Cost Saving with SIP Trunking

By Neil Zawacki
Updated: February 08, 2011

SIP Trunking is a signaling protocol that can be used to manage phone and video communication over the internet. It only requires a simple core network to function, and the features are applied through specific endpoints provided by the communicating party or channel.

Here’s how it operates

Your private telephone system (also known as a PBX) connects to a SIP softswitch that checks whether the phone call is intended for a public switched telephone network or a SIP phone system. It then adjusts the signal as needed and routes the call through the internet to its destination.

There are several notable advantages to this. There is no need for PSTN gateways, which can be quite costly for small and mid-sized businesses. You don’t require Basic Rate Interfaces or Primary Rate Interfaces for the system to operate, saving additional money that would have been spent on infrastructure. SIP Trunking also offers dynamic allocation of bandwidth for users, which means your bandwidth can be used for things like accessing email and browsing the internet whenever the virtual circuits are not in use.

Small Business

Small businesses can often save a great deal of money with SIP Trunking since the per line cost of the system tends to be 60% to 70% less than traditional methods. The overall cost of the system is reduced further since you don’t need to spend as much on support and maintenance.

Long distance phone calls also tend to be less expensive. This is due to the SIP traveling over the internet instead of having to go through the phone company to reach the intended recipient. The amount saved varies depending on the phone plan, but it is generally cheaper than basic LEC long distance pricing.

Mid-sized Companies

Mid-sized companies can save additional money when they need to scale the phone system up or down. It’s remarkably easy to add voice channels as new employees are hired or remove then when the individual is no longer with the company. Phone numbers can also be switched to alternate locations if someone moves to a different office or needs to work from home.

Large/Enterprise Companies

Large companies can also save money with SIP Trunking since it provides free communication with the different branches. All of the offices around the world will be able to contact each other as frequently as needed and not have to worry about the cost of doing so adding up.

SIP Trunking can also manage more than one phone call at a time since it’s done through the internet. Companies who make a substantial number of phone calls each day can thus potentially save a great deal of money over time. The only limiting factor is the bandwidth that is available to the office.

Overall, if you’re looking to save money on unified communications, SIP Trunking presents one of the best options available. Your company will not require as much on infrastructure, and costs will be reduced throughout the system.