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The Ultimate Guide to SIP Trunking

Michael Graw
SIP Trunking
SIP stands for Session Initiated Protocol. It is an alternative to traditional phone systems and uses the internet to facilitate communications. SIP systems can transmit everything from simple phone calls to multi-office conference calls.

With SIP services, businesses can make outgoing calls from their intranet, whether that’s local or long distance. Staff can send emails, text messages and multimedia and videos externally. Companies can use their existing system to browse the internet and complete searches, and have access to both emergency services and directory assistance.

Without SIP Trunking, a company intranet can only function within the company. Historically, most businesses chose to use PTSN hardware to supplement their PBX, but increasingly, SIP is the popular and smart choice for all sized companies.

What is SIP Trunking?

SIP trunking is the process of transmitting voice communications using a SIP system. With SIP trunking, a phone call is broken down into digital packets and transferred over the internet to a final destination. This destination can be another SIP phone, a VoIP (voice over IP) phone, or a traditional analog phone. It can also be anywhere in the world.

SIP trunking is fundamentally distinct from traditional phone systems, also known as Public Switched Telephone Network (PSTN) systems. A PSTN is an analog phone system that uses copper wires to physically connect two phones involved in a call. Since SIP phone systems operate over the internet, they do not require a physical connection between phones.

How Does SIP Trunking Work?

The process of SIP trunking requires a SIP trunk and a Private Branch Exchange (PBX). The SIP trunk acts as the interface between your office phones and the PBX. It handles the process of converting voice communications into digital packets.

The PBX is the interface between your business’s phone system and the internet. It’s essentially a server. A PBX can live on-premises at your business or it can be hosted in the cloud by your phone service provider.

Importantly, a single SIP trunk can have an unlimited number of SIP channels, which are the digital equivalent of individual phone lines. So, your business only needs one SIP trunk and one PBX no matter how many simultaneous calls your employees will make. 

What are the Benefits of SIP Trunking?

SIP trunking has become a popular option for business phone systems because it offers a number of advantages over traditional phone systems.

Cost Savings

One of the key benefits to SIP trunking is that you only pay for the phone services you actually use. Without SIP, your business needs to have enough phone lines available to handle communications at peak times. That means you may be paying for phone lines that you don’t actually use except during a few very busy days each year.

With SIP trunking, you can scale the number of SIP channels you have available up or down at any time. You only pay for the number of active channels your business requests and the phone minutes your business uses. So, you’re never paying extra for unnecessary capacity. 

Worldwide Communication

Another important benefit to SIP is that it enables your business to communicate with anyone, anywhere in the world. Since SIP operates over the internet, there’s no difference in cost between local and long-distance calls.

That’s a big advantage for businesses that have offices in multiple countries or that need to work with suppliers and customers around the world. The next time your business needs to make a call abroad, there’s no question about how much it will cost.


A SIP trunk isn’t limited to connecting physical phones in your office. You can also add mobile devices to your SIP trunk, making it easier for your employees to work remotely without increasing your business’s phone bill. This is particularly important for remote employees, as SIP trunking enables them to stay connected in the same way as if they were in the office.

Unified Communication

SIP trunking can also save your business money—and potential headaches—by unifying all of your communications on a single network. Whether your employees are making one-to-one voice calls, holding audio conferences, or hosting video meetings, all of your communications take place over the same internet network. 

That means you no longer have to pay for separate phone and internet networks. If you find that call traffic is growing beyond what your network can handle, all you have to do is call your internet service provider to increase your bandwidth.

What is the Difference Between SIP Services and VoIP?

SIP trunking and VoIP are often discussed in the same breath. In fact, SIP is a type of VoIP.

VoIP is a generic term used to describe a group of technologies that allow voice calls to be transmitted over the internet. SIP is one specific type of VoIP protocol that is widely used because it enables voice, video, and text communications.

You can have a VoIP phone system without SIP. However, it will only be able to handle voice calls and won’t be able to connect your calls to any phone number that still relies on copper wires to make and receive calls. VoIP systems that use SIP are much more flexible.

While the best VoIP providers allow you to sendd voice messages, SIP can send any multimedia, including video, allowing conference calls and video chats throughout your business for free.

