SIP Trunking Explained: What Is It and How Can It Transform Your Communications?
Articles - 15 min read

SIP Trunking Explained: What Is It and How Can It Transform Your Communications?

SIP trunking is a means of operating phone systems over the internet, instead of using a traditional phone line. Using SIP trunking, businesses and individuals can place and receive calls from multiple different clients or handsets, all of which share the same dedicated internet communications channel—the “trunk”—and all of which use the same protocol—SIP—to connect, maintain and disconnect calls.

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How SIP Trunking Works

SIP stands for Session Initiation Protocol and is a standard which describes how phone systems can establish calls, maintain the connection between phone systems so that voice and data can be transmitted when a call is active, and terminate the connection when the call is over. This involves the phone systems sending signals to each other, which contain instructions to begin a call, play-back ringing sounds, stream audio or data between the systems, and terminate the connection.
Once a call has been established using Session Initiation Protocol, other protocols are used to handle the transfer of audio and data between the two phone systems. This process is known as media streaming and is usually carried out over UDP or TCP.

SIP vs PRI

PRI, or Primary Rate Interface, is an older technology used to connect businesses to the telephony network using a physical telephone line which carries multiple voice and data connections for handsets and clients.
The main difference between SIP and PRI is that SIP is an internet communications protocol, whereas PRI is a voice technology based on physical phone lines. SIP trunks do not require any hardware installations or servicing from telcos, so they can be set up, scaled, and configured much more easily than PRI systems. Because of these efficiencies, SIP trunking is often much cheaper than using PRI for business telephony.

SIP Trunk Providers

SIP trunk providers, also known as Internet Telephony Service Providers (ITSPs), offer digital telecommunications services over the internet. SIP trunking providers enable businesses to connect their existing telephone systems to the Public Switched Telephone Network (PSTN) using SIP trunks, allowing them to place and receive calls over the internet.

SIP Trunking vs VoIP

SIP and Voice over Internet Protocol (VoIP) are both protocols that describe voice and data communications carried out over the internet.
  • VoIP is an umbrella term that encompasses many different protocols for voice communications over the internet, including voice calls.
  • SIP is a protocol that describes how VoIP calls are established, maintained, and disconnected. As such, SIP is a sub-protocol that enables VoIP.

SIP Trunking and PBX

A Public Branch Exchange (PBX) is a business telephone system that switches calls between multiple users on the same connection, usually within the same organization or enterprise. Businesses use a PBX to provide a single phone line for their business, instead of leasing multiple PSTN lines for their multiple users or staff.
The cost savings associated with using a PBX have led them to become increasingly popular among businesses, with strong projections for growth in penetration and revenue through 2021.
An organization’s PBX must have a connection to the PSTN in order to make and receive calls outside the organization. This connection can take the form of a PRI circuit, or, more commonly, a SIP trunk. A PBX can be implemented as an on-premise piece of physical equipment (an on-premise PBX), or a cloud-based hosted PBX or virtual PBX managed by an external provider.

SIP Channels

In SIP trunking terminology, there is often confusion between SIP trunks and SIP channels. Channels are often referred to as SIP lines, as they operate just like a traditional phone line that can handle one incoming or outgoing call at a time. As such, SIP trunking capacity can be increased by adding more channels.
Unlike traditional PSTN-based telephony or PRI implementations, channels can be added without any additional infrastructure or configuration. This means that SIP trunking is much more easily scalable than traditional business telephone systems.
In SIP trunking, channels are usually billed at a fixed rate per month for inbound (origination) traffic, instead of charging the customer per inbound minute-of-usage (MOU). Some SIP trunking providers offer metered connections as an alternative billing structure. Under metered connections, unlimited concurrent calls are allowed but usage is billed at a per-minute rate.

Key Benefits of SIP Trunking over Traditional Telephony

Scalability

Traditional business telephony systems have capacity limits which can hinder businesses seeking to quickly scale telecommunication services. For example, PRI lines most commonly contain 23 voice channels, so if a business wishes to add more capacity beyond this point, they are forced to work with a telco who can service their on-site equipment to add more channels.
SIP trunks have the advantage of easy scalability because they are implemented entirely in software. As such, adding more channels or switching to unlimited metered capacity can be done far more easily. Indeed, some SIP trunk providers offer this scaling in a self-service fashion through a user interface (UI).
Additionally, SIP trunking’s scaling advantages work in both directions – not only is it easy to scale-up capacity to meet demand, but capacity can also be scaled down by removing channels, often in the same self-service manner in which it was added. This allows SIP trunking customers far more flexibility: they can scale up and down capacity as needed instead of having to accurately predict their capacity demand and provision channels accordingly. In addition, SIP trunking customers can enjoy additional cost savings from removing unused capacity instead of paying for unused channels on a PRI line.

