SIP Trunks – New Trends Reveal it’s Replacing ISDN

The explosion of service providers and fast-paced growth in the hosted VoIP and SIP trunking segments illustrate that the market has not yet reached stability – either in the short-term or long-term. In such volatile circumstances, market research and analysis are important tools for everyone involved in the industry, from service providers to clients themselves.

Organizations want to know the market forecast in order to determine which technology, service or standard will give the best return on their investment. Service providers can utilize market data to fine tune their services, set prices or improve the features being offered. The analysis of forecasts and trends within any industry can also provide valuable information to regulatory authorities and government bodies and often forms the basis for modifying existing regulation or introducing new legislation.

What Are the Latest Trends in SIP Trunks?

A recent report published by The Cavell Group provides interesting insights into new trends within the SIP trunking market in the UK. Published in 2015, the data reveals significant growth in the number of SIP trunks that were deployed in 2014 by organizations. The authors of the report also provide estimates for future growth amongst various segments within the SIP trunking industry.

Growth in Small and Medium Businesses

Conventional wisdom states that smaller organizations are more likely to go with hosted VoIP services while midsize or large multinational corporations are more likely to invest in SIP trunks. This view persists even though empirical data generally shows that the best solution for a particular organization depends upon their own individual circumstances rather than any general rule of thumb.

Contrary to conventional wisdom, the latest market research shows that the maximum growth has occurred in small and medium enterprises that have between 10 to 49 employees. This segment witnessed growth of 30% in the last six months of 2014 which was much higher than the average rate of 20% for SIP trunking as a whole in the UK. The second higher growth rate in a segment was shown by large organizations (more than 1000 employees). Even very tiny businesses (those that have fewer than 10 employees) have become very interested in SIP trunking and this segment shows moderate growth as well.

Larger organizations often find it easier to migrate to SIP trunking as they already have robust networks and the underlying infrastructure to support the addition of voice traffic. But as market research shows, this does not have to be an obstacle for smaller businesses who are looking to reap the benefits of SIP trunks. In fact midsize businesses continue to lag behind in SIP trunk adoption simply because of the lack of availability of high-speed fibre access. This means that ISDN is still more cost-effective for them although it is uncertain how long this will hold true, given the increasing focus of existing providers and the entry of new vendors in the market.

SIP Trunks Replacing ISDN

One of the most important factors that impacts the availability and rollout of SIP trunking in the enterprise space is the availability of high-speed fibre access across the country. With better access and suitable prices, the majority of businesses will switch to SIP trunks for replacing ISDN lines. This is because SIP trunks often cost less – when it comes to initial purchase as well as ongoing maintenance. SIP trunks also provide flexibility and higher capacity when compared to traditional ISDN lines.

Smaller organizations often do not have existing ISDN lines or appropriate PBX infrastructure that has to be completely replaced in order to take advantage of SIP trunks. It means they are quicker to upgrade to hosted VoIP or SIP trunks depending on their needs and requirements.

On the other hand, larger organizations already have and operate MPLS VPNs and other related network infrastructure which makes it easier for them to consolidate and replace existing ISDN lines with the latest SIP trunking service. Thus growth in the midsize segment is likely to improve as providers race to improve fibre access availability for businesses in many areas in the UK. As high-speed fibre access continues to expand, more businesses are likely to implement SIP trunking prompting researchers to forecast high-growth for the next two years within the industry.

The Phasing Out Of the PSTN

The increased focus on SIP trunks is understandable given that many telecom companies and regulatory authorities around the world are already discussing how and when to phase out the existing PSTN. Even though few countries have announced exact cutoff dates, many enterprises are anticipating that it will begin sometime in 2020 or beyond.

Naturally authorities will be working to ensure that businesses or consumers are not caught unawares by the switch and that they will continue to have access to voice communication through the transition and beyond. However it is never too early for organizations to anticipate future changes and begin the deployment of alternative technology.

SIP Trunks – What Else to Expect?

The SIP trunking market is expected to show similar growth over the next 2 years across all segments with the midsize segment catching up with other businesses. Of course this growth could increase if authorities or telecom companies announce a firm cut off date for the existing PSTN as it would provide the much needed push for organizations that have been delaying SIP trunk deployment.