SIP Trunking 101: How it Works, Benefits & How to Choose the Right Provider

Are you looking for a flexible and cost-effective way to optimize your business communication? With SIP trunking, you can go from an outdated landline Private branch exchange (PBX) to a smart and intelligent cloud-based phone system in seconds.

Increasingly more businesses are taking advantage of SIP trunking. According to Transparency Market Research, the global market for this technology could grow at a 13.8% annual rate until 2030 and reach a market value of $35.5 billion by that time, even surpassing $43 billion by 2031.

If you’re curious to know what SIP trunking is, what it’s used for, and what benefits it offers, read on.

What is SIP Trunking?

Let’s start by dividing the term into smaller parts. 

SIP is an acronym for Session Initiation Protocol. SIP is the technology that can create real-time connections between two phones. In short, it’s the technology that makes VoIP (Voice over IP) possible.

• Trunking refers to the process of all your phone lines coming together to connect in a functional way.
• SIP trunking, therefore, refers to a type of Voice over Internet Protocol (VoIP) technology and streaming media service. It’s based on the Session Initiation Protocol (hence the “SIP”) through which Internet telephony service providers (also known as ITSPs) serve their customers.

SIP trunking provides cloud-based phone services for users of an existing PBX or server. CloudTalk’s SIP trunking technology can deliver outbound and inbound calling, plus other cord-cutting features via the cloud.

Watch this video for a visual explanation: 

What SIP Trunking is Used For

Probably the most common use for SIP trunking is providing cloud-based phone services for users of an existing PBX or server. The technology can deliver outbound and inbound calling, plus other cord-cutting features via the cloud.

In short, SIP trunking can be used for call management and setup. Thanks to the fact that it’s reliable and flexible, many businesses actively use it to make their workflows smoother.

With this technology, you can really focus on your core business instead of the often complicated and time-consuming technicalities. 

How Sip Trunking Works

As we mentioned before, SIP trunking is a type of VoIP solution.

We don’t want to bore you with nerdy technical details, so here is an overview of the mechanics behind SIP trunking:

With the help of a packet switch network, SIP trunks break down your voice calls into digital packets and send them across the internet to the desired destination. 

This feature works with an IP-enabled PBX to replace traditional telephone lines.

How Much SIP Trunking Providers Cost

SIP trunking can be a cost-effective solution for businesses looking to save money on their phone bills. However, the cost of SIP trunking providers can vary depending on a number of factors, including the number of lines, the features included, and the provider’s pricing model.

SIP trunking providers typically charge per channel (line) or per minute. The cost per channel can range from $10 to $50 per user per month, while the per-minute fee can range from $0.01 to a dollar or more. The total expense will depend on the number of lines you need, the volume of calls you make, and the number of agents who will be making and taking calls.

It’s important to choose a SIP trunking provider that offers transparent pricing and billing, so you can easily understand your costs and avoid any surprises. What you see on the CloudTalk Pricing page is the total price you can expect – no hidden charges and nasty surprises. 

The Benefits of SIP Trunking

While the cost-saving potential is very attractive, it’s not the only advantage this technology offers. Businesses looking to switch to SIP trunking should also keep in mind the scalability and mobility possibilities, among the other advantages.

For example, SIP trunking is a great option for companies dealing with international calls. It wasn’t that long ago when a short international phone call would push our expenses through the roof. SIP trunking is here to make your phone bill much less traumatizing – and you don’t even have to change your own phone numbers. The best providers have coverage in 160+ countries!

Let’s look at some of our favorite benefits more closely:

1. SIP Trunking is a cost-saving solution

SIP trunking allows its users to save a lot of money. The technology uses an Internet connection or a third party’s IP network rather than extremely pricey analog copper wires.

You no longer have to pay high prices for long-distance calls: as they travel through the internet thanks to SIP trunking, they’re technically the same as local calls. There are also no hidden or unexpected charges with this technology. Subscription plans are usually clear and based on a per-user rate.

