The Benefits of SIP Trunking—Looking for Cost-effective IP Telephony?
Combining the Internet and telephony lets companies save money and tap new functionality.
Session Initiated Protocol (SIP) trunking allows telephone calls to travel as digital Internet Protocol (IP) signals from end to end instead of using the conventional analog public phone system. It makes it possible for a business to leverage IP across its network perimeter—from within the enterprise out into the world beyond — while also merging voice, data and video into a single pipe. SIP continues to grow in popularity, as evidenced by Frost & Sullivan’s forecast that the North American VoIP access and SIP trunking services market will expand at a compound annual growth rate of more than 27 percent through 2016. As companies consider ditching their legacy voice connectivity, they’re seeing benefits ranging from cost savings to increased functionality and flexibility in the world of SIP trunking. Here we’ve broken down some of the perks enterprises can enjoy with SIP.
The Cost Savings
Experts say that the savings from SIP depends on a number of factors, from your enterprise’s current network architecture to the sort of prices you were able to negotiate for your legacy telecom services. Average savings are generally said to be around 30 percent, though some users will see their bills drop more than that. One big part of the reason behind those savings is SIP’s ability to escape the old, often inefficient way of buying voice bandwidth.
Legacy phone systems use primary rate interface (PRI) circuits, which are typically available only in 23-channel increments. Some providers offer fractional PRIs, but they are rare. Each channel in a PRI can carry a single voice call, meaning enterprises often purchase enough PRI circuits to support their maximum estimated traffic load. That leaves many of those channels unused (but still paid for) during all but peak times. “There is a big opportunity to aggregate PRI trunks and to centralize,” says Charles Studt, vice president of Product Management at IntelePeer in San Mateo, California.
Centralization is possible for those enterprises with multiple locations, because PRIs are typically able to serve only a single site. Each site then has one or more PRIs that are only fully used during peak times. This typically results in wasted bandwidth and wasted dollars. “When you have many PRIs scattered throughout the organization, and many separate broadband connections, consolidating those results in tremendous cost savings,” says David Byrd, CMO and executive vice president of Sales at Dallas-based Broadvox. By combining services across the enterprise, he says waste can be eliminated, and recurring charges go down. “If I have many different locations, and many different points of presence that I need to concern myself with, SIP trunking brings the cost of that infrastructure down dramatically.”
At Georgia Military College, users’ location-based needs didn’t match up with the fixed number of concurrent voice channels supported by their various PRIs. The environment was a common one, consisting of one primary location and several relatively small remote offices. “Paying for a full PRI didn’t make much sense,” says Drago Totev, the institution’s former associate vice president of Telecommunications and Network and now a unified communications (UC) consultant and Microsoft Lync MVP with IT consulting firm UnifySquare, Inc. The local provider didn’t offer fractional PRIs, but the move to SIP allowed them to pay for what they needed, rather than overpaying for services that often went unused. Once the college’s telephony infrastructure had shifted to SIP trunking, Totev says the cost savings were significant. “We achieved over 70 percent cost reduction,” he says.
Enterprises may be hit with regulatory taxes and fees for their PRI lines that “just simply don’t apply to the SIP trunking side,” says Omar Chohan, CFO and vice president of SAC International Steel, Inc., headquartered in Los Angeles, Calif. After replacing their traditional PRI connections with SIP trunks several years ago, Chohan says the reduction in the company’s telephony bills was striking. “At the time, we had about a 40 percent cost savings,” he recalls. As more vendors enter the SIP trunking market, prices have become increasingly attractive, and Chohan notes that even globally he’s seen more competition, often leading to lower prices for SIP trunks.
Functionality and Flexibility
Because the nature of SAC International Steel’s business means they’re often working in developing regions, Chohan says that SIP trunking has provided better services than might otherwise be available. “We’re going into areas where they do not have a built-up infrastructure, without a strong copper or fiber build-out that would support enterprise-level communication,” he explains. Through SIP trunking, Chohan’s team is still able to leverage top-level features such as direct inward dial (DID) lines. These are phone numbers that route directly to an individual location—a single desk or fax machine, for example—and are typically sold as an advanced service through first-tier providers. Where infrastructure is lacking, features such as DID are frequently unavailable. SIP allows SAC International Steel to leverage IP for voice traffic, and gives them strong connectivity even in areas where more traditional services aren’t available.
When George Military College opened a new building, Totev says it only took about an hour to add the SIP trunks necessary to support the space, where traditional PRI lines likely would have taken at least several days to provide connectivity. “One benefit of SIP trunking is the fact that it utilizes the IT network,” Totev explains. “And we know that IT networks in general don’t have boundaries.” Faculty and students are now able to quickly access their school phone from their laptop and even from home, increasing productivity and reducing the time IT must spend on moves.
As more enterprises deploy UC solutions, they may discover that some of the features of their new platform aren’t available to them because they’re connected to the public switched telephone network (PSTN) through legacy PRI-type services. Instead of enjoying all the productivity and ease of use capabilities offered by today’s UC systems, administrators are often left with a stripped-down feature set. This includes service levels such as 64 kb-per-second VoIP, which Studt calls “lowest common denominator” services. “Things like hi-def audio, on-net calling, video — a lot of those capabilities end essentially at the enterprise boundary when you have to go to a PRI circuit,” he says. By leveraging SIP trunking, those media services can be delivered to just about anyone connected via SIP. “You basically preserve those rich features beyond the enterprise firewall,” Studt explains.
By Julie Knudson