SIP trunking: The savings are there but the transition is complex

The merits of SIP trunking have been talked about for years and now it looks like businesses are aggressively adopting the technology, lured by striking cost savings and the promise of new functionality that their old phone networks just couldn't support.

A recent report by Infonetics Research found that of the respondents to a survey of North American businesses, 58% say they will use at least some SIP trunks in 2015 while 55% say they will use will use at least some T-1s. That's a dramatic shift from today, when the balance is 38% using some SIP trunking and 71% using some T-1s.

[ SURVEY: Shrinking idle capacity: Corporate SIP trunks could equal T-1 links by 2015

PRIMER: SIP trunking

HELP: Top SIP trunking gotchas ]

The best reason for adopting the technology: savings. Expert say telecommunications savings of up to 50% can be had depending on the individual network. Other benefits include better visibility into call patterns, centralized management, dealing with less hardware and engaging fewer service providers, particularly for branch offices.

SIP trunking involves connecting all corporate voice traffic to service providers' networks over a single IP connection rather than over multiple TDM lines. Those traditional T-1s and PRIs provide voice circuits in bundles of 23, which almost invariably means businesses wind up paying for more lines than they actually need most of the time.

SIP enables buying only as many call instances that are needed, with the flexibility to add more on the fly over the same SIP trunk during heavy call periods. SIP trunking can also reduce intracompany long-distance fees by riding voice calls over the corporate data network, resulting in savings that are very real.

Finish Line, a national sports shoe and apparel retailer with about 700 stores, racked up $2 million in savings over three years, says Derrick Mitchell, enterprise voice supervisor for the chain. The cost of long-distance calls between stores dropped to zero by running them over the data network. The company negotiated down the cost of inbound 800-number calls to the Finish Line contact center to half what it was before, he says. More savings came from pulling expensive POTS lines and Centrex service from each store.

In a business with larger branch offices the savings could be even more, says Barb Grothe, CEO of Telecom Resources consultancy. If every branch had its own PBX, centralizing call routing would eliminate all the branch PBXs and their associated costs, she says.

Customers can expect other cost savings to come from reducing hardware needed to terminate copper circuits at corporate sites, therefore reducing maintenance, says Grothe. Instead, call paths -- the SIP equivalent of phone circuits -- run over a single connection that lands on a single port.

SIP trunking can also reduce the headaches of dealing with many individual local carriers to set up phone service in businesses that have far-flung branch offices, she says. Calls can be routed centrally out a single trunk at headquarters, so just the SIP-trunk service provider is involved.

In the case of Finish Line, a single 100Mbps SIP trunk at corporate headquarters in Indianapolis replaces seven PRI lines, Mitchell says. Inbound calls destined for branch offices all come in over that line and are routed to the corporate MPLS circuit connecting headquarters to the destination branch. The centralized nature of the call flow provides visibility into call patterns that just weren't available with PRIs, Mitchell says.

While the benefits are clear, businesses entering into SIP trunking should recognize that capital expenditures are necessary but can be countered with ongoing savings in operational expenses, Mitchell says.

And implementing SIP trunking is not simple. It requires preparation and planning and thinking out a lot of details, Grothe says. She recommends spending six months to a year of researching, designing and negotiating before trying to switch over.

Some tips:

  • Align cutovers with the end of current trunk contracts to avoid costly penalties.
  • Know exactly what services are required to avoid attempts by providers to sell more than what is needed.
  • Make sure the current PBX supports SIP. If not, upgrade.
  • Carefully inventory phone numbers. This is essential for a smooth cutover.
  • Provide for reliable 911 services.
  • Provide a redundant trunk that has a separate entry path into the building.
  • Make sure the existing data infrastructure has enough capacity to handle voice traffic at high quality of service.
  • Become familiar with session border controllers, devices that negotiate calls between networks and that provide security.

All providers are not equal, so customers have to shop carefully, Grothe says. A new Gartner report, "Critical Capabilities for U.S. Wireline Telecom Services," scores seven providers (AT&T, CenturyLink, Level 3, Sprint, TW Telecom, Verizon, Windstream and XO Communications) on seven products, including SIP trunking. On a scale of 1 to 5, with 5 being the best, their SIP trunking scores ranged from 2.5 (TW Telecom, Windstream) to 4 (AT&T, Verizon).

Those are overall ratings, but service providers offer a range of different features, and customers need to decide which ones they need. For example, Sprint has a feature called Event Trunking, which allows simultaneous call capacity to jump to a higher specified level during a certain time period and then drop back down, says Tammy Kapec, a Sprint product marketing manager for SIP trunking. It offers a mobility option in which calls can be routed to workers' cellphones if the trunk goes down.

Some providers supply configuration guides on how to set up specific call management platforms to work with their SIP trunks. For example, XO has certified interoperability of its SIP trunks with equipment from more than 30 vendors, says Steve Carter, XO director of product management.

If possible, businesses should lab test services from multiple providers before contracting with one, Grothe says. Providers will balk for businesses smaller than 4,000 endpoints.

Even if comparison testing isn't available, businesses should test out SIP trunks in environments that exactly simulate real network conditions and traffic, says Mitchell.

He says it's essential to carefully plan the actual rollout of SIP trunking, and to establish a reasonable schedule. Initially Finish Line planned to roll out 20 stores per day, but cut it back to 10 because the transition was just too complex. Each site was getting an MPLS upgrade to T-1, new switches and routers and new phones, and doing all that properly without disrupting regular business required time.

Tim Greene covers Microsoft and unified communications for Network World and writes the Mostly Microsoft blog. Reach him at and follow him on Twitter @Tim_Greene.

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Tags RIMunified communicationsNetworkingSIP TrunkingInfonetics ResearchT-1telecommunications savingvoice services SIP

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