As SIP trunking relies solely on the internet, it’s commonly paired with well-equipped, cloud-based call center software. You can now make and take your business calls (with plenty of useful added features) without the need to install (and pay for) expensive hardware and the cost of their installation and maintenance.

2. Scalability is easier with SIP trunking

In unpredictable times when businesses are often rapidly scaling up and down, it’s vital to have solutions grow together with you. But traditional phone service is extremely limited in terms of scalability.

SIP trunking changes that. Thanks to the fact that this solution takes advantage of the internet, the possibilities to grow are pretty much endless.

SIP works wonders by consolidating your voice data and service into a single network, so all your remote employees and offices can be combined into a single cloud-based platform. As your needs increase, you can easily modify or add more users and bandwidth.

3. SIP trunking offers great flexibility and mobility 

Which business doesn’t love convenience and connectivity?

Traditionally, you agents needed to sit next to the phone all day to be able to answer when the phone rang. Not only did it make remote work near impossible, but you could lose deals even if your in-office agents spent too much time making their coffee! 

With SIP trunking, you no longer have to worry about being tied to a desk. You can easily direct calls to your mobile phone – or technically any other device with a stable internet connection. This gives you plenty of freedom and independence, promoting flexible and remote work. 

Let your team’s location-independent dreams come true! 

4. SIP Trunking increases team productivity

By this point, it probably won’t surprise you that SIP trunking can also make your employees more productive.

Poor communication tools and solutions that are challenging to work with can really be time and energy thieves. When people deal with faulty systems, they tend to get annoyed, angry, and/or unmotivated.

With SIP trunking, you can provide effortless and easy business communication between teams and offices. Your employees will no longer have to worry about knowing how to connect with someone if a system is faulty or lacks features.

As a result of this, your team can be more productive, spend more time doing what their jobs require, and enjoy a hassle-free connection.

5. SIP trunking delivers a unified communications system

Finally, SIP trunking also allows your company to have an all-in-one, strong, and unified business communication stream on one platform.

Think about all the different ways of communicating you use in your day-to-day life: voice calls, text messages, video conferencing, collaboration applications, and more. Do you have them all in one place? 

The answer is probably “no”.

But it doesn’t have to be. 

In other words, you can have a single app that does everything without opening a dozen apps for similar uses.

What is a Direct Inward Dialing Number (DID)?

When talking about SIP trunking, we can’t ignore Direct Inward Dialing (DID).

Using a DID service, your telephone service provider connects your company’s PBX to a block of telephone numbers. With this feature, businesses can set up virtual numbers that bypass the main reception line and go directly to an extension or group of extensions in a particular company. 

With a DID number, you can easily manage multiple phone lines and extensions without the need for physical phones. This can help you save money on your phone bills and hardware while keeping your communication streamlined.

How is it connected to SIP trunking? To put it simply, your DID number first identifies your phone. Then, SIP trunks serve as the link between that identified phone and the Internet. Through the SIP trunk, a DID is connected to the Internet. This DID then allows calls to be forwarded to the right phone.

The Difference Between SIP Trunking and PRI

If you aren’t new to business calling, you might be wondering about the difference between SIP Trunking and Primary Rate Interface, or PRI for short. 

Both SIP trunking and PRI are telecommunication technologies used for connecting your phone system to the PSTN (Public Switched Telephone Network.). 

The main difference between the two is that while SIP trunking uses the internet to connect your phone system to the PSTN, PRI uses traditional phone lines.

SIP trunking is therefore a significantly more cost-effective and scalable solution than PRI, as it allows you to easily add or remove channels as your business needs change. However, as PRI doesn’t rely on the Internet for calls, you might avoid some of the common VoIP call quality problems, such as packet loss, latency, or jitter. However, with a stable internet connection, call quality isn’t normally an issue anymore. 

