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September 05, 2008

Understanding SIP is the Key to Lower Telephony Costs

By Susan J. Campbell, TMCnet Contributing Editor

For anyone who has spent any time on TMCnet, the phrase SIP Trunking has appeared more times than we could count, but for many, this phrase means very little. Instead, it is perceived as being used to describe technology that is confusing, yet can deliver significant benefits for those that can understand.

The cost of everything has been rising, forcing companies of all sizes to re-examine their internal processes and budgets to identify areas where costs can be reduced. As telecom technologies advance, they are also becoming more affordable for small to mid sized companies to make the switch to this new generation in telecommunication instead of relying of legacy systems.

Session Initiated Protocol – or SIP – is just another type of Voice Over IP or VoIP that companies use to gain better control over their telecom costs. The Public Switched Telephone Network (PSTN) has provided the platform for our calls over the past 100 years. This same platform has become increasingly expensive and progressive individuals searched for ways to make calls without relying on the PSTN in part or at all to make or receive a call.

A call that is made SIP to SIP can be extremely cheap - often just a fraction of a penny per minute. If the terminating end of the call is still on the PSTN, the call will have to be converted from VoIP to TDM (Time Division Multiplexing) to be able to use part of the PSTN. This can initiate a charge, but a lesser charge than is both ends of the call were on the PSTN.

For many companies today, they are paying both for phone services and for Internet/data bandwidth. SIP is carried over the data connection – which the company already has – and allows the company to eliminate much of the phone service it pays for on a monthly basis.

There are many devices and services on the market that can allow a company to easily use VoIP no matter what their size. Many new phone systems today include built in support for SIP, making the transition even easier.

For those companies still relying on a TDM phone systems, there are still options available. Essentially, the services that have been offered by traditional phone companies for years are now available in some form on SIP.

As more companies are understanding SIP and tuning to this technology, the average cost to make a call is dropping. Not only does SIP offer the ability to make a cheaper call, the new SIP enabled phone systems offer much more flexibility and robust features than ever before, which levels the playing field between big and small companies.

There is much to consider when looking to SIP and Telecom Monthly provides considerable insight. For more information, click here.

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan's articles, please visit her columnist page.

Edited by Stefania Viscusi

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