SIP trunking and DID: Everything you need to know

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.

According to Yahoo Finance, the SIP trunking market will reach $23.58 billion in 2026. More businesses are switching from traditional communication systems to SIP because of its relatively low cost and higher audio and video quality.

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.

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 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.

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. But there is another, more traditional solution.

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.

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 uses 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.

The use cases for DIDs are endless and using DIDs can be the best solution for routing calls to different phones.

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.
• 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, higher quality calls.

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

Looking for a VoIP DID provider that passes both of these tests with flying colors? 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.

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