Advantages

Asynchronous Transfer Mode has many properties that make it more suitable than legacy protocols such as Ethernet and Token Ring. The fixed cell size makes for fast and simple hardware switching over typical packet switching. In a typical synchronous, time-division-multiplexed protocol, each attached node only has a certain time window in order to transmit data. If the node does not need servicing, all other nodes must wait for that time window to pass before they can transmit. If a node needs a large amount of data, it can only receive small portions at a time due to the fact that other nodes must be checked upon. With ATM, though, a node can receive a desired bandwidth when needed, rather than a smaller, dedicated bandwidth. If it does not need servicing, it is not checked. When the node needs a large amount of data, transmission can occur without interruption at a rate defined in the quality of service header. Streaming audio and video can thus be delivered without delay.

ATM is considered to be a "connection-oriented" protocol because every cell transmitted only has one set path to take to its destination, unlike a packet-switched network. Cells are always received in their correct order, and the hardware does not need to make a decision as to which path the cell will take. The ATM switch needs only to look at the destination address and the cell is immediately forwarded to the proper endpoint.

Different service classes are available in order to provide specialized service to certain nodes if necessary. Class information is provided in the quality of service portion of the header area.

Due to its small, fixed cell size, ATM is great for "bursty" applications such as video and audio (especially voice). Voice, video, and data can all be transferred across an ATM network, eliminating the need for separate systems. Many ISPs use ATM backbones to improve data transmission rates as well as to provide different service levels to different customers with differing needs.