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TDM vs. VoIP: The Benefits of Migration & How to Plan

The telecom industry has undergone drastic changes over the last few decades. The ubiquity of mobility, the changing nature of the modern workforce, the convergence of voice and data networks, and the advance of cloud technology have all been contributing to the shift in business communications. The underlying infrastructure also experienced the transition from legacy TDM PBX to IP-enabled telephony systems. This blog makes a comparison between TDM and VoIP telephone solutions to show you why the migration is necessary for your company, and how to plan your first IP communications implementation.


What Is TDM?

TDM (Time Division Multiplexing) is a relatively old telephone technology that uses physical switches to route calls over copper wires. TDM PBX, as a commonly used proprietary business phone system, is designed as a cabinet with different boards to perform certain functions. In short, it relies on telephone lines and technical equipment to work.

TDM is a legacy technology that came before the internet. It is not like hybrid PBX telephone solutions in that it is not able to support IP-based telephony (VoIP). Further, there is no way to integrate TDM with other tech solutions. This is because TDM is built upon a very dated circuit-switching technology that was intended for making traditional calls. It originates in the early 1900s, versus modern packet switching technologies that are used to send information online. TDM phone service relies on electrical circuits being manually switched to facilitate traditional telephone calls. Although TDM phone technology does provide consistent quality, it lacks many significant features compared to VoIP.

What Is The Difference Between TDM & VoIP?

The essential difference between VoIP and TDM is the way they transmit calls over different networks. As mentioned above, TDM phone service relies on telecom providers to switch signaling whereas VoIP (Voice over Internet Protocol) is a group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks. VoIP converts voice into a digital signal, allowing for making calls directly from VoIP phones and other data-driven devices. Watch a one-minute video on VoIP.

Why TDM Phone Technologies Are Becoming Obsolete?

Time Division Multiplexing PBX has been used for decades and there are still many businesses using it as corporate telephone systems. However, as business telecom capabilities become more agile and integrated, this technology is being left out of consideration and phased out by several vendors. Here are a few reasons to illustrate why TDM is obsolete and has been replaced by more and more businesses. Clearly, VoIP has become the standard as it is the best tech to meet your calling needs.

  • Vendor Locked-in

One of the biggest downsides of TDM PBX is that users have to buy nearly all the hardware equipment from one vendor who will support and warranty everything from the PBX to handsets. Some companies are paying monthly rental fees to their phone service providers. You cannot shop around for the best prices and add one vendor’s fix to another’s TDM system. It is risky to stick with TDM given that some vendors no longer support its TDM products. The parts will become more difficult to find and qualified technicians for support will also be fewer. For example, major brand name Samsung Electronics America ended the sale of the OfficeServ, SCM, and related telephone and equipment in 2019.

  • Lack of Mobility

Inherently, the TDM technology is unable to provide mobility. Since it uses physical phone lines to carry voice traffic, employees are chained to their desks to make and receive calls, which becomes a major drawback for the mobile workforce. Today, employees are used to making mobile devices and desktops as office extensions to communicate and collaborate anywhere anytime. The lack of mobility greatly limits the usage of TDM PBX.

  • Difficulty in Scaling

TDM PBX has limitations when it comes to system expansion. It is configured with a predetermined number of analog phone lines. If the call volume expands or you need to add additional employees, you may need to purchase more capacity from your phone service provider and bring additional phone lines into your facility. Adding more analog phone lines means adding new boards into the system, which also makes the TDM PBX system bulky in size.

  • Dedicated IT Staff

Owning a TDM PBX brings the responsibility of management, maintenance, and configuration in-house. Dedicated IT staff is required to manage and manually update the system. You need to contact the phone service provider in advance for MACs (moves, adds, and changes) to the existing configuration. Maintenance contracts are also necessary to keep the PBX and phone work because your vendor or service provider is your only backup when things get problematic.

  • Limited Customization and Integration

Because TDM PBX is a proprietary phone system, customization is quite limited and expensive. Even minor alterations to the system require knowledgeable and trained technicians to manage and control. You can purchase additional hardware to support certain phone capabilities, such as intercom functionality. However, TDM PBX is not able to integrate into today’s business comm ecosystem, which consists of a complex series of applications. Limited to no integration with productivity tools increasingly hinders work efficiency.

VoIP Is Reigning Supreme

Although TDM PBX will continue to play a role in the marketplace, businesses have increasingly favored VoIP mostly because of potential cost savings and gains in employee productivity.

  • Lower Total Cost of Ownership

VoIP solution delivers immediate cost savings compared to the TDM system which locks businesses into long-term service contracts and expensive system overhaul. VoIP allows for leveraging the same wiring and network equipment for both voice and data traffic, eliminating costly leased lines and other centralized infrastructure required by TDM systems. Besides, the VoIP system also allows for greater connectivity options and does not require hardwiring endpoints for MACs. There is also little license fee associated with VoIP system expansion.

