Great Reasons for SIP Trunking to Business Phone Systems

There is a relatively new technology that is used to bring voice calls into a business phone system that provides lower monthly costs and a higher level of reliability. It is called SIP trunking, and it is worth looking at how it can benefit your business. The only catch is that your organization has to be using a VoIP phone system in order to take advantage of all the benefits, however, in many cases the monthly cost savings from converting to SIP trunking can pay for all of the costs to upgrade to a VoIP phone system!

Most organizations that have more than fifty phone users have a type of business phone system called a Private Branch eXchange, or PBX. This system allows users to call each other easily, and to share the circuits that are provided by the phone company for outside calls. The circuit that connects the business to the phone company is usually a type of voice T1 called an ISDN PRI, which can have 23 concurrent calls on it, and costs typically $600/month. A T1 can also be used for other purposed, including providing data connections in the form of Internet or a private Wide Area Network called MPLS. Because all business locations require voice service as well as data service, most typically have multiple T1 connections coming into each of their sites.One of the large benefits of SIP trunking is cost savings.

For example, an organization that has ten locations, each with a voice T1 and an internet data T1, can reduce their costs significantly. An Internet T1 is about $600/month also, whereas an MPLS T1 costs less at about $450/month. It is possible to reduce a $12,000/month cost to about $7000/month by putting in place SIP trunking and MPLS private network instead of voice T1’s and internet T1’s. This leaves $5000 per month that can be used to fund the purchase of equipment and installation services for a VoIP system. If the system is financed over a 3 year period, that provides a budget of about $180,000 for a new phone system.

Another advantage of SIP trunking is reliability. The calls are sent over the data network to a voice gateway that can terminate the SIP call. It is an IP connection. If the first location the call is sent to is not available, then a second and even third location can receive the call. That means if a remote office is not reachable due to power outage or natural disaster, the calls can still be sent to someone on the phone system who is reachable. This allows the organization to continue to provide customer service to the caller and not merely deliver a busy signal, which is what the caller would get if the call were directed to a voice T1 terminated by a PBX that was turned off.

SIP trunking can also be used to consolidate unused circuits from the phone company. With traditional voice T1 circuits, If a location requires that more than 23 concurrent calls be completed, a second T1 has to be added, bringing the total to 46 concurrent calls. The increased capacity is only available for that location. It is very different with SIP trunking. In most cases the SIP trunk is priced for aggregate concurrent calls for the entire organization, which means utilization is higher and monthly costs lower.

Just like any other new technology, there are many details that have to be addressed in a SIP trunk deployment. When it is combined with a phone system changeover, there are more details and potential issues. For most organizations, the cost savings and improved reachability and productivity from a new phone system make it a worthwhile changeover. SIP trunking combined with a VoIP phone system is something that should be on every organization’s roadmap.

Here is a brief video explaining the benefits of SIP trunking, and this is a link to an article about VoIP phone system upgrade.