Here are the main differences broken down by pros and cons:

VoIP Pros 

  • Quick and easy setup
  • Simple to manage
  • Free or minimal setup cost
  • Free or cheap usage costs
  • Requires limited bandwidth

VoIP Cons

  • Can't be used for texting in some cases
  • Must be connected to computer
  • Handles limited traffic
  • Doesn't integrate with legacy phones

SIP Pros

  • Handles large traffic amounts
  • Sends multimedia messages, voice messages
  • Works across all device types
  • Computer doesn’t need to be on to trigger a call
  • Technology integrates with legacy phones

SIP Cons

  • Difficult to set up
  • Initial installation can be costly
  • Requires ongoing IT support
  • Requires large bandwidth

What are the Benefits of Using a SIP Phone Service?

1. Scalability

One of the main benefits to SIP services is the ability to get exactly what you pay for. Without SIP, your business needs to have enough channels available for their peak times, even when the need is actually very low. Think about a company who has the majority of their phone calls during the holiday season. With an analog line, they have to make sure they have enough options at all times to cover the influx of calls when they come. With SIP, you have on-demand scalability. Not only do you only pay for the exact number of channels you are using, but you can seamlessly scale up or down as and when the need arises. You only pay for the minutes, and the lines that you use.

2. Flexibility

SIP providers can help your company remove location-based restrictions to your communication. Suddenly your New York office and your Tokyo office are in free and simple communication whenever they choose. Both voice and data can be sent and received without having an impact on your monetary bottom line. Your geographic reach can be expanded as much as you need to perfect your global presence and inspire true collaboration between your staff.

As well as this, your SIP server can include any mobile devices you want to share calls or data with. This increases opportunities for your staff to work remotely, or take flexible working choices and still be ‘on call’ in case of emergency. Many candidates cite mobility as one of their top desires when they are looking to move companies, and SIP phone service hands it to them on a silver platter.

3. Cost Savings

The savings your business will experience can vary depending on which SIP provider you choose, and how heavy your inbound and outbound phone use is. Most businesses report savings of around 40%, although this can be as high as 60% or as low as 10%. The bottom line is, it’s cheaper than using traditional telephony.

For entrepreneurs who want to hold an important conference or conglomerates intent on holding professional development sessions for their staff members located across the globe, SIP trunking brings video, voice, and messaging data together at once. The implications are absolutely staggering, considering the savings that are made possible when it is no longer necessary to fly across the country for that next business meeting.

Other savings which you will experience are a quick ROI, as installation tends to be very cost-conscious while you begin making money back immediately on calls. You are also no longer paying for internet and phone separately.

SIP trunking also eliminates the need for "800" numbers, providing companies with another way to trim down their budget. Local numbers can be established at various points throughout the country and calls are delivered to a central call center via the Internet.

There is no capital investment to consider, as there is little to no hardware involved in a move to SIP trunking.

There is also increased productivity savings to think about. Your staff can collaborate easier, be more productive from home, and won’t spend time waiting around for answers from overseas colleagues. This saves thousands of dollars per year in lost productivity from staff. The options SIP phones give for teleworkers and flexible working conditions also raise morale, which has been proven to help your staff feel more valued and get better results.

4. Unified Communication

SIP trunks allow users to send any kind of data through the same channel. This means that collaboration and communication can be so much easier between staff, even if they are separated geographically or by time zones. Voicemail can be delivered to email, text messages can come through by voice, video chats can arrive on mobile, and you can be conference-called by your entire team, wherever in the world you are. Collaboration has never been simpler.

5. Reliability

VoIP has got a shaky reputation when it comes to quality of calls, but this has very little basis in the truth. This might be down to some residential VoIP services resulting in a poor line due to shared networking and low bandwidth. Studies have shown that over 90% of business SIP users are happy with their audio quality. SIP is only gaining in popularity, and there is set to be almost 70% of US businesses using SIP trunking for their telephone system by the beginning of 2024.

