What is SIP Trunking and what does it mean for VoIP?
By Natália Mrázová
| 5. April 2022 |
By Natália Mrázová
| 5 April 2022 |

    What is SIP Trunking and what does it mean for VoIP?

    illustration SIP trunking

    VoIP, call forwarding, call flow designer, IVR, ACW, and more are just some of the terms you might spot when researching virtual phone system providers. Today, we are adding another one to the list.

    SIP trunking is a technology that allows businesses to significantly improve both their internal and external communication strategies. With it, going from an outdated landline Private branch exchange (PBX) to a smart and intelligent cloud-based phone system is possible in seconds.

    Increasingly more businesses are taking advantage of SIP trunking. Transparency Market Research says that 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, as well as 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 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.

    What is SIP Trunking 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 Does SIP Trunking Work?

    SIP trunking provides scalability and cost-cutting opportunities. It is a method of sending voice over the internet among other unified communications services, and it works with an IP-enabled PBX to replace traditional telephone lines.

    What is a Direct Inward Dialing Number?

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

    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.

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    What Are the Benefits of SIP Trunking?

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

    Moreover, SIP trunking is a great option for companies dealing with international calls. We know how expensive they can be, and SIP trunking is here to make your phone bill slightly less traumatizing. 

    Let’s look at the benefits more closely:

    SIP Trunking is a cost-saving solution

    SIP trunking allows its users to save a lot of money. This is because the technology uses an Internet connection or third party’s IP network rather than very pricey analogue phone lines.

    In addition, you will no longer have to pay high prices for long-distance calls because with SIP trunking, they all become local due to traveling through the internet. There are also no hidden or unexpected charges. Subscription plans are usually very clear and based on a per-user rate.

    If you’re a business owner looking for clarity and no surprises in terms of costs, SIP trunking seems like just the perfect solution for you.

    Scalability is easier with SIP trunking

    In unpredictable times when businesses are often rapidly scaling up and down, it’s vital to have solutions that will grow together with you. Traditional phone service is very limited in terms of your business’s growth.

    SIP trunking is here to change 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. Then, as your needs increase, you can easily modify or add more users and bandwidth.

    SIP trunking offers great flexibility and mobility 

    Businesses nowadays love convenience and connectivity. If you agree with this statement, SIP trunking must just be what you need.

    Traditional ways of answering calls include being near a phone at all times. This means sitting next to one all day and answering any calls that come through. 

    With SIP trunking, you no longer have to worry about being tied to a desk because calls can be easily directed to your mobile phone or any other device with an internet connection. This gives you plenty of freedom and independence, as well as allowing for a flexible work ethic.

    Let’s not forget how important this actually is when it comes to remote work or having a remote, international team spread all over the world.

    SIP Trunking increases team productivity

    Moving on, SIP trunking can 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 their actual jobs, and enjoy a seamless connection.

    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 that you are currently using: voice calls, text messages, video conferencing, collaboration applications, and more. Do you have them all in one place? The answer is probably “no”.

    By utilizing SIP trunking, you can transmit all your communication channels to a network of data. This way, you’ll be taking a crucial step closer to having a unified communication platform (often also known as Unified Communications as a Service or UCaaS).

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

    Frequently asked questions

    Here’s a helpful list of the most frequently asked questions regarding SIP trunking used in VoIP phone systems.

    Are there any downsides of SIP trunking? 

    The only downside is the initial setup cost. If you don’t make too many calls, it may not be necessary for you. However, in case your business depends on a high volume of calls, the SIP trunking guarantees a return of your initial investment.

    Is SIP the same as VoIP?

    Despite sometimes being used together, SIP and VoIP are not one and the same. VoIP stands for Voice over Internet Protocol, which in general refers to any call made over the Internet. Most VoIP deployments involve the use of an application such as CloudTalk, along with IP-enabled PBX hardware or a hosted service.

    SIP falls under the category of all protocol technologies used in VoIP. To put it simply, SIP is one of the specific technologies that enable VoIP to work.

    How do SIP calls sound?

    With the right configuration of the SIP trunking technology, SIP calls are no different than those made from traditional phone lines. Thus, there’s no need to worry about the quality of calls with your employees or customers.

    What is a SIP channel?

    Every SIP trunk contains a number of different SIP channels. The easiest way to explain a SIP channel is to compare it to a telephone line – but a digital version. If you usually make 20 calls at a time, you’ll need 20 different SIP channels.

    How much can I save by implementing SIP trunking?

    Using SIP Trunking instead of a legacy system can reduce telephony costs by up to 50%, according to Gartner. Of course, this number may vary based on your company size, usage, and other factors. 

    SIP Trunking in your VoIP phone system

    SIP trunking is used by many reliable call center providers, such as CloudTalk. It’s just one of the many advanced technologies we use to make online calls reliable, safe and efficient. 

    Whether you need call center software, an outbound calling solution or a full-blown virtual call center for a remote team, we have everything you need in one place – and you can try it out completely free!