Gateways operate over the entire range in all seven layers of the OSI model. Internet routing devices have traditionaly been called gateways. A gateway is a protocol converter which connects two or more heterogeneous systems and translates among them. The gateway thus refers to a device that performs protocol and convert it to a packet formatted for another protocol before forwarding it. The gateway understands the protocol used by each network linked into the router and is therefore able to translate from one to another.



Example :
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1 person from usa calling his/her friend in the uk, both the person uses different phone operator service. So both working on the different protocol. When usa person speaks, the signal will be transmitted to the uk. uk phone operator service dont know the protocol formatting and all that.
At the mean time, both need gatway between them. So gatway converts the signals in each others formate. And two person can talk.