What is a VoIP Server and how is it connected to a traditional phone line or local telephone service provider?

 A VoIP Server is used to connect or switch your call. It works like a Telephone PBX  (Private Brand eXchanger), it includes: atransceiver for voice, dial tone, DTMF (Dual tone multi-frequency), call ID etc... To connect to PSTN, a VoIP device needs an adapter or a VoIP/PSTN gateway.

Usually,the trunk line from the VoIP device to the C.O. (Central Office) could is a telephone line (FXO- Foreign eXchange Office) or any  some Voice over Frame trunks like as T1 or E1.

A VoIP Server may also have additional interfaces to analog phones via FXS (Foreign eXchange Station) interface(s).
Read More:http://www.voip-news.com/rsc/VoiP%20FAQ.pdf

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