The Difference Between SIP and VoIP

SIP and VoIP are often used interchangeably, but they are actually two different technologies. VoIP, which stands for Voice over Internet Protocol, refers to any technology that allows you to make phone calls over the internet. SIP, or Session Initiation Protocol, is a specific protocol used for initiating and managing VoIP calls. SIP is an important part of VoIP technology.

What is SIP ALG – and Why Should You Get Rid of It? 

In rare cases, when you take your traditional call center to the cloud via SIP trunking, you may experience a decrease in call quality. 

This is one of the reasons companies are wary of saying goodbye to copper wires and hello to VoIP. But in most cases, the drop in call quality is reversible. 

You simply need to disable your SIP ALG (or Session Initiation Protocol Application Layer Gateway to be more precise).

SIP ALG is a feature found in many routers and firewall devices that can interfere with SIP traffic. It can modify SIP packets in unexpected ways, which can cause issues with call quality and connectivity.

For example, SIP ALG may change the source port of SIP packets, which can cause problems with NAT traversal. It may also modify SIP headers, which can cause issues with authentication and call routing.

To avoid these issues, it’s recommended that you disable SIP ALG on your router or firewall device. You can usually do this through the device’s web interface or command line interface.

To learn more about SIP ALG and how to disable it, check out this video:

How to Choose the Best SIP Trunking Provider?

When choosing a SIP trunking provider, there are several factors to consider, including:

• Cost: Look for a provider that offers competitive pricing and transparent billing. Keep in mind that on top of the monthly membership fee, you’ll likely have to pay per user, line, and calling minutes as well.
• Reliability: Find a provider with a strong track record of uptime and reliability. We highly recommend checking our user reviews on trusted sites such as G2 or Capterra. 
• Features: There are hundreds of features out there that can enhance your cloud-based business calling experience. Which features do you need? Make a list of your day-to-day activities and goals. For example, if your business relies on incoming requests and you barely make calls, a sales auto-dialer might be redundant, but an IVR menu or skill-based routing is essential.
• Support: Choose a provider with excellent customer support, so you can get help when you need it. The best providers offer 24/7 support, and larger companies get a dedicated account manager for a smooth experience who can also give you business advice if needed. 

The 11 Most Reliable SIP Trunking Providers in 2023

After careful analysis and reviews, here are our top pics for the top SIP trunking providers in 2023:

1. CloudTalk

CloudTalk is a cloud-based call center and business phone system built to maximize your customer support efforts across all channels. All you need to do is choose a number for one of the 160+ supported countries, and you can instantly start optimizing your workflows with advanced features, including IVR, click-to-call, power dialers, and more! CloudTalk also supports 35+ other powerful integrations for helpdesk, e-commerce, and CRM systems, including HubSpot and Zendesk.

Key features

• High-quality calls with guaranteed latency and minimal jitter
• Smooth workflow with our Intelligent call-routing tools
• Callback feature that redials the number until connected with the agent
• Redirecting calls during busy hours or when outside the office
• The call masking feature keeps your personal number private

What is CloudTalk missing?

According to some users, CloudTalk Analytics needed a refresh; something that would afford our users deeper insights into the data that drives their business forward. 

We answered the call and recently launched Analytics 2.0, a powerful new data-visualization framework that gives users in-depth reports on the day-to-day operations of their call center. Identify problem areas and apply data-driven solutions faster than you ever thought possible. 

What Type of Business is It Best For?

CloudTalk is the perfect phone system for mid-sized companies looking to grow. Typically, it’s used in sales for outbound calls and in customer service for inbound calls.

2. Twilio

Twilio is a cloud communications platform that enables businesses to communicate with customers via voice, SMS, and messaging apps. It offers a range of tools and APIs for developers to build and customize communication workflows.

Twilio’s benefits

• Scalable and flexible platform.
• Wide range of communication channels.
• Extensive documentation and support.
• Advanced analytics and reporting tools.
• Robust security features.

Key features

• Programmable Voice: Make and receive calls with APIs.
• Programmable SMS: Send and receive SMS messages with APIs.
• Programmable Chat: Embed chat into web and mobile apps.
• Video: Add video capabilities to web and mobile apps.
• Flex: A fully programmable contact center platform.

