What is SIP Trunking?

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Time to Read | 11 mins

What is SIP Trunking and How Does It Work?

As a business owner, you are always looking for ways in which to cut costs. While some of these ways, such as cutting back on resource wastage, are easy to achieve, there are others that you may have trouble understanding. Session Initiation Protocol (SIP) trunking is one of the more complex methods of saving a fortune on establishing communication channels.

If you find yourself wondering, ‘what is SIP trunking?’, and what you should ask the service providers, read along to know the breakdown of SIP and how it works.

What is Trunking?

Before we proceed to explain what is SIP trunking and how it makes trunking more cost-effective, here is an introduction to trunking in telecommunications for those who are unaware of the concept.

An organisation will make and receive multiple outbound calls in the course of business. Now, each individual cannot be assigned an individual telephone line. Therefore, a trunk is created with various switches and nodes. These nodes and switches allow individuals to use a single set of telephone lines for making concurrent calls.

Traditionally, trunks connected the Private Branch Exchanges to telephone service providers. In the UK, many organisations connect their PBX with telecommunications services to make long-distance calls. There could be one or more trunks and exchanges involved in one call.

What is SIP Trunking?

In simple words, SIP trunking is when Internet Service Providers (ISPs) allow you to make calls over the internet rather than via telephone lines. This digital transformation of analogue signals is possible because of Voice over Internet Protocol (VoIP) technology.

VoIP is a result of technological advancements in the telecommunications industry that allow individuals to make video calls over the internet rather than using analogue signals. The audio signals are fragmented into smaller data packets, which are then delivered to the end IP address, i.e. the receiver’s telephone. After looking carefully, you will realise that the process of transfer of audio via VoIP is similar to that of the transfer of data over emails.

VoIP technology caters to individual users and groups, connecting them over the internet. You require a well-established business phone system for using the SIP trunking services. Even when you have a telecommunications system in your business and contact a regular telephone service provider, they will ask you, “What is SIP trunking?”. This is because there are SIP providers who exclusively deal in the provision of this service.

The Internet Telephony Service Providers (ITSPs) allow your office communication system to communicate via voice, video, and other streaming media applications. These services do not only allow two-way communication but allow any number of IP addresses to connect within one call.

SIP Trunking Explanation infographic

How to Connect SIP Trunking in Your Phone Systems

Now that you know what is SIP trunking, here is how you can integrate it into your office’s phone system:

  • When your office has a pre-established VoIP network through the company’s Local Area Network (LAN), the SIP service providers will integrate the system into the pre-existing shared lines. Now your employees can use the company’s internet connection to communicate over voice and video calls, and share data.
  • If your office is using the traditional, wired cable lines for communicating, the provider will first connect the telephone lines with a common VoIP gateway. Now you can use the SIP trunking and enjoy the unbelievable cost benefits that come along.

Being the virtual version of an analogue phone line, SIP trunking allows multiple IP addresses to create, modify, or terminate one IP network. Also, because there is a little requirement of wiring, SIP allows you to make local, national, and international calls through the internet.

Furthermore, the Phone Exchange Systems (PBXs) of multiple endpoints can be connected to send and receive calls via the internet. The SIP trunk connection will let you make concurrent outbound calls without any problems, even if the PBX is the same.

How Does SIP Trunking Work?

Now that you have an idea about what SIP trunking is, here is a brief introduction to its working mechanism:

The Session Initiation Protocol is the very basis of internet-based telephony. It is a Unified Communications (UC) solution that allows the transfer of data from one IP address to another in voice and video formats.

SIP trunking eliminates the need for maintaining a connection with the telephone service provider through wires, switchboards, and circuit boxes. It replaces the traditional, wired telephone lines with the more sophisticated internet connection used by the company.

Also, the costs associated with installing and maintaining hardware are reduced by an immense amount. Plus, the internet charges are to be paid for one connection rather than having to contend with multiple telephone bills.

Direct Inward Dialling Number (DIDN)

When you purchase a DIDN with a SIP network, it tends to cost far less when compared to the one purchased from a phone company. This is because the telephone companies associate the cost of IT and maintenance services, as well as that of the hardware with the DIDN.

Therefore, when you obtain a DIDN through SIP, it tends to be more affordable and hassle-free.

Benefits of SIP Trunking

Knowing what is SIP trunking is easy; however, there is little use knowing the theoretical aspects of the service when you don’t know its real-life benefits. SIP essentially converts voice and video calling into an altogether new application in your office telephone network, allowing staff to make intra-organisational, inter-organisational, and international calls. Therefore, if your company is involved in making a lot of international and national calls, either with the clients or sister companies, you need to contact a SIP provider right away.

Although the explanation makes it sound like complex technology, SIP trunking is simple and just requires a strong internet connection to work well. Here is how this lightweight set of protocols will help your business grow and expand.

