A circuit-switched network is one that establishes a dedicated circuit (or channel) between nodes before they may communicate (example: a subscriber that makes a telephone call).
Usually, the internal path taken by the circuit between exchanges is shared by a number of conversations by means of time-division multiplexing (TDM).
PSTN and ISDN are two types of circuit-switching technology that may be used to implement a WAN.
Packet switching splits traffic data into packets that are routed over a shared network. No circuits are established and allow many pairs of nodes to communcated over the same channel using TDM.
There are two approached to the link determination:
Because the internal links between the switches are shared between many users, the costs of packet switching are lower than those of circuit switching. Delays (latency) and variability of delay (jitter) are greater in packet-switched than in circuit-switched networks. This is because the links are shared, and packets must be entirely received at one switch before moving to the next. Despite the latency and jitter inherent in shared networks, modern technology allows satisfactory transport of voice and even video communications on these networks
The route that packets of the same conversation follow is called a Virtual Circuit (VC). Therefore, a VC is a logical circuit created within a shared network between two network devices. Two types of VCs exist:
SVCs are used in situations in which data transmission between devices is intermittent, largely to save costs. SVCs release the circuit when transmission is complete, which results in less expensive connection charges than those incurred by PVCs, which maintain constant virtual circuit availability.
Examples: X.25, Frame Relay, Metro Ethernet and ATM.