There is much better disaster recovery when SIP trunking is involved. Automatic rerouting of calls through another data center is a common option, speak to your SIP provider to see what they offer. When it comes to an emergency on your end, such as a power outage or a system failure, SIP can be setup to create rules for any of these eventualities. Calls will be rerouted to mobile or to another office, and your clients and customers will never even know there was a problem.

What Should I Consider in Terms of SIP Phone Security?

Although SIP servers are a safe technology, there are always ways to go the extra mile to keep yourself and your business protected. As well as choosing safe passwords, including longer than standard PIN numbers for any voicemail or admin locks, speak to your SIP providers about what security extras they offer before you sign on the dotted line. Here are some of the most common.

  • Network security firewalls
  • PBX security extras
  • IP filtering
  • Restricted access options
  • Outgoing call restrictions outside of opening hours
  • Logging and alerts to let you view suspicious activity
  • Premium rate barring

SIP Trunking Service: Pricing Factors

One of the most common questions business owners ask is, how much does SIP trunking cost? The answer depends on a variety of different factors.

Setup Costs

Many SIP phone service providers charge one-time setup fees from $50-$250. This is the provider’s cost to connect your business to a cloud-based PBX and get your system up and running.

In addition, your business may have to pay for new hardware. You will need SIP-enabled phones, which are different from traditional analog phones. Some SIP providers offer hardware for free or rent. Others let you bring your own phone hardware at no cost if you’re switching from another VoIP phone service.


If you plan to have an on-premises PBX, you’ll need to pay for the PBX itself and for the cost of configuring it for use with a SIP system. This is a major upfront investment that can cost several thousand dollars. However, when hosting your own PBX, there are no ongoing costs. So, most businesses expect to recoup their investment in a PBX over time in the form of reduced phone costs.

Calling Costs

SIP phone providers may charge either per the minute or per each SIP channel your business has. With a per-minute plan, you’ll pay a flat rate for every minute of time your employees spend on the phone. There may be different rates for text messages, audio conferences, and video calls made using your SIP system.

With a per-channel plan, you typically pay a flat monthly rate for each SIP channel (phone line) your business needs. You get unlimited minutes instead of paying for time spent on the phone. The monthly cost of a per-channel plan is more predictable and may be cheaper than per-minute plans for businesses that spend a lot of time on the phone.


Depending on how many SIP channels you need and the number of simultaneous phone and video calls your business makes, you may need to upgrade your internet service. Costs for additional bandwidth vary widely by internet service provider.

Number Porting

Most SIP providers charge a fee to port your business’s current phone number from your old phone service provider to the SIP platform. This fee is typically $15-$25 per ported number.

Porting your phone number can be well worth the cost, especially if you’ve spent a lot of money advertising that phone number.

Choosing a SIP Trunk Provider

There are many factors that go into choosing the best VoIP provider for your business.


The total cost of SIP phone service can vary widely between providers. Be sure to shop around before settling on a provider. In addition, make sure that the quotes you receive include the cost of hardware, number porting, and installation.


While SIP phone services can be highly reliable, you’ll need a high-quality phone service provider to get the most out of your system. This is especially important if you are using a cloud-hosted PBX. Many phone providers offer free trials so you can test out their call quality before committing to a plan.

Customer Service

In the event that something goes wrong with your business’s phone service, you want to have the issue addressed as quickly as possible. The best SIP trunk providers offer customer support seven days a week and are highly responsive to customer requests.


Every business’s communication needs are different, and top SIP trunk providers recognize that. Look for SIP providers that allow you to bring your own internet service provider or phone hardware. In addition, keep an eye out for services that will work proactively to determine your business’s phone needs and craft a custom plan for your business.


Many business owners believe that SIP trunking is the future of business calling, and it’s easy to see why. SIP trunking makes it possible to merge voice, video, and text while dramatically reducing costs compared to traditional phone systems. Check out our reviews of the best VoIP phone providers to find the right SIP trunking service for your business today.

Michael Graw
Michael Graw is a freelance writer specializing in finance, business, and tech who writes for Top10.com. His work has appeared in numerous well-known online and print publications, including Techradar, BestMoney, Business2Community, Day Trade Reviews, Pacific Standard, Fortune, Business Insider, and more.