VoIP, or Voice over Internet Protocol, is a technology that enables you to make and receive calls over the internet. A good and well-known example of a VoIP application is Skype, which allows users to make calls to local and international telephone numbers using the internet protocol (IP).

While the technology has been around for almost a decade, the sudden popularity of VoIP has led more companies to use the Session Initiation Protocol (SIP), one of the signaling protocols used to implement VoIP.

In fact, revenue from SIP trunks amounted to $3.3 billion in the first half of 2017 alone. That number is expected to hit the $9 billion mark by the end of 2020.

Here’s everything you need to know about VoIP and SIP trunking and why they’re important for your business.

Why SherWeb’s New SIP Trunk Service Will Give You a Competitive Advantage

How Does VoIP Work?

VoIP uses a broadband internet connection to make and receive free or low-cost calls. Not only does VoIP allow you to talk to others using the same technology, but it also enables you to make calls to people who don’t yet use the technology.

When using VoIP with a traditional analog phone on both ends, an ATA (Analog Telephone Adapter) is used to convert the signal from analog to digital. These digital data packets are then transported over the internet to a digital location close to the desired destination.

There, the information is converted back to analog and travels over traditional physical circuit switches (PSTN), enabling the call to be received on the other end.

However, VoIP-to-VoIP calls, which use IP phones on both ends, are made directly over the internet. This has opened the door to a vast number of features supported by VoIP that can turn your regular phone service into an information storage and processing center. These features include the following, among many others:

  • Conversion of voice messages to email.
  • Generation of caller logs and ID.
  • Call forwarding options.

Why Is VoIP Better than PSTN?

VoIP has been replacing PSTN (Public Switched Telephone Network)—or traditional telephones—because it has filled the gap that traditional protocols left in the market.

For one, traditional telecommunication methods have a limit on the number of phones that can be used in a given environment. These services require that infrastructure be installed separately for each landline connection, which leads to a time-consuming and expensive setup.

Compared to this, VoIP offers easy installation and the flexibility of attaching as many phones to the IP servers as needed.

VoIP is also a great way to integrate your voice calls with the rest of your business’s system information on one digital platform, something that PSTN cannot offer.

What Is SIP Trunking?

In a nutshell, SIP trunking is a signaling protocol that allows you to run your business telephone service over an internet network. Even though SIP and VoIP sound strikingly similar, the key difference lies in their application.

While VoIP is a voice over IP communication protocol, SIP works as an application layer with VoIP to establish, transform, and terminate IP-based calls. It connects your physical Private Branch Exchange (PBX) system to your network virtually through WLAN or T1, as opposed to copper cables used traditionally.

A prime benefit of going virtual is that it allows CRM systems to be more easily integrated with the calling mechanism. This helps businesses generate consolidated data sets automatically, which contain customer contact information, transaction history, relationship with the company, and other valuable information. Sales teams can then use these rich data sources for better lead generation and ROI.

SIP Trunking Applications

Along with the ability to facilitate voice calls, SIP trunking also provides communication services, including video calls, media streaming, web conferencing, and screen sharing.

Why Choose SIP for VoIP Integration?

While H.323 is also a protocol used to implement VoIP, SIP is the clear winner and the preferred choice of any business looking to take its telecommunication digital.

This is because H.323 was designed to work with ISDN-based channels, making this protocol difficult to construct and establish. By comparison, SIP was designed specifically for the internet and is a text-based protocol based on a model that parallels HTTP. This makes it easy to use and debug, while ensuring compatible with complex PBX systems.

Advantages of SIP Trunking

SIP trunking offers businesses a number of benefits, making it a popular option. These include:

Compatibility with Physical PBX Systems

While SIP eliminates the need for physical connections by moving your communication to the internet, it can also work in conjunction with your current phone system. This means that you can make good use of your previous capital expenditure to set up a physical system—in short, none of your resources will be wasted.

Improved Scalability

Since SIP trunking requires a connection over the internet, it offers the flexibility to add more DID numbers and phone lines to PBX systems, both cloud based and on premises, when the need arises.

Disaster Recovery

With the ability to redirect calls, SIP trunking helps businesses prepare for any kind of disaster that can strike their communication channels.

Cost Effectiveness

SIP trunking is known to cut down company expenses in telecommunication by 50%. In fact, this realization led to a drop of 300,000 ISDN channels in 2016.

SIP is more cost effective than other conventionally used channels because it helps eliminate:

  • Costs attached to long-distance/international calls.
  • Continuous purchasing of PRIs or local PTSN gateways.
  • Installation and maintenance cost of traditional channels.

Added Features

Apart from basic voice and data facilities, SIP has a number of benefits when paired with VoIP, such as the ability to:

  • Track geo-location.
  • Check user availability.
  • Use three-way conferencing/transferring and terminating calls.
  • Send instant messages.
  • Hold multimedia conferences.

Better Communication

Businesses can easily communicate across geographical boundaries with SIP trunking. For example, it allows employees sitting in distant offices to maintain a smooth channel of communication with the head office and their colleagues. SIP trunking is especially valuable for companies with a growing network of remote employees in different parts of the world. Since SIP irons out scalability issues, fluctuations in the number of employees won’t lead to system breakdowns.

SherWeb: Your Trusted VOIP Solution Provider

Are you looking for a VoIP solution provider for your business? Contact us today to upgrade your business communication and save up to 50% by switching to VoIP.

Written by Mathieu Pipe-Rondeau Marketing Communications Specialist @ SherWeb

Mathieu is responsible for SherWeb’s blog content and organic social media. Highly conscious of branding and related communications, he’s constantly on the lookout for new and better ways to showcase SherWeb to the world. Mathieu has ten years of communications and marketing experience, including expertise in knowledge management, process creation and improvement, technical writing and content strategy. When he’s not producing engaging content, Mathieu enjoys cooking, singing and skateboarding with his son.