What is SIP Trunking and How Does SIP Trunking Work?

Everything You Need To Know About SIP Trunking

As a business owner, you are constantly looking for ways to cut costs and reprioritize your spending. With all the services you are tasked with managing (merchant services, shipping services, payroll services, etc.) it’s understandable you haven’t mastered the knowledge of each industry. Maybe you’ve heard of SIP trunking, and maybe a friend of yours saves money by using it with his business, but you’d like to know more about how it works before you contact providers. Understandable.

Below is a high-level overview of SIP trunking and how it works:

What Is SIP Trunk?

Session Initiation Protocol, or SIP, is the way you achieve a voice over IP (VoIP) call. It’s an application layer protocol for setting up real-time sessions of audio and/or video between two endpoints (phones). Simply put, SIP is the technology that creates, modifies, and terminates sessions with one or more parties in an IP network, whether a two-way call or a multi-party conference call.
Related Reading: What is SIP Trunking?

How Does SIP Trunking Work?

A SIP trunk is the virtual version of an analog phone line. Using SIP trunks, a SIP provider can connect one, two, or twenty channels to your PBX, allowing you to make local, long distance, and international calls over the Internet. If you have an on-premises PBX in your office, a SIP trunk provider can connect to you and allow you to make outbound calls on your existing system, without restrictions on the number of concurrent calls.

Here is a diagram to show you how SIP trunks work:

What is SIP Trunking diagram

What is a SIP Provider?

The term “SIP provider” has its roots in “SIP trunking,” which is a service that allows businesses to connect their in-house IP PBX systems to the PSTN (Public Switched Telephone Network). When evaluating SIP providers, you should:

  • Check for scalability and if you can add and remove SIP Trunks based on your growing requirements.
  • Know what the failover system allows in case of power or network outages at your location.
  • See if the provider offers number porting for any existing phone numbers you may already have.

Related Reading: Which SIP Trunking is Right For You?

How Much Does SIP Trunking Cost?

The cost of SIP trunking can vary depending on your business needs, but typically businesses can expect to pay a setup fee of $0-$150, and monthly costs of $25-$50 per trunk.

Many SIP trunking providers offer plans that provide unlimited inbound and outbound, local and long distance calls on a per channel/call basis. Each channel provides the ability to make or receive a single call. Once you have filled all of your channels, you will be unable to make or receive additional calls. Additional channels can always be added for more capacity by contacting your provider. This type of SIP trunking service allows businesses a way to easily budget their telecom spending.

Related Reading: SIP Trunk Pricing at Sangoma

How Many Concurrent Calls Can Be Made with SIP Trunking? What About Bandwidth?

The limitation is based on Internet bandwidth capacity. Each non-compressed call uses approximately 85-100 kbps of bandwidth. In most Internet connections your upload speed is typically slower, so when determining the number of calls your connection will support, you should use your upload speed. If, for example, your upload speed on your Internet connection is 4Mbps, then the maximum recommended number of calls would be 40 (4,000,000/100,000).

Number of Concurrent Calls During Busiest Hours
100 Kilobits per Second
Bandwidth in Megabits per Second Required for SIP Trunking

Now that you know a little more about SIP trunking, you should determine if your network is ready to handle it:

Launch Network Assessment


VoIP is a way to transfer voice and video data over the internet, and SIP is the protocol used to initiate, manage, and end those calling sessions. So, you can see that VoIP and SIP work together to provide different ways of communicating over the internet, such as:

  • Video Conferencing
  • Instant Messaging
  • Sending and receiving multimedia messages

Related Reading: Everything you need to know about SIP trunking.

SIP Trunking Benefits:

SIP trunking provides multiple benefits to businesses of all sizes. The benefits of SIP trunking include:

  • Reliability
  • Cost savings
  • Scalability
  • Lower maintenance costs
  • Ability to use existing phone systems

    Related Reading: SIP Trunking FAQ

    How Can Sangoma Help?

    Now that you can answer, “What is SIP trunking?”, we invite you to learn more. With Sangoma’s SIP trunk services, features and benefits we offer end-to-end connectivity for businesses of all sizes.

    SIP Trunk by SIPStation

    Sangoma provides SIP trunking by SIPStation. Learn more about SIP trunking, SIP trunk pricing, Fax over internet and more.

    Which SIP Trunking Is Right For Your Company?

    Check out our SIP trunking whitepaper to determine which SIP trunking is right for your business.

    SIP Trunk Pricing

    Are you curious to learn more about SIP trunk pricing? Visit our SIP trunk pricing page and contact us to learn more.

    Sangoma is a Leader in SIP Trunking for Small Businesses

    Read what top industry analysts have to say about Sangoma’s SIP trunking services.

    Why You Need to be Selling SIP Trunking Wholesale

    Explore this SIP trunking infographic to see the top 9 reasons you should be selling SIP trunking wholesale. Download our other SIP trunking wholesale infographic to learn more.

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