Globalization

SIP trunking allows businesses to expand their voice communications across the world far more easily than traditional business telephone systems. SIP trunking providers can establish relationships with local providers in a foreign country and route calls over the internet to that country so that they are charged as local calls. This removes the need for enterprises to have relationships with different local telecom operators in each country in which they wish to do business.
These globalization benefits also allow enterprises to provision local numbers in a wide range of countries and use them to make and receive calls, without having a physical presence in any of these countries. As such, enterprises wishing to serve new markets can advertise local phone numbers which are seen as more trustworthy by a majority of consumers.

Price

Bypassing the physical infrastructure of the traditional telephony network is one of the key benefits that has led to the growing popularity of SIP trunking in business communications. As SIP trunking providers have no large-scale infrastructure to maintain, their operating costs are far smaller than those of established telcos. SIP trunking providers can pass these cost savings along to their customers in the form of much lower usage rates for SIP trunking services compared to traditional telephone calls.
SIP trunking customers can also take advantage of the technology’s internet-centric nature to save on long-distance and international calls, by implementing smart call routing:
  • Instead of sending long-distance calls over the PSTN and subjecting them to long-distance or international surcharges, SIP trunking providers route calls over the internet (or preferably, their own private IP networks) to a termination point geographically close to the call’s destination.
  • It is only at this point that the call is routed back onto the PSTN, meaning it is charged as a local call instead of a long-distance or international call.
This can unlock significant cost savings for businesses who serve multiple states or international locations.
Telnyx Elastic SIP Trunking routes calls away from the PSTN, saving you money on long-distance call charges.

Because calls can be routed intelligently to only incur local charges, SIP trunking providers can more accurately understand their operating costs and, in turn, provide far simpler pricing plans to their customers. Instead of a traditional telecommunications bill which often includes hidden surprise surcharges for long-distance calls, transit fees and other surcharges, SIP trunking plans are often sold in a pay-as-you-go model wherein customers are charged predictable rates, tariffed according to the prefix being dialed, or even flat per-minute rates across all of their calls.

Return on investment

There is virtually no capital outlay involved in switching to a SIP trunking solution, as all SIP trunking communications are carried over internet connections which most businesses will already have in place. As such, businesses can earn almost immediate return on investment by leveraging the cost savings of SIP trunking over traditional business telephony as described above.

Reliability

SIP trunking can be more reliable than traditional telephony, provided the SIP trunking provider operates their own private network with multiple points of failure and automated failover routing. This unlocks benefits in disaster recovery: while natural disasters such as flooding and earthquakes can knock out telephony exchanges across wide areas, SIP trunking providers who operate their own networks can leverage their networks multiple points of presence for redundancy and keep business communications operating.

Business continuity

SIP trunking can maintain business continuity in the face of a wide range of issues. Aside from the disaster recovery benefits mentioned above, businesses with SIP trunks can easily operate using softphones, which are software-based telephone clients that leverage the laptop and microphone present on most laptops in place of a regular desk phone handset. Softphones can unlock cost savings for businesses as they eliminate the need to purchase expensive desk phones, and can be scaled more easily than physical phones.
This flexibility becomes even more powerful in the context of business continuity. Businesses that operate using SIP trunking and softphones can have their employees work from anywhere while seamlessly maintaining communications channels and phone numbers that are familiar to their employees and customers alike. As such, businesses that need to make hasty arrangements for large numbers of their staff to work remotely due to social distancing measures or even natural disasters can do so without worrying about their telephone systems.
SIP trunking customers can even arrange to have calls made to employees’ desk phone numbers or softphones forwarded to their mobile devices instead, allowing them unmatched flexibility to communicate both internally and externally. Pair this capability with the aforementioned globalization benefits of SIP trunking, and the appeal of SIP trunking systems for global enterprises becomes immediately apparent.

