What Is SIP Trunking?

What is SIP trunking?

SIP trunking is a technology that allows a business to make local or long-distance calls over the internet without using traditional phone lines. A SIP trunk is the digital version of an analog trunk line that lets users make outgoing calls and receive incoming calls.

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 functions as a corporate telephone network that enables office phones to communicate internally and with external parties. This system manages the routing of incoming and outgoing calls while providing sophisticated capabilities such as call screening and automated call distribution.

Using SIP trunks, virtual analog trunks allow a SIP provider — typically called an “internet telephony service provider” — to take advantage of a business’s existing PBX hardware. This setup essentially creates a cloud-based PBX rather than directly connecting to the PSTN.

SIP trunking works by using Voice over Internet Protocol (VoIP), which digitizes a caller’s voice and transmits the communication over an IP network, usually the internet.

The technology supports a business’s phone systems, bringing the cloud’s scalability, cost benefits and analytics features to its landline. Transitioning from analog connections can improve call quality. Plus, businesses can continue to use their existing PBX hardware 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. Also, investing in VoIP doesn’t necessarily mean investing in SIP.

• VoIP: VoIP technology enables voice calls through a business broadband internet connection. This technology is alternatively referred to as “internet telephony” or “broadband telephony.” Organizations can route calls through cloud infrastructure instead of traditional PSTN connections.
• SIP trunking: SIP trunking utilizes VoIP to enable organizations to manage inbound and outbound calls through the cloud. Cloud-based phone systems are highly efficient for companies..

SIP is a signaling protocol that facilitates VoIP calls. But, VoIP can operate independently of SIP by using alternative signaling protocols like H.323 and MGCP. These protocols also manage how VoIP establishes and disconnects calls over the internet. Although H.323, MGCP and SIP have different operational mechanisms, they share the same goal: enabling VoIP to connect and disconnect phone calls over the internet.

VoIP can function using digital phones (IP phones) and analog phones. It can use a separator box or similar device — 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

• SIP trunking lets you access cloud-exclusive features. Depending on your provider, you may be able to access SIP analytics features, including call-quality metrics, call tracking and call screening. These all provide invaluable information. For example, customers expect near-immediate responses to complaints and questions. They may become frustrated if they contact a business and don’t receive a quick resolution. SIP analytics can provide data on how well your team responds to phone calls — allowing you to better anticipate customer needs and avoid missed or dropped calls.
• It can lower operating costs. Once installed, SIP trunking can significantly reduce business phone system costs. The price of a SIP trunk is typically lower than that of a comparable analog phone line. SIP trunking can provide additional savings by reducing the cost of long-distance and international calls, toll-free numbers, and additional monthly charges.
• SIP trunking is highly scalable. Virtual phone systems are often very easy to expand. If your business needs a multiline phone system or toll-free numbers, you may be able to contact your SIP trunk provider and upgrade immediately without purchasing new hardware. This scalability can be a significant benefit for growing businesses or those with unpredictable phone system needs. Your phone system can scale up or down as necessary. This allows you to provide numbers to new employees instantly or cut phone system costs when existing lines are no longer needed.
• It improves 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 prevent echoes, static and dropped calls. 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

• The installation can be costly. While maintenance is cost-effective, installing SIP trunk-based phone systems can be costly. For example, you may need to upgrade your phone system to have a gateway capable of converting SIP to PRI or completely replace the existing PBX. Additionally, providers often charge a one-time setup fee when implementing a SIP trunking system. Plus, there may be costs associated with obtaining 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. However, there is typically a fee for each number being ported, which can become expensive for businesses with large telephone systems.
• SIP trunking requires an administrative investment. SIP trunking can also require a significant administrative investment. You must ensure the new phone system has been properly configured, legacy phone numbers have been ported and 411 directory information has been updated.
• It has unique maintenance requirements. SIP trunk-based phone systems are not immune to failure or errors. If your SIP trunking phone system isn’t working as expected (or at all), you may have to reach out to the provider. It’s also essential for your internal IT team to learn how to troubleshoot basic issues. For instance, if an IP phone has trouble connecting to the SIP server, it may experience frequent call connectivity issues. Before reaching out to the SIP provider, your IT team should know how to check and adjust the firewall configuration.
• SIP trunking is internet-reliant. 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 during an outage.

How to choose a SIP trunking provider

Your SIP trunking provider selection will significantly impact the value your organization derives from this technology. Research providers before investing in a SIP trunk 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 provider’s network infrastructure represents their primary competitive advantage. Leading SIP providers offer a high-quality and reliable network they fully control.

The majority of SIP providers operate as intermediaries — Tier 2 or Tier 3 resellers — purchasing services from network operators or other distributors. In contrast, Tier 1 providers maintain complete ownership of their network. When customers submit issues or support requests to Tier 2 or 3 providers, these companies must open their own ticket with the company from which it resells services.

Tier 1 providers alone can deliver complete accountability to their clients. Network ownership empowers them to provide greater operational transparency and accelerated issue resolution.

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 significant 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) to 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.

Best SIP trunking providers

The SIP trunking sector has experienced consistent expansion in recent years, with the global market projected to reach $43.7 billion by 2031, according to Transparency Market Research. Consider these leading SIP trunking solutions for your business:

RingEx

RingEx is an excellent, practical, easy-to-use option for most companies with 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.

As our RingEx review explains, this service’s pricing begins at $20 per user monthly with annual commitments (month-to-month plans start at $30). Their 14-day trial period can help you decide if it’s right for you..

Vonage

Vonage is a unified communications system with numerous business features, including a unique Microsoft Teams integration. The service integrates with Teams by default, allowing employees to access the phone system directly from the Teams platform.

As we detail in our Vonage review, monthly plans start at $13.99 per month, per line for its mobile plan when billed annually (month-to-month pricing begins at $19.99).

8×8

8×8 is a unified communications system built for ease of use. Features like mobile and desktop apps, video chatting, and conferencing provide a centralized communication system for businesses that want to switch to SIP trunking.

Our 8×8 review explains why this platform excels for small businesses requiring cost-effective solutions with scalability and personalization options. Note that 8×8 provides customized pricing through their sales team rather than published rates.

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. This upgrade will mean cost savings for most businesses and access to cloud-exclusive communications management features.

Kimberlee Leonard contributed to the reporting and writing in this article.