Blog TCO Analysis: Calculate the Real Cost of a Business Phone System

  • Enhanced Portability with Softphone

Coordinated with VoIP PBX, the softphone is an app installed on mobile phones or desktops to help employees stay connected with business contacts via their own mobile phones and computers anywhere anytime. Besides mobile and home workers, dedicated office workers also use softphones as a convenient replacement for desk phones. BYOD mobility brings cost-efficiency, employee satisfaction, improved productivity, better work-life balance, and expanded global reach. It also allows salespeople to bring their phone numbers (and loyal clients!) with them.

  • Unified Communications Solution

With the trend of digital transformation, unified communications is beginning to signal the new norm in the modern workplace. Unified communications is about making a wealth of communications channels into a single point of access. Within the UC suite of products, the voice component will be powered by VoIP technology. The vast majority of unified communication solutions rely on VoIP as the core foundation. Companies have to migrate from TDM to VoIP to enjoy the benefits of integrated comm, such as CRM integration to collect information such as name and number as they come across networks. These services simply cannot be connected to TDM.

  • Versatility of Features

Some TDM PBX vendors might also support features like call transfer, ring group, and call queue. However, they are add-on features and you usually have to pay for them separately. By comparison, VoIP PBX comes with a lengthy list of enterprise-grade features, such as IVR, conference, and voicemail to email, at no additional cost. A slew of other advanced efficiency-improving communications features is only available with VoIP phone systems.

  • Easier Installation & Management

Migrating to an IP-based phone service makes it easier to install, configure and manage. Since the same network is used for both data and voice, the setup and installation of VoIP PBX save a lot of time and effort. Unlike TDM PBX which requires the technician to be on-site to solve technical issues, IP PBX systems come with easy to use web interface and even remote management tools so that any configurations and updates can be done by the admin with a few clicks.

4 Practical Tips on Upgrading from TDM to VoIP

It makes a lot of sense in the long term to upgrade from TDM to VoIP for most companies. IP communications systems are ideal for companies of any size and any kind. However, the approach to the migration and adoption of VoIP varies depending on each company’s requirements. Here are some tips to assist your company in its IP communications implementation.

1) Plan the Migration Based on Business Needs

Determine the pace of your migration and how you will roll out the VoIP system. Do you prefer a complete replacement with an All-IP approach or a phased transition with the TDM phone service working in parallel? To what extent are you locked into contracts with your current telephony providers? It’s a good idea to review those terms before deciding how you would proceed. Consider any rights reserved clauses that may impact moving forward with changes. What kind of deployment model is suitable for your company? Is it Premise-based, cloud-based, or hybrid?

2) Assess Network Capabilities

The quality of VoIP voice calls is heavily dependent on the network. Perform a thorough assessment of the existing network to determine whether any network upgrade or extra capacity is needed. Any network latency and jitter can result in poor sound quality or dropped calls. Pay special attention to critical components such as connection reliability, data bandwidth, and the maximum call volume. Besides, you may need to set up VLAN (Virtual Local Area Network) or prioritize your voice traffic with appropriate QoS (Quality of Service) settings to free your voice traffic from network congestion and improve overall call quality.

Blog 5 Tips to Minimize Disruptions When Upgrading to VoIP

3) Secure Your VoIP PBX System

Unlike TDM PBX, an IP communications solution shares the network with data and other applications, which requires prevention against VoIP hacking and attacks coming from the Internet. In addition to the basic practices such as using strong passwords and keeping the system updated, it is essential to block unauthorized access with the firewall, restrict the use of outbound calls from each vulnerable end-point, disallow anonymous incoming calls, and set up alerts to notify you of any breaches.

Blog 7 Best Practices for Securing VoIP PBX Phone System

4) Conduct a Test Run Before the Final Migration

Test every aspect of your network and the VoIP system before the full implementation. In particular, set up a thorough plan to test internal and external calling, audio quality, significant features, compatibility of trunks and endpoints, 3rd party integration, and so on. Furthermore, a roll-back plan that allows for turning things back to the TDM option can also reduce risks if the VoIP system doesn’t perform to your expectations.

Yeastar VoIP Solution for a Pain-Free Migration

Yeastar VoIP solution comes with the fully functional S-Series VoIP PBX which supports VoIP, as well as ISDN and PSTN terminals on an IP-based connection, providing a comprehensive communication feature set. Besides, a hosted voice solution enabled by Yeastar Cloud PBX is also available if you prefer not maintaining hardware PBX equipment on-site.

If you are hesitant about the budget on a complete replacement of the existing devices, you can opt for a phased transition by using Yeastar VoIP Gateways to connect the traditional equipment with SIP service providers, which leverages the existing investment and ensure minimal disruption while reaping the benefits of IP communications.

The clock of TDM is ticking. VoIP is worth your investments.

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