SIP trunking and DID: Everything you need to know

SIP trunking and DID: Everything you need to know

SIP Trunks and DIDs work together to create an efficient and cost-effective calling solution.

If you look up VoIP systems, you'll probably come across SIP trunking and DIDs. Session Initiation Protocol (SIP) and Direct Inward Dialing (DID) are foundational elements of VoIP systems; they work together to make calls over the internet.

The SIP trunking market continues to experience rapid growth. According to Research and Markets, the global SIP trunking services market was valued at $15.31 billion in 2024 and is projected to reach $22.99 billion by 2028, growing at a compound annual growth rate (CAGR) of 10.7%. This growth is driven by increasing adoption of cloud-based communication solutions and the cost-effectiveness of SIP trunking compared to traditional phone systems.

As businesses move to VoIP systems, it's valuable to understand how their underlying technologies function. It's even more crucial if you plan on transitioning from legacy phone systems to VoIP because acquiring DID numbers and configuring a SIP connection is required to set up your voice communications.

In this guide, we'll explore these technologies and how they work together to scale voice communications and drive business efficiency.

What is SIP trunking?

SIP trunking is a signaling protocol that connects phone lines to the internet. It's an alternative to a Primary Rate Interface (PRI), the communication system that transmits phone calls to the Public Switched Telephone Network (PSTN).

While a PRI uses a physical connection (like copper wires) to transmit calls, a SIP trunk operates virtually by sending data over the internet via an ethernet or fiber connection. This makes it easier to reduce or expand phone lines according to your business needs. For a deeper dive into transitioning from traditional systems, see our guide on PSTN vs VoIP.

According to Gartner research, enterprises can reduce telecom expenses by up to 50% by switching to SIP trunking. This cost reduction, combined with enhanced flexibility and scalability, explains why organizations of all sizes are making the switch.

What is Direct Inward Dialing (DID)?

A DID is a service that enables businesses to receive inbound calls without the use of extensions or operators. DIDs are virtual numbers that companies supply to employees to connect to specific phones. Cost-efficient and easy-to-use, DIDs, when paired with SIP trunking, eliminate the need to build physical phone lines to connect colleagues and customers.

To understand how VoIP numbers function and their relationship to DIDs, explore our comprehensive guide on VoIP numbers.

SIP trunk vs. DID: Key differences

Understanding the distinction between SIP trunks and DIDs is critical for planning your voice infrastructure. While they work together, they serve fundamentally different purposes.

How do SIP and DIDs work together?

In short, a DID number identifies a specific phone and a SIP trunk is the connection between that phone and the internet. When someone calls a DID, the SIP trunk connects the call to the internet, and the DID routes the call to the correct phone.

Since DIDs are virtual, they can be assigned or reassigned to any phone or device. They're also flexible, meaning businesses can create unlimited DID numbers on a single SIP trunk, with few limitations.

The only potential constraint is the bandwidth of your internet connection, and even that isn't a barrier to the volume of DIDs you can have on a SIP trunk. Your bandwidth only limits the number of simultaneous calls you can make.

This is why it's almost always simpler and more cost-efficient to use a single provider for both your DIDs and SIP trunking connection. Otherwise, you may pay higher prices for each DID number—which adds up the more phone numbers you purchase. DIDs coupled with SIP trunking is a cost-efficient option that produces high-quality calls.

For step-by-step guidance on configuring your setup, see our SIP Trunking Quickstart guide in our developer documentation.

Extension numbers vs. DIDs

When you use DIDs, you receive a unique number for each of your phones. Callers can simply dial the number, and the call will be routed to the associated phone.

The alternative is extension numbers. Extension numbers are common with legacy phone systems in which operators are responsible for manually routing calls.

With extension numbers, businesses own a single or a few phone numbers. These phone numbers connect to a central routing hub and each phone has an associated extension number, usually 3 or 4 digits.

When someone calls one of your phone numbers, they're prompted to enter an extension number to connect to an employee or department. If they don't know the extension, they're usually connected to a customer service representative to help route the call.

This system works, but it's not as efficient as dialing a direct number without extensions or customer service intervention. Using DIDs makes the calling experience more enjoyable and reduces the resources you need to build a telephone infrastructure.

DID and SIP trunking: Pros, cons, and use cases

Popular use cases and examples of DIDs

The main benefit of using DID numbers over traditional phone numbers is that it's easier and more affordable to add additional phones and numbers. Expanding traditional phone infrastructure often requires running new physical wires. With DIDs, you can add many numbers on a single internet connection as long as you have the bandwidth to support calls.

