SIP Trunking in Business Terms

SIP trunking is gaining in all business segments, yet what are the real business issues from a customer and non-vendor perspective?

By David McIntosh & Thomas B. Cross @techtionary

Key Points

One Bandwidth Pipe Not Two – Voice and Data Together

SIP or Session Initiation Protocol means putting your voice calls over your existing Internet data bandwidth.  The SIP trunking providers push their lower costs because they don’t include the extra bandwidth you will need, thinking you already have too much.  This is really important because you may likely not have enough data bandwidth for all your voice calls.  Since voice is 2-way the key metric is not only download but more importantly reliable upload speed.  Most internet bandwidth access is asymmetrical meaning very high download speed and very slow upload speed.  That is, you may think you have enough download speed for voice and data but not enough reliable upload speed for your voice calls.   Check your speed at or other service/app bandwidth and then again throughout the day to see what bandwidth speed you have in both up/down directions.

Different Desk Telephones and Smartphones

Yes, many desk phones are SIP phones or SIP “ready” but your business likely requires an investment in these new SIP phones.  You can also mix desk phones with smartphone apps.

QoS-Quality of Service – “As is”

Telephone company lines are engineered for high quality and have been for more than 75 years.  The internet has been and likely will always be “as is” because it was really designed for email which as you know if it or other data gets delayed by minutes or more, you will never know.  That is, if your data gets delayed its ok but if voice/video gets delayed by even a 100 milliseconds (sub seconds) it will jitter, jumble, garble, or worse.  This is something humans don’t like.  Adding more bandwidth does not automatically cure voice problems but it can help at  an extra expense.

Security – No Such Thing

Like with the predictions in the growth of automobiles, few if any predicted that you might be hurt in an accident by someone texting.  The internet was never really designed for security and only if you have sophisticated firewalls, intrusion protection, VPN-virtual private network, spyware/malware protection and more you likely will be hacked.  There are many known SIP hack attacks even “call jacking” so yes your SIP calls can be hacked.  Plan on adding some sort of SIP security systems.

Cost – Not Really Any Savings – The “Fine Print”

We presented the other issues first because the SIP trunking providers push hard on the idea of savings over traditional PBX trunks. First, while new telephone systems are SIP “ready”, additional licensing or equipment called media gateways or session border controllers may be needed. Check with your current or proposed telephone system provider.  Second, you may already have PBX-private branch exchange lines/trunks that you can keep using.  For these typical traditional lines, the telephone company charges $25-45 each.  One provider charges $40 each for the first-three SIP trunks and then $25.00 for each additional trunk.   Third, prices for internet SIP trunking vary from $10-30 each, depending on term and multi-line discounts.  Packages exist that include in/outbound LD-long distance minutes and DID-direct inward dialing numbers for $70 or $110 per month, limited by the number of phones and/or SIP trunks available.  Still others charge $270 for PRI-primary rate interface replacement (23 trunks/lines) where a traditional PRI typically costs $300 or more.  Taxes and FCC fees are extra on both services.  Fourth, depending on your business, if you have to buy more bandwidth for voice, it would negate most of your savings compared with telephone company charges.  That is, for 5-lines you would likely be ok, but for 10+ lines/trunks more bandwidth will be needed to be sure.  Bandwidth pricing is also in stair-steps though many offer “elastic” bandwidth. You should budget some additional bandwidth just in case at $25-75+ a month.  In addition, other locations where you only have a few business lines, SIP may not deliver best quality.

Here are a few examples.  5-lines with PBX trunks would be $225 and $110 for SIP.  10-lines on SIP might be $150 while using a PRI would be $300.   20-Lines on SIP might be $270 while using a PRI would be $300. Add in the soft cost of lost calls, redial calls, E911 registration, lost productivity, etc. you can see your TCO-total cost of ownership including staff time may not really yield any savings.  To summarize, if you have less than 10-lines you may not see any real savings.  However, 10+ lines SIP trunking is worth looking at.

Benefits – Are “Priceless”

SIP trunking is not going to save you any money but it can be “priceless” benefit if you have multiple offices, want to connect call centers together, have people working from home or ever worry about disasters where one location is burnt to the ground or mother nature intervenes (e.g. 9/11, hurricanes).  Calls can automatically be redirected to another location or locations.  In other words, do not believe the hype from the SIP or VoIP providers but look at your business now and where it may be in a year or two and review the issues just mentioned.

Bottom-line – The Most Important Line
Cloud, customer-location along with smartphone integration, contact center, multi-offices and more are all on the table.  Before you get lost in “Oz” check and frankly, double-check technical issues, vendor reputation, references, and business outlook before making any decision because most often providers want a 3-year contract and often have early cancellation penalties.

If you have another minute or want to know more here is a:

SIP Trunking and VoIP Technical Explanation

The panelists at most conferences miss the mark in helping customers, channel partners, and others get to only square one for selling SIP Trunking.  Without going into all the issues they could have, and should have addressed, here are three tips:
1 – What is SIP?  Make sure you know what SIP means.  It means Session Initiation Protocol.  Basically, SIP provides signaling, like car traffic lights, in order that SIP devices can call other SIP devices over a broadband internet connection.  If you want to know more about the working of SIP protocol, get involved in technical discussions or getting your product interoperability compliant, go to the SIP Forum, a nonprofit industry interoperability organization at
2 – SIP devices can be desk phones, wireless phones, door access and security systems, softphones (phone software on your PC) and other devices such as soda machines or even baby monitors.  SIP moves the “intelligence” into the device.  That is, SIP devices communicate directly with one another.  This is just like the way your PC communicates directly with a website.  The means the features are in the device, not PBX-private branch exchange.  Practically speaking this means I can use my laptop with softphone software as a telephone and can take it anywhere and plug in to an internet connection and begin making outgoing or receiving incoming calls from other SIP devices without a PBX.  If I need to call outside my SIP network or receive a call, a SIP gateway provider gives me a PSTN (public switched telephone network) number which you can call no matter where I am.  Features such as voice mail, transfer, conference, etc. can be added through software and from the gateway provider. If you have a number of users such as in a group or company, you will likely need a more sophisticated system such as a media gateway or SIP-ready PBX.
3 – Bandwidth planning is paramount.  SIP devices use a CODEC-compression-decompression system (a fancy word for a computer chip), to process calls into international standard formats.  One is G.711 which is high bandwidth, high-performance voice calls of 64 KBPS or business quality.  Low-performance (much like cellular service) and low-bandwidth voice calls of 8 KBPS is G.729.  The most important point is that in planning for SIP implementations allocate 80-100 KBPS per call for G.711 and around 30 KBPS per call for G.729.  That is, while G.711 provides for 64KBPS of voice it needs more bandwidth because of the packetizing (overhead) for an internet protocol network.  Here’s an easy rule of thumb, for G.711 take the total number of simultaneous (concurrent) calls times 100 KBPS and that is the bandwidth the customer needs for peak times in both direction.  The customer benefits when users are not on the telephone, the bandwidth is automatically available for their data needs.  Note: most SIP Trunking providers have their own limitations on the number of calls and the available bandwidth.  In other words, YMMV-your mileage may vary considerably.
If you would like us to come give you a business or technical presentation:
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