SIP trunking allows any organization to upgrade its offline PBX to an internet-powered business phone system. Managers can use the technology to leverage VoIP's power to consolidate business communication systems, improve call quality and save money.
Here are the basics of SIP trunking, how the technology works, and strategies for finding a SIP trunking provider that offers the services your business needs.
What is SIP trunking?
A Session Initiation Protocol (SIP) trunk is the digital version of an analog trunk line that lets users make outgoing calls and receive incoming ones. A SIP trunk allows a business to make local or long-distance calls over the internet without using traditional phone lines.
Businesses often adopt SIP trunking to reduce phone expenses or take advantage of cloud-exclusive features. For example, a digital phone system is much easier to monitor with analytics tools that can track critical information about business phone calls, including frequency, length, audio quality and the number of missed calls. This capability provides the company with important data about how it uses telephone systems in day-to-day work.
How does SIP trunking work?
In an analog system, physical trunk lines connect the business's private branch exchange (PBX) to the public switched telephone network (PSTN).
A PBX is a private telephone network that allows the phones in your office to connect with each other and outside callers. A PBX system routes inbound and outbound calls and has advanced features like call blocking and call forwarding.
Using SIP trunks, a virtual version of analog trunks allows a SIP provider – typically called an "internet telephony service provider" – to take advantage of a business's existing PBX hardware. It can effectively connect that PBX to the cloud rather than directly to the PSTN.
SIP trunking accomplishes this with Voice over Internet Protocol (VoIP), which digitizes a caller's voice and transmits communications over an IP network. In almost all cases, this network will be the internet.
The technology supports a business's phone systems, bringing the cloud's scalability, cost benefits and analytics features to its landline. Switching from analog connections can also improve call quality.
Businesses can also use the computer hardware they've already invested in to make phone calls.
What's the difference between SIP trunking and VoIP?
Businesses sometimes use the term "SIP trunking" interchangeably with "VoIP." While the two are closely related, they are different, and investing in VoIP doesn't necessarily mean investing in SIP.
VoIP technology lets users make phone calls via business broadband internet connection. This is also sometimes called "internet telephony" or "broadband telephony." You can place calls via the cloud rather than directly through the PSTN.
SIP trunking takes advantage of VoIP to allow businesses to place and receive calls via the cloud. VoIP can be used independently of SIP by using alternative signaling protocols like H.323 and MGCP.
Like SIP, these protocols are a set of rules that help VoIP determine how it will establish or disconnect calls over the internet.
H.323 and MGCP function slightly differently from SIP, but all three protocols have roughly the same goal: leveraging VoIP to connect and disconnect phone calls using the cloud.
VoIP can function using digital phones (IP phones) and analog phones. VoIP will use a separator box or similar device, called an "analog telephone adapter," to convert an analog signal to a digital signal that can be sent over the internet.
Pros and cons of SIP trunking
SIP trunking can be a worthwhile investment for businesses that want to digitize their phone lines, but the technology isn't perfect. Consider these pros and cons when deciding whether to invest in a SIP trunk upgrade.
SIP trunking pros
- Access to cloud-exclusive features: SIP trunking enables the use of SIP analytics, depending on the provider. These features can include call-quality metrics, call tracking and call screening. This information can be invaluable. For example, customers have come to expect near-immediate responses to complaints and questions. If they reach out to a business and can't get in touch right away, they may become frustrated. Anticipating customer needs is an essential part of any effective customer service strategy. Data on how well your team responds to phone calls will allow you to anticipate those needs more effectively and avoid missed or dropped customer calls.
- Lower operating costs: Once installed, SIP trunking can significantly reduce the cost of a business phone system. The price of a SIP trunk is typically lower than that of a comparable analog phone line. SIP trunking can provide other savings by reducing the cost of long-distance and international calls, toll-free numbers, and additional monthly charges. These savings are often significant. Lumen Technologies estimates that companies can save up to 65% with SIP trunking, an average of $39,000 every year.
- High scalability: Virtual phone systems are often very easy to expand. If your business needs additional lines or toll-free numbers, you may be able to contact your SIP trunk provider and upgrade right away without getting new hardware. This can be a major benefit for businesses that grow quickly or have unpredictable phone system needs. Your phone system can scale up or down as your requirements change, allowing you to instantly provide numbers to new employees or cut phone system costs when existing lines are no longer needed.
- Improved call quality: SIP trunk-based phone systems offer better audio than analog versions. These systems ensure all calls have the bandwidth they need to deliver extremely clear audio, helping to prevent echoes, static and dropped calls. High-quality audio can be a significant trust signal. When the voice of a sales rep or customer service team member comes through clearly, customers may view them as more professional or reliable. In addition to making your team easier to understand, better call quality can make them appear more trustworthy.
