In contrast to circuit switching, packet switching splits traffic data into packets that are routed over a shared network. Packet-switching networks do not require a circuit to be established, and they allow many pairs of nodes to communicate over the same channel.

The switches in a packet-switched network (PSN) determine the links that packets must be sent over based on the addressing information in each packet. The following are two approaches to this link determination:

Because the internal links between the switches are shared between many users, the cost of packet switching is lower than that of circuit-switching. However, delays (latency) and variability of delay (jitter) are greater in packet-switched networks 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 video communications on these networks.

Click the Play button in the figure to see a packet-switching example. In the animation, SRV1 is sending data to SRV2. As the packet traverses the provider network, it arrives at the second provider switch. The packet is added to the queue and forwarded after the other packets in the queue have been forwarded. Eventually, the packet reaches SRV2.