What is Twilio Missing?

Some users have reported that the platform can be difficult to navigate, especially for non-developers. The pricing can also be confusing, as it charges for each API call, which can add up quickly for high-volume usage.

What Type of Business is It Best For?

Twilio is an ideal solution for businesses that require customizable communication workflows and a range of communication channels. It’s especially useful for developers who want to build their own communication applications.

Pricing

3. Vonage

Vonage is among the best-known virtual phone providers in the world. They’ve been in the business for over 20 years and have established an enviable reputation as a market leader.

Vonage’s benefits

• The Virtual Receptionist automatic attendant feature allows calls to be forwarded to other departments.
• Moreover, businesses can provide callers with alternatives for call routing that let them use either their name or an extension to dial. Before having their calls routed to a department, callers can also use the company directory.
• Even when businesses use cloud services that consume a lot of bandwidth, such collaboration, chat, and video tools, Vonage’s network optimization features ensure call continuity and call quality.

Key features

• Stability and reliability
• Auto-attendant
• CRM integrations
• Voice and video conferencing
• Call forwarding services

What is Vonage missing?

Unfortunately for customers, Vonage has capitalized on its reputation by charging much more for its services than other comparable virtual phone software providers. 

Vonage pricing also includes many hidden fees that make the service far more expensive than expected. 

This can be a real downside for small businesses that need to be more discerning about how and where they expend their resources.

What Type of Business is It Best For?

Vonage is best for companies looking for a well-established provider. 

Pricing

4. Nextiva

Nextiva is a big player in the VoIP market, providing services to more than 15,000 customers. Nextiva is widely regarded as user-friendly — users can start calling within minutes thanks to a simple and intuitive setup process. Furthermore, the system is hosted by Nextiva, which makes maintenance of the software Nextiva’s responsibility.

Nextiva’s benefits

Nextiva offers various advanced features, including conference calling, voicemail transcription, multi-level attendant, and much more. The provider also integrates with solutions like Zendesk, ConnectWise or MS Teams.

Nextiva’s HIPAA-compliant virtual faxing makes it a great solution for healthcare workers. Medical employees can share information without having to worry about data breach. 

Furthermore, 24/7 support means agents are always on hand to assist you. 

Key features

• Unlimited Calling
• Video Conference Recordings
• Mobile & Desktop Apps
• Workflow Optimization
• Omnichannel Communications

What is Nextiva missing?

Although Nextiva is a well-known VoIP solution, there are some issues you should know about when considering this provider:

• Integrations: Nextiva is missing certain integrations, like Slack or Zapier. With Zapier, users are able to connect your VoIP telephony system with thousands of non-native systems. 
• Prices: Many consider Nextiva’s prices high, especially for small businesses.

What Type of Business is It Best For?

Businesses that need a robust, secure and reliable enterprise phone system that works across every device and comes with advanced features like video conferencing, mobile app, call recording, and more.

Pricing

5. RingCentral

When you think about VoIP telephony solutions, Ringcentral is probably among the first ones that comes to your mind. It’s no wonder, the company has been on the market for over 20 years and has built quite a reputation for itself. 

RingCentral’s benefits

RingCentral has a great variety of features, and offers HD quality voice and video. The provider is a good fit for enterprises, since it offers an omnichannel experience and lead qualification tools, as well as management, collaboration and performance features – all in a single software.

Key features

• SIP Trunking
• IVR
• Call Recording
• Call Routing
• Contact Management

What is RingCentral missing?

Despite all the positives, RingCentral does lack quite a few essential tools that modern businesses require. 

features like native sentiment analytics, Speech-to-Text transcription, smart dialers or Skill-based routing are only included in Contact Centre Solution. The same goes for some agent management features, like monitoring.

The Call recording tool and Toll-free numbers are only available as add-ons, for an additional cost. 

