How SIP Trunking Works

VoIP and SIP have become well-known buzzwords in the enterprise communication market, with many businesses switching over to the IP-based technology in order to take advantage of innovation and low prices. What started out as a geeky hobby for a few individuals and small startups has quickly become the standard for voice communication in both the consumer and business spheres.

When it comes to VoIP, there are two types of models that are most commonly deployed – hosted VoIP and SIP trunking. Especially in the business sector, each VoIP deployment can be considered unique in the sense that it is tailored to the particular organization’s requirements in one way or the other. Nonetheless they can be generally categorized as hosted or on premise, although sometimes a company may utilize a mix of the two (this is still rare).

How SIP trunking works

To understand SIP trunking, an introduction to SIP is necessary. SIP stands for Session Initiation Protocol and is the dominant format used for IP telephony. This is a protocol that establishes a VoIP session on the Internet – the session can be a simple voice calls between two participants, conference calling between multiple individuals including handling calls for mobile devices or anything in between.

SIP trunking works exactly like the enterprise T1 or PRI lines on the PSTN that connected businesses with the telco office. Instead of routing voice calls over copper lines and dedicated circuit-switched networks, SIP trunking involves sending the voice calls over data networks such as the Internet or enterprise LAN.

What does SIP trunking require?

Typically speaking, VoIP service over SIP trunks are provided by an ITSP rather than a traditional carrier. Companies usually need a PBX box that can support or is compatible with SIP – also called VoIP or IP PBX. The IP PBX can be configured according to the needs of the business and for various number of lines, DID numbers and other resources.

Other than the fact that the IP PBX is capable of routing calls over data networks, it can also differ from more traditional PBX systems in a number of other ways. An IP PBX will have support for the extended range of communication services offered by VoIP providers and configuration is not very difficult.

Apart from the SIP trunk and IP PBX, IP phones will be needed to make and receive calls. As businesses move towards mobility, more enterprises are using a mix of desk phones, softphones on computers and mobile devices. Technically these are called SIP endpoints or SIP clients and there are a wide variety of configurations possible such as several devices pointing to the same number. Such flexibility allows employees to take a call regardless of which device happens to be nearby (their personal mobile phone, IP phone or laptop while traveling etc.)

The benefits of SIP trunking

With SIP trunking, the vast majority of calls never touch the PSTN network especially calls between employees within the same organization (even if they are in different offices). Other calls will travel over the PSTN for only a tiny fraction of the entire distance, thus reducing call charges to be paid. Switching over to SIP trunking can reduce your organization’s phone bill by as much as 30 to 40%. It becomes even more useful for companies that make a lot of long-distance calls or receive inbound toll-free calls.

For companies that have established a presence in different countries, SIP trunking allows them to have virtual numbers with local codes in various markets. It lets customers, suppliers and partners in these locations to contact the business as if it had a local number instead of using the more expensive 800 numbers. These virtual numbers can help the business establish a foothold in foreign markets even before they open the office and employee start working.

Organizations can enjoy all the advantages provided by VoIP without having to abandon existing infrastructure, thus extending its life. The total cost of ownership is much lower with SIP trunking than hosted VoIP as long as the organization has the resources for initial investment. Companies also have much more control regarding the level of customization and timing of upgrades rather than relying on an external vendor.

The costs of SIP trunking

With every new technology, there are certain benefits and drawbacks. There are very few services or products that can be classified as always beneficial, if indeed any exist. It is up to each individual company to decide which set of compromises it is willing to live with in exchange for the benefits. The same is true with SIP trunking.

If a company chooses to invest in SIP trunking, it must be prepared with the resources, time and effort to set up and maintain the equipment. Depending on the size of the company, dedicated teams who have knowledge of VoIP, SIP and IP telephony may be required. The IT or communications team will be in charge of repairs, maintenance, upgrades and all other aspects of the deployment.

SIP trunking also requires investment for the initial set of hardware and purchasing SIP trunks from the ITSP. Although the return on investment is pretty substantial and can be quickly recovered, some organizations simply do not have the capital. They may also lack expertise in this area.

Getting started with SIP trunking is not difficult but the organization must fully understand the technology, how it works and the cost-benefit analysis before deployment. For many enterprises, SIP trunking is the most suitable choice in an increasingly globalized and digitized business environment.