SIP trunking cons
- High cost of installation: SIP trunk-based phone systems are often cheaper to maintain than analog phone systems in the long run, but installation can be costly. While you likely won't need to replace each element of your PBX, you may need to make a few upgrades, such as having a gateway capable of converting SIP to PRI. Entirely replacing the existing PBX is also possible, but that will be even more expensive. A provider will charge a one-time setup fee when implementing a SIP trunking system. You'll also have to pay for a new 411 directory listing. Porting over old phone numbers is possible and typically desirable, as you won't have to update your contact information on the web. Each number being ported will cost you, however. For large telephone systems, this can get expensive quickly, and the process can also require a significant administrative investment. You will need to ensure the new phone system has been properly configured, legacy phone numbers have been ported, and 411 directory information has been updated.
- Unique maintenance requirements: Like analog phone systems, SIP trunk-based phone systems are not immune to failure or error. If your SIP trunking phone system isn't working as expected (or at all), you may have to reach out to the provider. With the right knowledge, though, it's often possible for SIP trunking end users to troubleshoot basic problems independently. For example, an IP phone that can't connect to the SIP server may experience frequent issues with call connectivity. Your IT team may know to check the configuration of your firewall before reaching out to the SIP provider.
- Internet reliance: With SIP trunking, if the internet goes out, your phone system goes out. Bundling your phone system and internet won't typically be an issue, but it may make contacting your internet service provider more difficult in the event of an outage.
How to choose a SIP trunk provider
Your SIP trunking provider will significantly impact your business's SIP trunking benefits. Research providers before investing in a SIP trunking upgrade to ensure your choice offers the services and resources you need.
When you're choosing a business phone system with SIP trunking, look for a provider that offers these key benefits:
Network ownership
The SIP provider's network is its most important asset. Effective SIP providers can offer a high-quality and reliable network they fully control.
Most SIP providers are resellers – Tier 2 or Tier 3 providers – that buy their SIP service from a network owner or another reseller. Tier 1 providers directly own the network they sell.
When a SIP customer files a complaint or opens a support ticket with a Tier 2 or 3 provider, that company must open its own ticket with the company from which it resells services.
Only Tier 1 providers can be truly accountable to their customers. Owning the network enables them to be more transparent and respond to issues more quickly.
Coverage area
You must ensure a provider can service the geographic areas where you operate. For example, a small business with exclusively local customers may not need extensive coverage from its provider. However, an e-commerce business with a large portion of its client base overseas would need a company that can handle frequent international calls.
E911 service
Analog phone system owners don't have to think too much about 911 service; the number is always available when needed. Digital phone systems can be more complicated because there's no tie to a physical location.
A good SIP provider should offer enhanced 911 (E911) – rules that ensure your phone system can automatically provide the caller's location to emergency dispatchers. E911 capabilities mean emergency services will know where to send first responders.
SIP trunk providers
The SIP trunk market has grown steadily in recent years. Here are a few SIP trunking providers to consider:
RingCentral MVP
RingCentral MVP is an excellent, practical, easy-to-use option for most companies, offering a range of features.
The service is designed from the ground up to make collaboration effortless. Features like instant messaging, document sharing and conference calling provide a single, centralized communications system for a business.
Prices start at $19.99 per user per month. However, the most affordable plan doesn't offer audio or video conferencing capabilities. A 30-day free trial is available. Read our comprehensive RingCentral review for more information.
Vonage
Vonage is a unified communications system that offers an array of features for businesses.
One of Vonage's unique offerings is the Microsoft Teams integration. The service integrates with Teams by default, allowing employees to access the phone system directly from the Teams platform.
Vonage's plans begin at $14.99 per user per month. The most affordable plan is not compatible with desktop phones, however. The company offers a 14-day free trial. Read our in-depth review of Vonage for more information.
8x8
8x8 is a unified communications system built with ease of use in mind. Features like mobile and desktop apps, video chatting and conferencing provide a centralized communication system for businesses that want to switch to SIP trunking.
The system is a great fit for small businesses needing an inexpensive service that still offers a great deal of flexibility and customization.
Plans begin at $12 per month per user. 8x8 offers a 30-day free trial of its Express plan. Read our comprehensive 8x8 review for more information.
Unifying communications with SIP trunking
SIP trunking is a powerful option for businesses interested in upgrading to a unified digital communication system. It allows you to leverage legacy PBX technology without relying on analog phone lines. For most businesses, this upgrade will mean cost savings and access to cloud-exclusive communications management features.