Configurability

One of the key benefits of an entirely software-based communications system is unmatched control over every aspect of your communications. Here are some of the configuration capabilities enjoyed by businesses that use SIP trunking:
  • Add or remove call capacity
  • Set up call forwarding between numbers
  • Intelligently route calls to different employees, departments, or even offices
  • Monitor call volumes and traffic in real-time
  • Configure calling extensions across their organizations
  • Enable or disable calling to certain destinations based on location or price
  • Enable or disable recording of call audio
Most SIP trunking providers make their configuration options available through a user interface, and some even provider application programming interfaces (APIs) so that customers can interact with their configuration settings programmatically and automate configuration changes based on their needs.

Consolidation

SIP trunking unlocks the potential for businesses to set up unified communications as a service (UCaaS) systems, combining every communications endpoint in their organization into one interface to allow their employees to communicate seamlessly with each other and with their customers. UCaaS implementations often involve not only voice communications, but also video calling, messaging, conferencing and fax, all in one interface.
The advantages of implementing a UCaaS system range from cost savings gleaned from consolidating services under one SIP trunking vendor, to efficiencies unlocked by having all business communication in one place, to employee satisfaction from using a seamless, intuitive interface to handle all of their calls, messages and meetings.

What Features Should You Look For In A SIP Trunking Provider?

Network

Most SIP trunking providers are built on the public internet, exposing their customers’ communications to the internet’s many weaknesses in terms of security, quality, and latency of voice traffic. Your SIP trunking provider should have its own private IP network, purpose-built for communications traffic, with multiple points of presence across the globe. This has several key benefits compared to the public internet:
  1. The internet was not built for real-time communications. Working with a SIP trunking provider that has a purpose-built IP communications network ensures that packet loss and latency are kept to a minimum, so your calls are crystal-clear.
  2. The public internet is insecure. Malicious actors have much more difficulty targeting communications on a secure, private network, especially when customers can choose to enable end-to-end encryption.
  3. The internet can be unreliable, with no uptime guarantees from any given carrier or cloud provider. Private multi-cloud networks with built-in redundancy can offer much more reliable service, and some providers even guarantee minimum levels of uptime for their customers.

Licensed Carrier Privilege

Scaling your organization’s voice connectivity globally can cause issues in working with local telcos all over the world, in countries with varying regulatory landscapes and policies. If a SIP trunking provider maintains relationships with a wide range of carriers across the globe, their customers can enjoy smoother global scaling as these interoperability and regulatory issues are minimized.
Even more desirable is a SIP trunking provider with licensed carrier status all over the world. This status verifies that a SIP trunking provider complies with all regulatory requirements in the country of issuance, and allows the provider full access to local telephony assets like phone numbers. This can avoid frustrating regulatory back-and-forth between customers, SIP trunking providers, and local carriers and regulatory bodies, making global communications much more accessible.

24/7 Support

The superior configurability of SIP trunking gives customers far more control over their communications, but navigating the complex technological world of SIP trunking can be daunting for organizations who do not have a lot of prior experience. That’s where SIP trunking providers support centers come into play.
Often called network operations centers (NOCs), SIP trunking support centers can assist customers with configuring, upgrading and maintaining their SIP trunking systems. The added configurability of SIP trunking can also give rise to issues due to settings being mis-configured, in which case the NOC can aid with troubleshooting, diagnosing issues and recommending configuration changes to ensure reliable communications.
Look for a SIP trunking provider that offers 24x7 NOC support, with in-house engineers on-call around the world.

Given the obvious importance of NOCs in ensuring SIP trunking customers can communicate reliably, you should look for a SIP trunking provider that offers 24x7 NOC support, with in-house engineers on-call around the world. You should also ensure that this support is available to all customers, as some providers implement minimum spend limits or commitments which only offer 24x7 NOC support to some customers.

Easy Configuration and Monitoring

Good SIP trunking providers give you the freedom to configure your communications just how you like them, including setting up custom call routing, choosing from various high-definition media streaming codecs, scaling up and down capacity, configuring billing plans, and blocking and whitelisting international destinations.
Even better SIP trunking providers will have a customer portal that allows their customers to configure all of these settings and more in one intuitive user interface. This UI may also include advanced monitoring and reporting features, allowing customers to see their traffic statistics in real-time and analyze their usage in detail.
The best SIP trunking providers will provide all of this functionality while also allowing customers to interact with their services programmatically through an API. This enables customers to automate large parts of their communication systems including capacity scaling, reporting and monitoring.