Furthermore, RingCentral’s implementation can take as much as 90 days and involves an implementation fee. 

RingCentral UI is also not always the friendliest to work with. 

What Type of Business is It Best For?

RingCentral MVP is a flexible cloud-based solution which is ideal for businesses of all sizes.

Pricing

6. Bandwidth

Bandwidth VoxBone is a cloud communications platform that offers voice, messaging, and 911 access to businesses of all sizes. Its platform is designed to be scalable and customizable to fit individual business needs.

Bandwidth VoxBone’s benefits

• Easy to integrate with existing business systems.
• Scalable platform that can grow with your business.
• Offers 911 access for additional safety and compliance.
• Provides enterprise-level messaging capabilities.

Key features

• Voice API: Allows businesses to make and receive calls and manage phone numbers.
• Messaging API: Provides messaging capabilities to send and receive SMS and MMS.
• Global 911: Provides 911 access for businesses operating in multiple locations.
• Number Management: Provides full control over phone number management.
• Customizable SIP trunking: Allows for flexibility and customization.

What is Bandwidth VoxBone Missing?

Bandwidth VoxBone doesn’t offer video conferencing and advanced call center features, which may not be ideal for larger businesses with complex communication needs.

What Type of Business is it Best For?

Bandwidth VoxBone is a good fit for businesses of all sizes that want a scalable and customizable communication platform. It’s especially useful for companies that need 911 access and messaging capabilities.

Pricing

7. 8×8

8×8 is an evergreen telephony solution with a strong focus on integrations and analytics. The provider is well-suited for enterprises, but lower-tier subscriptions also work for smaller organizations. There are a number of benefits 8×8 can offer its subscribers.

8×8′ benefits

First of all, the provider has done a great job building an Analytics system that can effectively track large-scale business processes. 8×8’s reporting system centralizes all data in a single place, so managers can make their teams more organized and speed up their workflow. You’ll also get real-time reports.

Then, we have the solution’s comprehensive integrations with software like Salesforce, Slack, Microsoft Teams, and many more. Furthermore, 8×8 users get unlimited calling to 40+ countries. 8×8 telephony software comes with smart dialer, click-to-call, and call recording.

Key features

• Call Center Management
• IVR
• Contact Management
• Analytics & Reporting
• Call Monitoring

What is 8×8 missing?

If you own a business that works globally, there are a few things about 8×8 you might want to consider:

A crucial restriction, mainly for big international companies, is that there are regional constraints on unlimited calling. Users with the basic Express plan can only use unlimited calling in the US and Canada.  

 Office is required: You need an office in the location where you want to call in order to get a number from there. 

Geographical restrictions for SMS: You can only use the SMS feature within the US, and 8×8 does not cover costs for mobile numbers in Brazil.  

Integrations: 8×8 doesn’t partner with telco companies, which means that users won’t have native integration with certain solutions — for example, Whatsapp. Non-native integrations must be set up by the tech team.

features: 8×8 is missing some features like call tagging for more efficient calling processes, call masking for protecting your personal information and API for connecting with the tools you love. Automation tools like IVR, skill-based routing or automated callback come only with high-tier plans. You have to pay extra in order to get call recording. 

What Type of Business is It Best For?

Flexible for Any Business

Pricing

8. AT&T

AT&T Inc. is an American multinational telecommunications and the world’s largest telecommunications company by revenue and the third largest provider of mobile telephone services in the U.S. It provides a variety of VoIP services for different use cases – one of the most popular ones being its UCaaS (unified communication as a service) platform AT&T Office@Hand.

AT&T’s benefits

Office@Hand offers many benefits, including advanced calling features like call recording, call forwarding, and auto-attendants, integration with popular business software like Salesforce and Microsoft Teams, a reliable network with strong coverage across the US and beyond, and 24/7 customer support.