  1.   Cost Savings

If your business is losing most of its cash inflow by paying high monthly telephone bills, you can use SIP. Placing calls over a SIP trunk will allow you to make as many local, national, and international calls as you want without any additional charges, other than the internet. In this way, your telephone bills will no longer be subject to the mystifying charges that you are obliged to pay.

With only a handful of internet lines, a company can operate its entire organisational calling, making the charges more predictable.

Apart from saving the office from shocking telephone bills, installing a SIP trunk also helps the organisation save a fortune on installing and maintaining hardware. Also, with a SIP trunk in place, your business can overcome the difficulties of having to connect to an exchange before reaching a client-based abroad. It enables you to overcome the technological constraints of telephone lines.

Studies suggest that companies and businesses can save up to 50% on their monthly bills with SIP trunking. Of course, if the operations of the enterprise are spread over a larger scale, this figure can decrease further.

  1.   Low Capital Investment and Immediate Returns

More often than not, investing in new technology is a gamble for businesses. It takes them years, if not decades, to get a decent return on investment. However, with a SIP trunk, the investment is not great if you are already using the internet-based telephony in your organisation.

With SIP trunking, businesses use their internet connection, connect it to the telephone network with the help of SIP providers, and get rolling!

From the very first telephone bills, you will be able to see the amount you have saved and will continue to save by sticking to SIP trunking.

  1.   Scale and Go Global

Since you own an enterprise in the time of globalisation, you cannot remain in the same geographical location to conduct business and grow. If not for core functions, you will have to send teams over to study various markets and make sales. For this, you need a SIP trunk.

Due to the virtual nature of SIP trunking, it doesn’t limit you to any physical or geographical boundaries. It allows you to share voice, video, and other applications over the World Wide Web. Ultimately, it connects you to the entire world within a fraction of a second.

Therefore, SIP trunking will allow you more flexibility when you are considering scaling the organisation and tapping the global market potential.

  1.   Unified Communications

By using SIP trunking services, you become a part of the larger network known as Unified Communications as a Service (UCaaS). This is possible when you select an ISP with an eye for what ISP trunking is and what its subsidiary services are that you need. Such an ISP service provider will allow you to use connectivity options such as fibre-optic cables, video conferencing, and IP address connectivity.

Several connectivity options brought into the organisation through ISP trunking will help you integrate collaboration apps, mobility, instant messaging, and even cloud-based computing into your systems.

  1.   Maintain Connections Without Internet

When you know what SIP trunking is, you are not restricted to video and voice calling; you can devise an app for your employees to stay in constant touch with the organisation too. These apps are user-friendly VoIP-based applications that allow your employees to report back to the office immediately at no cost.

Also, though having an internet connection available at remote locations is difficult, the SIP trunking will allow them to connect with the organisation when there is no internet. For this, an organisation can use a single, dedicated phone line and go mobile.

  1.   Establish a Consolidated Network

If your organisation is paying the same provider for the phone line connection as well as the internet, you are losing money unnecessarily. With a SIP trunk connection, you will have to pay your service provider only for the internet connection, not the telephone lines. Plus, this will consolidate the channel you are using for conversing as well as sharing data files.

Although it will increase the pressure on the bandwidth, you can save a fortune on the charges you pay for hardware and wiring maintenance. Plus, the optical fibre cables will enable you to enjoy the lightning fast internet speed and protect the information from cyber-evils including eavesdropping, hacking, and snooping.

  1.   Tap the Markets with Low Infrastructure

Often, even if you have detected the demand and opportunity for your service or product in a remote location, you are not able to expand operations due to the lack of infrastructure. While the roads and buildings can be built, you rely on the telecommunications sector to install telephone lines in the locality.

However, if you know what SIP trunking is, and the fact that it requires a strong internet connection and no complex telephone lines, you can expand operations to remote locations as well.

All you need to do is provide a VoIP activated mobile phone to the employees who will be working in those remote locations. Now, with the use of a 5-digit extension, or a dedicated phone number, your remote team can stay connected with an integrated SIP network.

  1.   No Additional Hardware Investment

When you come into contact with a SIP provider, once you know what SIP trunking is, the physical or wired connectivity is the least of their concerns. While other methods of telephony such as Primary Rate Interface (PRI) require you to establish a well-defined network of telephone wires, SIP trunking only needs a VoIP activated telephone connection.

With no need for installing expensive hardware for communication, SIP will save you a vast amount of money. However, if you are looking for some wired services such as faxing, you can ask your SIP provider for these additional services.

  1.   Reliability and Security

The need for advanced telecommunications technology arose because traditional telephony requires physical infrastructure and a complex network of wires, which then have to pass through various exchanges in the case of long distance calling. Any conversation over this channel is subject to weather conditions, operators in the telephone exchanges, and the wellbeing of the wiring poles. If any of these elements fail, communication becomes a far-fetched luxury unless repaired.

