How SIP Trunking Saves Your Company Money

Understanding all the various components of network systems, connections, proxies, and other services that make up a Unified Communications (UC) system for your business is no small task. You’re aware of VoIP systems, VPNs, how to make the most of Ethernet hubs, hosted network, the whole nine yards. But now, you’re looking into Session Initiation Protocol (SIP) and SIP Trunking, as a final connector to bring all the components together. Why? Well, because there is no stopping you on your quest for knowledge and network understanding. That’s why.

Introducing SIP

SIP is the technology used for creating a voice communication session on a data network. Using their protocols, SIP is responsible for the signaling and session management of a call, the connection, support, and termination. It is not only limited to telephone connections; it is additionally a way to combine voice, data and internet over a simple IP connection and eliminate the need to buy separate circuits.

In traditional telephony usages, there are two distinct, different phases of a voice call. The first part is the call setup, the part which gets the two telephones talking. After that connection is established, the phones begin the data transfer phase. This is a separate process which requires a different set of protocols to direct the movement of voice packets between the two phones. In relation to VoIP networks, SIP falls into the setup phase and operates at the application layer.

Specific features of SIP include:

  • User location and registration – SIP detects the location of telephones, their address, name mapping and then establishes a connection between the two points.
  • Availability- SIP determines if the end users of the connection will answer the call. If a call cannot be established because the target user is unavailable, it is SIP that makes the distinction why the user was unable to connect, either because they were already engaged or if they just did not connect within a certain number of rings. This is how a person is either directed to voice message or can get the busy signal
  • Capabilities –SIP is used to determine if and how media, voice, and text data can be coded and transmitted across their connection. Data is transferred only using the media capabilities that apply to both endpoints to ensure data can be read on all sides
  • Management- SIP is used to transfer calls, end calls, and add on additional endpoints to a connection, in the case of a three-way conference call.

A SIP trunk then takes the place of the need of physical wires that connect your phone or device to a Public Switched Telephone Network (PSTN) and instead acts as a virtual phone line, between your network system and the provider. This enables your T1, Cable Modem, DSL, Ethernet, or whichever type of connection your company has, which accounts for the transfer of data, voice, and the internet, onto one line.


Cost savings is the most immediate benefit of SIP Trunking. If your company is paying for multiple phone lines, IT maintenance fees, and long distance charges, these can all be reduced by combining your services with by SIP Trunking. This installation rids the need for a physical connection to a phone company, including the wiring, circuit boxes, and hardware. SIP Trunking takes the place of multiple phone lines and combines them into a single point of entry at favorable rates.

Companies are then charged for their service either by the number of lines used, or for minutes used. This allows companies to eradicate unused portions of traditional plans that they were previously paying for. Also, SIP Trunking can support Direct Inward Dialing and caller ID functions.

What to consider

After deciding to implement SIP trunks, a quick overview of your company, either done internally or with a chosen provider, can give you a good idea of how many SIP trunks your business will need. This will let you better gauge the cost, and the savings that will be realized.

Depending on the size of your company, how many calls are made concurrently during the peak hours of business, you can determine how many channels are needed.

Generally, companies will need one SIP trunk per each 2-3 users. Keep in mind that price plans from providers often offer you rates per SIP Trunk, or per minute used. Discuss which rate plan is the better option for your company, according to your usage.

The second consideration to account for is your internet connection. Since SIP allows for the transmission of data packets over your IP network, it only makes sense that your network connection can support the level of communication your business requires. Make sure that you have enough bandwidth to support your communications at the quality level you desire. If for any reason you do not have enough, it should be an easy fix to purchase more from your network provider.

Who to contact

To get started, it is always advisable to speak with a vendor company for more information. XO Communications is an industry leader in Unified Commutations for bossiness across the nation. With connections hubs all over the country, they very well should be able to assist in determining how to best structure UC to your business advantage.

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