SIP Trunking Featured Article

April 03, 2012

Do SIP Trunks Save Money?

By Gary Kim
Contributing Editor

It is a good bit of conventional wisdom that SIP trunks save businesses money when used to support IP telephony traffic. But there now are arguments that this might not be true. That might be troubling news for suppliers selling SIP trunks.

Depending on whose research you look at, the penetration rate of SIP trunking in the US is somewhere between five percent and 30 percent of all trunk lines. Zeus Kerravala estimates penetration is  right around five percent in the United States, with Europe being about half of that and adoption being almost nonexistent in Asia at the moment.

Of course, much depends on the architecture an organization used to support its IP telephony operations. The argument essentially is that that moving voice to a distributed model allows use of wide area network transport that is less costly than SIP trunks.

A savvy mid-sized enterprise can source North American WAN services for less than $10 per megabit per month (the equivalent of about 8 VoIP sessions using G.711 or about 16 VoIP sessions using G.729 with max bandwidth usage at 60 percent of capacity).

Cisco now argues that the architectural model that most people use when designing their SIP Trunking network is not necessarily right for every enterprise.

Much of the savings ascribed to SIP Trunking is tied to an assumption about the enterprise WAN architecture, namely that it will move toward a more centralized model: communications functions will be consolidated in the datacenter, and voice traffic will be backhauled on the company WAN from remote offices to the datacenter, where a single SIP Trunk will carry all of the enterprise's external traffic to the PSTN. In practice, this is generally a mirrored data center, so you end up buying two SIP trunks.

The classic business case for SIP Trunks has been inseparable from the assumption that enterprises will move from a model where PBXs are distributed around the network, each serving a single site or a relatively small cluster of sites, to one where voice is a data center application.

If an enterprise has many “not yet depreciated” phone systems,  then building a centralized “PBX” in the data center is expensive.

The argument that centralization may never be the right architecture of course suits Cisco, which believes video is the new voice, and wants to avoid “hairpinning” all calls to the data center, some would say

The significance of the new arguments is the questioning of whether SIP trunks “always and necessarily” save businesses money. In some cases, it is argued, SIP trunks do not save money. The savings might be most clear for small businesses that do not have multi-site operations, though. 

Edited by Jennifer Russell
Subscribe here for your FREE
SIP TRUNKING enewslettter.

Featured Partner

Featured Whitepapers

SIP Security for the Enterprise
Voice over IP (VoIP) is incorporated into a variety of computer networks, both public and private, and used for everyday transactions and communications among carriers, businesses, government agencies...

Making A Broadband Purchase Decision
Businesses today have many options for broadband connectivity. Clarifying your particular business needs prior to selecting a broadband provider will ensure an optimal match of broadband service to your requirements.

Voice-Optimized Network Delivers Premier Call Experience
Customers equate call quality with business quality. Real-time communication, interpersonal interaction, and the cordial tone of a call center representative can create a positive impression of your business that no email can match.

Featured Case Studies

Business Telecom Expenses Reduced 50%
A small to medium sized company in the midwest was interested in migrating to IP Communications, but in today's economy, they were hesitant to upgrade their communication system due to their perception that the cost would outweigh the benefits.

Multi-State Company Cuts Telecom Costs 50%
A multi-site, multi-state company with extensive monthly long distance fees and toll-free charges did not have adequate broadband for Broadvox SIP Trunking requirements, nor did they have a SIP enabled telephone system.

Discover Leisure Connects Remote Users to its IP-PBX
Discover Leisure is one of the largest resellers of caravans and motor homes in the UK. With 15 branch of?ces all over the country, the company spent a great deal of money every month just on internal phone calls.

Featured eBOOKS

Internet+: The Way Toward Global Unified Communication
Connecting the telephony of the enterprise PBX or Unified Communications (UC) system using SIP trunks instead of conventional telephone lines has been very successful in recent years.

What is SIP Trunking? Edition 2
SIP trunking is becoming more of a focus for service providers. One key issue many service providers face when deploying SIP trunks is NAT, or Network Address Translation, traversal.

What is SIP Trunking? Edition 1
A vast resource for information about all things SIP - including SIP, security, VoIP, SIP trunking and Unified Communications.

Featured Videos

Broadvox VAR Testimonial VAR 1:
Part 1 of the VAR (Value Added Reseller) Partner Program Testimonials for Broadvox...

E-SBCs AS The Demarcation Point:
Ingate's Steve Johnson talks to Erik Linask about the role session border controller plays as the demarcation point at...

Demystifying DPI
How can deep packet inspection protect your SIP traffic as well as your entire network?

Featured Resources

Partner Program Overview:
Over 4,000 VARs, Master Agents, Solution Providers, and Independent IT Professionals trust Broadvox. We offer customized services and solutions to fit seamlessly into any company's business model. And when you partner with Broadvox, every member of our team stands behind you and your customers 100%...

SIP Trunk UC Summit

What's New

Presenting the New Ingate/Intertex Website:
Internet+ is an extended Internet access allowing high quality SIP (Session Initiation Protocol) based real-time person-to-person communication, everywhere and for any application. It applies to both fixed and mobile networks ...

Featured Blogs

Featured Webinars

Secure SIP Trunking:
What You Need to Know

Successfully Deploying Enterprise SIP Trunking:
Tools and Techniques for Overcoming Common Roadblocks

Featured Podcasts

Getting the Most Out of Your SIP Trunks:
Ingate's Steve Johnson and TMC's Erik Linask discuss how best practices forgetting the most out of SIP Trunking services and common pitfalls to avoid.

Featured Datasheets

Ingate SIParator E-SBCs
Adopting SIP is a simple process with the Ingate SIParator, the secure enterprise session border controller (E-SBC). The SIParator makes secure SIP communications - including VoIP,SIP trunking and more - possible while working seamlessly with your existing network firewall.

Ingate Firewalls
Everyone is talking about enterprise usage of VoIP, instant messaging and other types of realtime communications including presence and conferencing.

SIP Trunk Solutions for Service Providers
The award-winning Ingate Firewall and Ingate SIParator deliver a high quality, reliable SIP trunk connection between the customer's IP-PBX and the service provider network, and solve interoperability issues to simplify deployments and support for remote diagnosis of reported issues.