Therefore, once you are aware of what SIP trunking is, you should consider it for your business. It does not rely upon complex hardware, allows communication even when the internet connectivity fails, and enables you to add or terminate connections when needed.

Moreover, the more consolidated SIP network can be used to share confidential information without the security threats that often tend to linger.

  1.   Easy Management

Your team is seldom able to conduct successful video conferences because there are little or no options for using collaboration apps for adjusting call routing, changing extensions, and on-demand modification in connected lines. However, with a SIP trunk integration, your staff will no longer have to wait to speak to a customer service representative, as it will allow them to make concurrent calls on demand.

PRI vs SIP Trunking

If you are planning to overhaul or establish a phone system for your business, you will come across PRI and SIP trunking in the market. While PRI is the traditional, trusted method of communication, there have been many accolades received by SIP trunking as well, making it difficult for you to make a decision.

So, here is an evaluation of the pros and cons of both the services to enable you to make a more balanced decision.

  1.   PRI or Traditional Phone Lines


  • Bring to use the older handsets that are not VoIP compatible
  • Greater quality of service due to wired connectivity and analogue signals


  • There is little scope for flexibility and mobility of business because you have to wait for phone lines to establish an off-site management system
  • Requires the enterprise to spend on the internet connection as well as a telephone connection, making PRI more expensive
  • Requires IT staff to install and maintain hardware


  1. SIP Trunking or Internet-based Calling


  • More cost-effective as it requires the business to pay for pre-established internet charges and eliminates the need for in-house IT staff to maintain hardware
  • Scalable service, allowing businesses to make modifications in plans as per their needs
  • No limitations when it comes to mobility and off-site management


  • The internet connection, though reliable, can lose its efficiency due to lower bandwidth or inaccurate configuration
  • Requires the company to invest in new equipment, such as modern phones, that is compatible with VoIP technology

Does Your Business Need SIP Trunking?

Now that you know what SIP trunking is, how it works, and what its benefits are, here is why your business needs it.

No matter how flexible, reliable, and cost-effective telecommunications become when you have SIP trunking in place, no two businesses are sailing in the same boat. There are various aspects that will have to consider, such as:

Heavy Bandwidth Allocation

If you are willing to move your telephone to a digital channel, you will have to acquire an internet connection that will allow the telephones to operate well, along with other regular operations of the business. Do a small investment-to-return analysis of the costs that you will have to bear and then decide whether your organisation will reap enough benefits.

The Requirement of International and Long Distance Calling

If yours is an organisation that depends solely on clients and operations abroad, you will benefit more substantially from internet-based calling than a company that relies on wired lines.

What to Consider When Selecting a SIP Trunk Provider

Once you have decided that your business needs SIP trunking, you can begin your search for the best in the business. Now, the question is how to decide which SIP service provider will help your business expand its horizons. Here are some aspects that you need to consider before reaching a decision:

  1.   Audio Quality and Coverage

The very purpose of SIP trunking will fall flat if you are not able to hold a clear conversation with your client. Therefore, you need a provider that works with Tier-1 voice carriers and has a Point of Presence (PoP) in each region that concerns you.

  1.   Reliability

The reliability of a SIP trunking service provider is established through their redundancy infrastructure. You should opt for the one with ties with multiple local and international carriers so that all your calls get through, with or without internet connectivity.

  1.   Cost

One of the primary reasons for a business switching to SIP trunking is cost-effectiveness. Therefore, do not fall for plans that offer unnecessary benefits that your business doesn’t need. This will only delay your return on investment. Also, the one you choose should aim to add value to your existing VoIP system rather than force you to install another.

Even if you have a traditional phone line network, your provider should be able to use the existing network and create a SIP trunking system by connecting the VoIP with PBX.

  1.   Security

At times, you have no option but to share confidential information over voice calls. Therefore, you need a SIP trunking service, which is known for secure calls with no interception. IP authentication, encryption using Transport Layer Security (TLS), and Secure Real-time Transport Protocol are some services they should offer.

  1.   Scalability and Flexibility

Another benefit of SIP trunking is that it is quite scalable in terms of business requirements. So, select a provider that offers pre-defined and clear directions as to how the pricing will differ according to the scale of services.

Also, the contract of service should be flexible, allowing you to make changes as and when possible. If the provider is trying to bind you into undesirable terms, you should move on to the next one.

The Bottom Line

To conclude, SIP trunking services are soon going to lead the game with the incredible terms and ease of service they will bring to your organisation’s communication system. You should tap into the resources as soon as possible so that you do not miss out on the incredible return on investment it has in store for you. 

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