Here are some popular use cases for DIDs:

PBX systems: PBX systems are comprised of many phones and require many numbers to operate. Without DIDs, callers dial a central business phone and an extension number so the call is routed to the appropriate line. Operators may also intervene to connect callers with employees. Incorporating DIDs into your PBX system is more straightforward. You can assign unique numbers to each phone so callers can directly reach employees—even if their phone is connected to your PBX system.

Multi-department business phones: Traditionally, businesses use a touch-tone or Interactive Voice Response (IVR) menu to route department phone calls. Incoming callers dial in and a pre-recorded voice presents them with information and prompts that lead them to specific departments. This is a common practice, but it's not always enjoyable for customers, especially when they navigate complicated menu items for simple questions. When you provide a DID to each department, customers connect directly to each of your departments, making it a smooth and positive experience.

Communication apps: Messenger, over-the-top (OTT) communication apps and VoIP soft phones can use DIDs to produce more familiar calling experiences. Even though users connect to your business through an app, it's similar—if not almost identical—to making a standard phone call.

Fax: You can connect fax machines to PBX systems or use them to take orders or send documents to your departments. A DID allows you to assign unique numbers to your fax machines, instead of using a central phone number and a fax extension.

Contact centers: Modern contact centers rely heavily on DIDs for skills-based routing, allowing calls to be directed to agents with specific expertise. Combined with SIP trunking, contact centers can handle high call volumes while maintaining quality. Learn more about contact center solutions and how DIDs power efficient customer experiences.

Expert insight on selecting a SIP and DID provider

"The 'best' provider is not a universal title. It's a designation earned by the service that most precisely aligns with your unique business architecture, operational goals, and future growth trajectory. When evaluating SIP trunk providers, focus on network reliability, cost-effectiveness, international coverage, comprehensive security certifications, scalability, and cross-platform compatibility."

— Enterprise Communications Analysis, TelcoSolutions Industry Report, 2025

This insight reinforces that businesses should evaluate providers based on their specific needs rather than simply choosing the lowest-cost option or the biggest name.

Where to purchase DID SIP numbers

The simple answer is you get DIDs from your SIP Trunking or VoIP provider. The more complex part is figuring out which providers will help you meet your goals. Here are a few questions you should consider when choosing a VoIP DID provider:

Does the DID provider offer a SIP trunk connection? This is usually more affordable, simplifies your phone infrastructure, and reduces how many invoices you manage each month. For detailed guidance on setting up your DIDs with a SIP connection, see our support article on How to Setup a DID to SIP Connection.

Does the provider own and operate their IP (Internet Protocol) network? When a provider owns and operates their IP, they can easily troubleshoot connection problems on their network. A private network is also more secure and bypasses congestion on the public internet, resulting in lower latency and higher quality calls.

What authentication options are available? Look for providers offering multiple authentication methods, including credentials (username/password), IP authentication, and FQDN. This flexibility ensures compatibility with your existing infrastructure. Our SIP Connections API documentation provides technical details on available options.

What's the number porting process? If you're switching providers, ensure the porting process is fast and reliable. Delays can mean downtime and lost business. Review our support guide on configuring a SIP trunk for best practices.

Regulatory considerations

It's worth noting that the Federal Communications Commission (FCC) has strengthened requirements for VoIP providers obtaining direct access to numbering resources. These regulations, designed to combat illegal robocalls and protect consumers, mean that reputable providers must comply with STIR/SHAKEN caller ID authentication, robocall mitigation programs, and other compliance requirements. Working with a compliant provider ensures your business communications remain legitimate and your numbers maintain their reputation.

Telnyx: Your all-in-one DID and SIP trunk provider

Looking for a VoIP DID provider that passes all of these tests? Connect with a Telnyx expert and find out how easy it is to get DIDs through the Telnyx Mission Control Portal (hint: it only takes a few clicks). You can also get started with SIP trunking with our self-service guide.

Telnyx offers:

• A private, global, multi-cloud IP network for carrier-grade call quality
• Numbers available in 140+ countries with instant provisioning
• Multiple SIP authentication methods (credentials, IP, FQDN)
• 24/7 expert support and comprehensive documentation
• Transparent, pay-as-you-go pricing with automatic volume discounts

Contact our team of experts to start setting up your voice communications with carrier-grade quality and global reach.

Additional resources

• VoIP Origination: How Numbers Work — Deep dive into how VoIP numbers function
• SIP Trunking Configuration Guides — Device-specific setup instructions
• International SIP Trunking Industry Trends — Market analysis and future outlook
• GTT: The Future of SIP Trunking — How cloud platforms integrate with SIP

Have SIP DID questions or tips to share? Join our subreddit community. r/Telnyx