SIP Trunking 101

By Brian Boguhn
Updated: February 01, 2011

You’ve been tasked with saving money for your company. One of the areas you’re looking to cut costs but not service is in the company’s phone bill. Several of your colleagues have mentioned to you that SIP Trunking is the way to go. But what is SIP Trunking, and what will it do for your company?


First, a basic understanding of the traditional phone system is necessary. The private phone system currently installed in your business is called a PBX. The PBX is directly connected to the public telephone system (known as the PSTN). When you initiate a call, your call travels through the phone lines used by the PSTN.

Using a SIP Trunking service modifies this process. A SIP Trunking service provider allows a company to get PSTN connectivity via the Internet. Instead of the traditional physical wires running from a provider to a business, a SIP trunk now connects to the PSTN through the Internet. Now when a call is made, a SIP softswitch will route the call to its destination. However, the call will not go through the telephone lines that make up the PSTN. Instead, it will travel through the Internet.

SIP Trunking combines connections for data and voice into a single line. A company’s data network now carries voice traffic. Features that typically come with this service include local and long distance service, 911 services, directory listing, and caller ID. All of these features will work in conjunction with the company’s existing PBX.

SIP Features and Benefits

OK, you say. I get how it works, but so what? What will it do for me in terms of cutting costs without sacrificing features? These are fair questions. Some of the benefits companies enjoy by going with a SIP Trunking service are:

  • A reduction in monthly expenses, as only one connection is needed for voice and data.
  • Outsourcing PSTN connectivity to a third party, reducing long distance charges.
  • The use of a hosted VoIP service while still maintaining the investment in their PBX.
  • Establishing local numbers in cities across the country instead of using an 800 number.
  • Doing away with PRI (primary rate interface) and BRI (basic rate interface) connections, again reducing costs.
  • Eliminating the need to purchase equipment that does the work of the SIP Trunking service.

Bottom Line

SIP Trunking allows a company to use its existing investment in the phone system that it has and interface that system with the Internet. The result is that the company enjoys VoIP services and enjoys a state of the art communications process while immediately seeing a drop in expenses from the costs associated with the traditional phone provider and service. With a modest outlay, a company can see a beneficial return on investment in six months or less. If you’re looking to cut costs in your company’s phone bill while making the phone system itself more efficient, a SIP trunk is a prudent way to go. 

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