A FXO (Foreign eXchange Office interface) receives service, typically from a Central Office of the Public Switched Telephone Network (PSTN).
When you connect the gateway to the CO (Telco Central Office), you plug the (FXS) lines from the telephone company into FXO ports on the Gateway. A FXO interface of the gateway is seeing by the CO as standard analog phone. Thus the gateway has to mimic a human using a standard analog phone on the FXO interface.
The behaviour of the gateway when it places an outbound call, receives inbound call or hangup a call on the FXO interface is determined by the analog FXO signaling configuration assigned to the FXO interface. Each FXO interface can have dedicated configuration or multiple FXO interfaces can share the same configuration.