teams more flexibility during transitions. They’re:

• Useful for locations with a mix of legacy equipment and modern infrastructure
• Allow for gradual migration across departments or locations

If you’re a multi-site business rolling out VoIP in phases, this is the best option for you. These gateways are more accommodating to different types of technology because of how they’re set up.

Session border controllers (SBCs)

These aren’t gateways in the traditional sense, but they’re often grouped together. SBCs manage VoIP traffic across firewalls, ensure call security, and maintain quality of service (QoS). Some enterprise gateways include SBC functionality, and they’re typically used by carriers or very large businesses. Enterprise SBCs are best for organizations managing complex SIP call routing or requiring advanced VoIP security.

The key to getting the best gateway is choosing hardware that fits your infrastructure today while supporting where you want to go tomorrow. Nextiva offers reliable, enterprise-grade VoIP hardware designed to support hybrid transitions, remote offices, and everything in between.

Benefits of Using a VoIP Gateway

For businesses that aren’t ready to go fully cloud-based, a VoIP gateway provides a smart middle path. It helps you modernize your communication systems without giving up the analog systems you already rely on. Here’s how VoIP gateways add value during hybrid or phased migrations:

Phased migration

A gateway allows you to adopt VoIP gradually — department by department or office by office — without interrupting service. For example, if you still use an analog phone system for your front desk, you can still keep it while transitioning the sales team to cloud-based softphones.

Preserve investments

Many analog devices still work perfectly. Gateways let you extend the life of PBX systems, fax machines, paging systems, and more while moving toward VoIP.

Lower costs

Instead of a full hardware refresh, you can upgrade selectively, which helps reduce capital expenditures and avoid unnecessary purchases.

Simplified IT management

VoIP gateways offer centralized call routing, flexible dial plans, and custom logic, giving IT teams better control over call flows and voice traffic.

Global office connectivity

Use gateways to route calls over IP from one location to another, helping reduce long-distance costs and unify global communication.

SIP trunking compatibility

Most gateways work seamlessly with SIP trunks, letting you add scalable call capacity without changing your existing phone system.

Fax-over-IP support (T.38)

If you need to keep using fax for regulatory or legal reasons, many gateways support the T.38 codec, enabling reliable faxing over IP networks.

When Does a Business Need a VoIP Gateway?

Not every business needs a gateway. But if you check any of the boxes below, it might be the right fit for now. You likely need to use a VoIP gateway if:

• You’re using an analog PBX but want to move to cloud calling without downtime.
• Your business operates across multiple locations with mixed infrastructure.
• You’re preparing for the PSTN shutdown but don’t have the resources, time, or workforce to upgrade everything at once.
• You still rely on analog systems like door entry intercoms, elevator phones, or fax machines that are difficult to replace.

VoIP gateways provide the technical bridge and operational breathing room to handle all of the above. By doing so, you can migrate on your timeline instead of someone else’s.

Are VoIP Gateways Always Necessary?

The short answer is not always. If your business is starting fresh or already uses fully digital signals and communication tools, a VoIP gateway might be unnecessary.

Many VoIP providers (including Nextiva), for example, offer end-to-end solutions that eliminate the need for external hardware. From SIP trunking to cloud PBX systems, everything is handled through the internet.

Gateways are helpful in hybrid environments. However, once your team is ready for a 100% cloud transition, it may be more cost-effective to sunset legacy hardware altogether.

Future-Proof Your Business with Nextiva

With the PSTN sunset on the horizon, every business needs a plan for transitioning to digital voice. Nextiva provides the flexibility and support to match your strategy. The platform is fully compatible with leading VoIP gateways, enabling hybrid setups that integrate seamlessly with your existing infrastructure.

You can combine analog and VoIP systems across departments using Nextiva’s hybrid cloud architecture, all while syncing call data into your CRM for deeper customer insights. Nextiva’s award-winning support team is here to help configure and optimize your gateway, and as you’re ready to scale, Nextiva’s migration-ready platform grows with you.

Ready to build your VoIP strategy on your terms? Talk to our team today and explore the best-fit solution and price for your business. 👇

Common Questions About VoIP Gateways