SIP Trunking: What it Means to Your Business

For the past few years, our company has project managed and implemented some of the largest and more complex MPLS networks in the country. This migration to MPLS from Frame and PTP networks, along with an increased comfort level of internet based connectivity, has laid the groundwork for considerable customer interest in SIP. We now get more requests for information about SIP than almost any other product. So what is it? What does it replace? What does it complement? Will it save you money and will it be good for your business? I will try and answer these questions at a high level along with some useful details.


SIP, in itself, refers to the Session Initiation Protocol, which was developed by the IETF (Internet Engineering Task Force). SIP is a text-based protocol similar to HTTP and SMTP, which allows users to initiate interactive communications sessions. In this case, SIP is used to set up and terminate VOIP calls. The goal of this protocol is to be very simple and solve only a few problems while allowing other protocols to still do their thing. That means that SIP works well with HTTP, XML, VXML and even overlapping protocols with large market share such as H.323 and MGCP. SIP, though easy to work with, is not a magic bullet and still requires that the network be designed and implemented with proper QoS (quality of service) in order to achieve good voice quality.

What is SIP Trunk or SIP Trunking? The term “Trunk” has long been popularized by the TDM world as a circuit between telephone switching equipment which normally denoted a physical connection. In the SIP world, people use this term a little more loosely but normally it is meant to denote an interconnection to the PSTN, a SIP-based interconnection between IP PBXs (to replace tie lines), or a SIP port on an enterprise server (to support additional functionality such as voice mail).

Show Me the Money

Many customers have been promised large savings by migrating to SIP, and while this can be the case, it is not always a given. Personally, I am also interested in SIP due to the enhanced features and capabilities it affords, but the promise of cost savings often gets people more excited. The vendors know this, and often lead with this line of reasoning. One of the benefits of SIP is that you can move multiple data types including voice, video and data all down a single IP trunk. This often allows users to consolidate or eliminate traditional TDM connectivity. We have seen costs savings from 10 to well over 50 percent when customers properly implement this technology. Your overall savings will depend greatly on your need for redundancy, call traffic, number of locations, geographical footprint, hardware upgrades and the vendor integration required.

Is it for Everyone?

There are downsides to SIP such as limited vendor interoperability and testing. You will also find some carriers will only support hardware from a small number of manufacturers. Depending on how the solution is engineered, a company can inadvertently create a single point of failure which may not have existed with their previous TDM configuration. Companies with heavy regulatory considerations such as healthcare should also move cautiously to limit risk.

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