Next-Generation Telephony Tools

Running all of your business communications on software-based systems removes a lot of the limitations of traditional PSTN technology, and allows SIP trunking customers to control their telephony and communications in innovative ways. Many SIP trunking providers offer advanced Call Control APIs for this exact purpose. These APIs allow customers to build a wide range of applications:
  • Smart interactive voice response (IVR) systems that interact with incoming callers, present them with information and media, gather their information and route their calls to the appropriate recipient.
  • Call recording systems that allow you to keep an easily-accessible record of internal conversations, sales calls and meetings.
  • Smart routing systems based on the caller ID of an incoming call (e.g. automatically routing an inbound sales account to their assigned account executive).
  • Custom conference calling solutions, with bespoke recording settings, welcome messages and muting policies.
  • Call tracking to attribute outbound cold-calls to a particular campaign in order to better understand your sales funnel.
As mentioned previously, the best SIP trunking providers will enable these advanced telephony capabilities through intuitive user interfaces or developer-friendly APIs, and provide extensive documentation and support for customers seeking to build intelligent telephony applications on their platforms.

How to Get Started with SIP Trunking

Setting up SIP trunking for your organization can be an understandably daunting task, given the complexity of the technology and the myriad of configuration options available.
With Telnyx, you can get everything set up and start making and receiving calls over your SIP trunk with free testing credit in four easy steps. We’ve made this possible by building extensive tooling around getting started with SIP trunking, including guides to setting up SIP trunking with the most popular PBX and softphone platforms. Here’s all you need to do to get started with SIP trunking:
  1. Create an account with Telnyx.
  2. Download a PBX or softphone client like 3CX, Asterisk, Elastix or Zoiper, or get an IP-enabled desk phone like a Yealink T-series.
  3. Follow one of our Bring Your Own Carrier guides to set up your Telnyx SIP trunk with your PBX, softphone client, or IP phone.
  4. Start making and receiving calls using your PBX, softphone, or IP phone over the Telnyx network with your free testing credit!

SIP Trunking FAQs

How Many SIP Trunks Do I Need?

One SIP trunk from one provider is all your business needs to run all of your communications. Capacity comes into the equation in terms of how many SIP channels this trunk allows. A channel is just like a phone line – it allows for one inbound or outbound call at any given time. A key benefit of SIP trunking is that one trunk can hold a virtually unlimited number of channels (provided your internet connection has sufficient bandwidth to support the data transfer along these channels).

How Many SIP Trunking Channels Do I Need?

To answer this question, you’ll need to estimate how many concurrent calls your business may run. This will vary widely from use-case to use-case, industry to industry and business to business, so it’s always best to base this decision on real data from your own use-case. If this isn’t possible, there are some rules of thumb to help guide your decision:
  • Most businesses will require one channel for every 2-5 users.
  • Businesses with more than 100 employees commonly use the 3:1 rule, where one channel is provisioned for every 3 users.

How Do I Add or Remove SIP Trunking Capacity?

Luckily, SIP trunking technology allows you to easily fine-tune your capacity, so if you need to add or remove channels you can do so quickly. With Telnyx, this can all be done in a self-service manner through our Mission Control Portal. We also show your real-time usage statistics through the portal so that you can tell exactly when you need to add more capacity without ever hitting your limits. If you’re more developer-inclined, you can also update your inbound channels in an automated, programmatic way via API.

Can SIP Trunks Have Unlimited Capacity?

Yes - If you’d prefer not to estimate your usage in terms of concurrent call capacity, you can always choose pay per minute billing for any of your phone numbers instead. This effectively gives the number in question unlimited capacity for inbound concurrent calls. As with your channel settings, this setting can be configured through the Telnyx Mission Control Portal or via API.

How Much Does SIP Trunking Cost?

SIP trunking is usually cheaper than traditional business phone systems that use the PSTN and/or PRIs. This is primarily due to the lack of infrastructure required to operate SIP trunking services, allowing for cost savings that providers can pass on to their customers. In addition, routing calls over the internet to local PSTN carriers means that all calls are effectively local calls, further reducing costs. With Telnyx Elastic SIP Trunking, our pricing starts at $0.007/minute to make and $0.0075/minute to receive calls. You can find an in-depth breakdown of our pricing on our website.

How Do I Configure SIP Trunks?

The easiest way to configure your SIP trunks is through a self-service user interface like the Telnyx Mission Control Portal. For large-scale configuration or automated configuration, you can also interact with some SIP trunking providers via API. The Telnyx API has been built from the ground up with developers in mind, so that you can easily build a wide range of applications and tools for your business communications.
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