Key features

• Call recording: Record and save calls for training or compliance purposes.
• Call forwarding: Forward calls to any phone number or voicemail.
• Auto-attendant: Provide customers with an automated greeting and menu system.
• Virtual receptionist: Route calls to the right department or employee.
• Voicemail transcription: Transcribe voicemails to text and send them via email.

What is AT&T missing?

AT&T’s pricing can be more expensive than some of its competitors, and some customers have reported difficulty navigating the software’s user interface. Additionally, some users have reported occasional call quality issues.

What Type of Business is It Best For?

Cloud-based platform that facilitates omnichannel communication for any organization.  

Pricing

9. Verizon

Verizon is a cloud-based solution that offers many of the insights needed to optimize business operations and, by extension, drive growth. It offers mobile phone, home phone, and internet services for a variety of devices.

Verizon’s benefits

Verizon uses analytics to determine users’ performance and assist with improving efficiency. Thanks to real-time reports and alerts, it helps businesses to better manage their services. 

Key features

• Activity Tracking
• Billing & Invoicing
• Contact Database
• Contract/License Management

What is Verizon missing?

While Verizon offers a variety of helpful features, it’s missing some capabilities that other cloud-based solutions provide. For instance, it doesn’t offer inventory management, which can be important for businesses that need to track their stock levels. Additionally, it doesn’t provide scheduling or dispatch tools, which can be useful for businesses with mobile workforces. Finally, Verizon lacks any marketing or CRM features that can help businesses nurture leads and maintain customer relationships.

Overall, Verizon is a great solution for managing mobile devices and services, but businesses looking for more advanced features may need to consider other cloud-based solutions.

What Type of Business is It Best For?

Verizon is an ideal solution for businesses of all sizes looking to optimize their operations, reduce costs, and improve customer service. It is also handy when businesses need to manage multiple locations, coordinate deliveries, and schedule appointments.

Pricing

10. Zadarma

Zadarma is a cloud-based phone system that offers a range of communication tools such as VoIP, virtual phone numbers, and SIP trunking. It enables businesses to make and receive calls from anywhere in the world with an internet connection.

Zadarma’s benefits

• Affordable pricing plans.
• Global phone number coverage.
• Easy setup and use.
• No setup or cancellation fees.
• 24/7 technical support.

Key features

• Virtual phone numbers: Get virtual numbers from over 100 countries.
• VoIP: Make and receive calls via the internet.
• SIP trunking: Connect your PBX to the internet.
• SMS: Send and receive text messages.
• Webphone: Make calls directly from your browser.

What is Zadarma Missing?

Zadarma doesn’t offer video conferencing or team collaboration tools, which may be a disadvantage for businesses that require these features. Some users have also reported poor call quality, especially for international calls.

What Type of Business is It Best For?

Zadarma is an ideal solution for small and medium-sized businesses that require an affordable and easy-to-use phone system with global phone number coverage.

Pricing

11. net2phone

Net2phone is a modern VoIP phone service built to enhance business’s communication experience. Basic VoIP features come standard, including call forwarding, call transferring, and call recording.  

Net2phone’s benefits

Net2phone’s customers cite a number of benefits the service provided their businesses with, including the ease of implementation, straightforward user interface, good call quality, and remote work capabilities. Not to mention several people boasting that they’ve been able to cut down their phone bills significantly since onboarding. 

Key features

• Auto attendant 
• Call recording 
• Voicemail to email transcription 

What is Net2Phone missing?

Net2Phone’s admin portal leaves much to be desired, according to reviewers on the G2 platform. It’s a basic setup and one that can hamper administrative efforts on the part of its user base. 

What Type of Business is It Best For?

Net2Phone is best for businesses looking for an all-in-one VoIP and communications solution. 

Pricing

Conclusion

SIP trunking is a powerful tool that can help you streamline your business communications without changing your existing phone number and save money on your phone bills. By choosing the right SIP trunking provider, you can take advantage of advanced features, reliable uptime, and excellent customer support.

 If you’re ready to see what SIP trunking can do for your business, hop on a free call with us or sign up for a free trial with CloudTalk today!